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Allianz's financial strength meets the challenge of quarter three

Press Release   •   Nov 13, 2017 10:07 GMT

Jon Dye, CEO, Allianz Insurance


Allianz UK Financial Results Q3 (YTD) 2017 Q3 (YTD) 2016
  • Gross Written Premium (GWP)
£ 1647.1m £ 1614.8m
  • Operating Profit
£84.6m £121.0m
  • Combined Operating Ratio (COR)
98.2% 96.9%
Commercial Lines
  • GWP                                                      £880.2m             £829.8m
  • COR                                                        95.5%                 91.5%
Personal Lines
  • GWP                                                      £767.0m            £784.9m
  • COR                                                           100.2%          101.1%


Chief Executive Officer, Jon Dye said:

“Revenue growth remains at a pleasing level and business retention is strong despite stiff competition in all the markets in which we compete. The quarter saw an unusual number of large losses totalling £46m across the commercial property, fleet, liability and private car accounts. This made for a challenging period but these events happen to insurers from time to time and should not be seen as the start of a trend.

"The large losses in the quarter and the current year impact of £17m from the Ogden Discount Rate reduction have not prevented the business from delivering a reasonable underwriting profit year to date. This illustrates the financial benefit of a strong and diverse portfolio and our ongoing focus on delivering profitable growth.

“The announcement of the joint venture with LV= has created a lot of positive interest. The European Commission has recently given its approval for the joint venture which is an important step forward. We now await the PRA’s approval scheduled for December with great anticipation.

“Subject to receiving this regulatory approval, our intention is to communicate detailed plans to the broking community in the New Year. What I would reiterate strongly is the venture with LV= is about growth and opportunity. During 2018, my colleagues trading in the commercial broker market will be operating as they are today, but with a broader portfolio of propositions. Alongside this, the planned joint venture will become a major player in personal lines.

“Allianz UK and our business partners can look forward to the future with great confidence and optimism.”

Commercial:

A 6.0% revenue growth over the previous year represents a strong top line performance and reflects the ongoing strategy of proactively looking for profitable business opportunities with brokers. The unusual number of large losses referred to earlier makes the delivery of a 95.5% COR an excellent result and provides a robust demonstration of the underlying strength in the commercial book.

Engineering continues to perform in line with its market leading proposition. Top line growth is strong as is the level of underwriting profit. The recent launch of the construction product has been well received by brokers and is delivering very positive new business numbers.

Personal:

As previously reported, revenue is down as a result of withdrawing from the direct market. The COR is maintaining its improvement over the previous year which is a positive performance in an account also affected by some significantly large motor claims during the quarter.

Petplan has delivered excellent profitable growth in line with its market leading status. This performance has been supported by a significant investment in technology designed to strengthen the customer experience.

Results for the customer:

For Allianz, the Top Down Net Promoter Score methodology is the key measure of broker sentiment towards the business and it allows us to benchmark our performance against key competitors. The results of this independently conducted research recently reported that Allianz Commercial Broker has seen an impressive improvement in positive sentiment for the service provided to brokers. Achieving our highest ever NPS score not only shows the business continues to strengthen its service delivery standards; it also maintains a Loyalty Leadership position. Allianz Engineering also remains the Loyalty Leader which is an excellent performance in this market.

To underline the positive sentiment brokers have towards the service provided by Allianz, the results of the latest Brokerbility and Towergate surveys put Allianz top for overall satisfaction across a range of customer service criteria.

Jon Dye commented:

“One of the strategic objectives of Allianz is creating inclusive meritocracy within our business. The aim is to provide a culture where people and performance matter. It includes developing talent, strengthening employee engagement and fostering diversity as a source of success. I am therefore delighted to report that Allianz has recently become a signatory to HM Treasury’s Women in Finance Charter.

“The Charter reflects the ambition of both the government and the financial services industry to have a truly balanced workforce. This is good for employees, our customers and the industry. Signing this Charter reflects our commitment to supporting women in the workplace and gender equality.

“Continuing to maintain our focus on delivering for our customers and for our people even during a period of change is one of this organisation’s standout strengths. I congratulate all my colleagues for their ability to keep their day-in and day-out focus on the things that matter to Allianz.

“Turning to the market, the strengthening of rates is helping to manage the financial challenge of a significantly reduced Discount Rate.

"The September announcement from the government that it intends to put forward new legislation which if effective today, would set the rate at between 0 -1%, is welcome news.

"However, it is only an intention. It will take a considerable period of parliamentary time to get legislation through the various stages before it is on the statute books, at a time when the political agenda is dominated by Brexit. In the meantime, the -0.75% rate still applies which is an important consideration for underwriters in relation to the cost of serious personal injury claims now and for the foreseeable future.

“Finally, as we enter the final quarter of this trading year, the business is well positioned to deliver a solid set of financial results as we continue with our preparations for an exciting 2018.”

Ends

Notes for the Media:

  1. The financial results in this press release are calculated on a local basis only. The numbers will vary from those provided by Allianz Group because of different accounting approaches in relation to the Ogden discount rate. There will also be variations because of fluctuations in the Sterling against the Euro exchange rate during the period.
  2. Allianz Insurance is one of the largest general insurers in the UK and part of the Allianz SE Group, the largest property and casualty insurer worldwide. Around 85 million private and corporate customers rely on Allianz's knowledge, global reach, capital strength and solidity to help them make the most of financial opportunities and to avoid and safeguard themselves against risks.

    In 2016, over 140,000 employees in more than 70 countries served 86.3m customers and achieved total revenues of approximately 122.4bn euros.

Allianz Insurance is one of the largest general insurers in the UK and part of the Allianz Group.

The Allianz Group is one of the world's leading insurers and asset managers with more than 86 million retail and corporate customers. Allianz customers benefit from a broad range of personal and corporate insurance services, ranging from property, life and health insurance to assistance services to credit insurance and global business insurance. Allianz is one of the world’s largest investors, managing over 650 billion euros on behalf of its insurance customers while our asset managers Allianz Global Investors and PIMCO manage an additional 1.3 trillion euros of third-party assets. Thanks to our systematic integration of ecological and social criteria in our business processes and investment decisions, we hold a leading position in the Dow Jones Sustainability Index. In 2016, over 140,000 employees in more than 70 countries achieved total revenue of 122 billion euros and an operating profit of 11 billion euros for the group.

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Allianz Insurance is one of the largest general insurers in the UK and part of the Allianz Group.

The Allianz Group is one of the world's leading insurers and asset managers with more than 86 million retail and corporate customers. Allianz customers benefit from a broad range of personal and corporate insurance services, ranging from property, life and health insurance to assistance services to credit insurance and global business insurance. Allianz is one of the world’s largest investors, managing over 650 billion euros on behalf of its insurance customers while our asset managers Allianz Global Investors and PIMCO manage an additional 1.3 trillion euros of third-party assets. Thanks to our systematic integration of ecological and social criteria in our business processes and investment decisions, we hold a leading position in the Dow Jones Sustainability Index. In 2016, over 140,000 employees in more than 70 countries achieved total revenue of 122 billion euros and an operating profit of 11 billion euros for the group.

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