Financial highlights at end Q3 2011 compared to same period in 2010:

• Gross Written Premiums (GWP) up 10.2% to £1374.7m
• Operating Profit up 3.8% to £123.6m
• Combined Operating Ratio (COR) remains at an excellent 95.8%

Divisional Results Breakdown

Statement from Chief Executive Officer Andrew Torrance

I am pleased to be able to announce that Allianz UK continues to deliver an impressive financial performance in what can only be described as challenging market conditions and within a wider economic environment that offers no assistance or looks likely to in the foreseeable future.

At the corporate level we have now reported a sub-100% Combined Operating Ratio at each of the past 36 consecutive quarters stretching back as far as the beginning of 2003. This is an enviable achievement and as can be seen in our 2011 Q3 results, our COR remains at an excellent 95.8%.

We are also continuing to grow our top line which is up more than 10 per cent compared to the same period last year and, most importantly for our business and our shareholder, this is profitable growth. Operating profit is up to nearly 4 per cent compared to the end of the third quarter last year.

At the divisional level, our Commercial business GWP has grown by 2.5% compared to the same period last year. We are seeing some encouraging levels of premium growth in our commercial motor book but elsewhere in our general commercial portfolio, rate strength remains in low single digit territory.

The performance of our Engineering business reflects the wider economic challenges faced by many of its customers. However, the GWP in the insurance portfolio is only marginally behind its position a year ago. The fee based inspection part of this business is continuing to deliver encouraging performance.

Allianz Engineering secured two new business wins during the quarter that demonstrate the quality of its offerings to the market. Firstly, a three-year deal to provide inspection services to the largest department store retailer in the UK, the John Lewis Partnership. Engineering also won the inspection business of the Science Museum in London. This fits into our portfolio nicely alongside the Natural History Museum and the Royal Albert Hall.

In Retail Division, our broker motor and household portfolios continue to perform well ahead of prior year in terms of GWP growth. In private car our policy numbers have moved forward during the quarter. We are also seeing good growth in our broker household account.

In terms of results for the customer, I am pleased to report that during the early part of the quarter our Net Promoter customer service feedback analysis reported that Retail had improved its position against our key competitors. There was further good news from the GIMRA industry customer analysis exercise which also reported an improved performance. There were many positive aspects to this result, but in particular it reflects the way that the claims team handled the freeze event last year.

Our Animal Health business (Petplan) is delivering pleasing GWP growth compared to prior year, up 6 per cent. The re-launch of the small animal product range which took place at the beginning of July has been a success with new business at record levels in Q3. Profitability in this business remains at a pleasing level and is ahead of plan. Customer loyalty remains very strong with over 90% of Petplan customers renewing their policies every year.

Legal Protection GWP is significantly ahead of prior year and I am very pleased with the progress this business has made in recent years. It is now delivering consistent underwriting profit and a very pleasing COR. Allianz Legal Protection reached a notable landmark in its relationship with one of its key customers, the National Accident Helpline, writing its 250,000th policy. This relationship has generated over £200m premium since 2000, representing one of the longest and most successful partnerships in this market.

In the direct business, our online offering, Your Cover, launched a home insurance product on its website and launched its motor product on the Comparethemarket.com price comparison site. I am encouraged by the performance of this still relatively fledgling part of our business.

Home and Legacy had a very good quarter with ahead of plan revenue, profit and sales performance. During the quarter Home and Legacy was the first High Net Worth specialist to launch an integrated quote system on the Acturis trading platform which we anticipate will drive additional sales volume in 2012.

During the third quarter of this year Allianz UK was able to celebrate a number of notable milestones but I would highlight the Allianz Underwriting Academy celebrating its 10th anniversary at an event held in London. I am convinced that both our financial performance and our customer service delivery have benefitted markedly as a direct result of the academy’s work.

We also received the results from the February sitting of the Chartered Insurance Institute Exams and I am delighted to report that once again we have maintained our historically high success rate and even improved our performance a little. The results show an overall pass rate of 78%, up from 77% at the October 2010 sitting. From the 319 exam entries, Allianz employees achieved 31 distinctions and we have 21 new Advanced Diploma Holders and 9 new Diploma holders. This pass rate is significantly ahead of the market average and underlines our commitment to invest in personal development and the technical skills of our employees.

I do not need to tell anyone that 2011 continues to be a stretching year for companies operating within the insurance industry and beyond, and of course our customers are also facing financial challenges of their own. However, it is important to remember that everyone is in the ‘same boat’ and I prefer to see the situation with a 'glass half full' mentality as it is important to remain positive, even in the most exacting circumstances.

I have every confidence that from our position in Q3 and absent any major weather events between now and the end of the year, that Allianz UK will deliver another strong financial performance this year.

Andrew Torrance
Chief Executive, Allianz Insurance
21 November 2011.

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