Allianz is off to a strong start in 2018 delivering increased profit and underlying growth
Posted on: 15 May 2018
|Allianz UK Financial Results||Q1 2018||Q1 2017|
GWP= Gross Written Premium; COR= Combined Operating Ratio
Chief executive officer, Jon Dye said:
The company has made a strong start to the year with underlying growth of 3.2% and profit up 6.1% compared to the same period in 2017. This performance has been achieved whilst we prepare to transfer the business between LV= and Allianz. This underlines the company’s commitment to deliver a business as usual approach to trading during this time."
In prior years our Engineering Inspection fee income was included within GWP. This has been reviewed in preparation for the introduction of the new International Accounting Standard for Insurance Policies (IFRS 17) which is effective from 1st January 2021. We have decided to exclude the fee income from this year’s GWP figure, but the 2017 number remains as reported last year.
The underlying GWP increased by 6.0% and the COR improved by 2.9% compared to the same period last year, which represents an impressive start to the year in challenging market conditions.
A significant amount of hard work is going into the transfer of the commercial business which will take place at the end of the third quarter. Brokers will be hearing more detail on these plans in due course. The positive collaboration between the teams at LV= and Allianz is impressive and appreciated.
Expanding the underwriting appetite as a result of transferring the Commercial Lines portfolio from LV= is an exciting prospect and the process of setting up new agreements with 168 brokers has already begun. We are delighted to be working with a new cohort of brokers as we seek to grow our Commercial business.
During the quarter the business also launched a strengthened Property Owners Select proposition, introduced an e-traded Defaqto 5*rated small motor fleet proposition, and refreshed the commercial motor fleet products. Continuing to launch innovative solutions to market is another example of delivering for brokers during a period of intense activity caused by the joint venture with LV=.
In Personal Lines the GWP has remained at the 2017 level which reflects the focus on transferring the home and motor business to LV=. The 4.0% reduction in the COR compared to the previous year is a very good performance.
The transfer of Personal Lines business between Allianz and LV= has already begun with the first tranche via Acturis for Car, Home and Van activated for 1 May quotes and 1 June inceptions. This shows the determination and hard work of our team in making sure the business meets its deadlines. This is particularly impressive during what has been an uncertain time for some of the people involved.Clearly this has been a difficult time but positive job opportunities have emerged. This includes redeployment to other parts of the business including the wider Allianz Group in Munich, as well as secondments and permanent transfers to LV=. We expect to see people transferring in both directions in the coming months.
We will continue to work hard to minimise the impact on the workforce and there is every confidence the eventual number of job losses will be considerably lower than the jobs at risk announced in January.
Elsewhere in Personal Lines, our animal health business Petplan continues to deliver good levels of growth and business retention rates are at a strong level in a very competitive market. There are now 53,000 more Petplan policies in force compared to one year ago.
The Civil Liability Bill is making steady progress through the House of Lords but there remains a long way to go before there is certainty on what the reforms will look like and before the implementation date is known. Consequently, discussions with brokers will continue on the consequences of increased personal injury costs caused by the reduction in the Discount Rate.
Conversations with brokers often turn to the topic of Brexit and how things will operate in the market when Britain leaves the European Union in March 2019. As more detail about the framework for providing cross-border insurance emerges, greater clarity will be provided on the plans to meet this challenge. In the meantime, brokers can be confident that Allianz will be in a strong position to offer cross border insurance solutions for their existing and future customers.
Jon Dye concluded:
The first quarter’s performance sets the business up for a promising financial year and we are determined to maintain our focus on delivering for our broker partners and customers.
"We pride ourselves on maintaining a consistent strategy and building relationships for the long-term. As we enter the remainder of the trading year, we believe brokers will reflect on the positive approach Allianz takes to running its business and the benefits our consistent approach brings for their own organisations."
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