Allianz UK has maintained financial strength in the first nine months of 2017 (Q3) despite
“an unusual number of large losses” across a number of accounts.
The insurer reported gross written premium (GWP) of £1,647.1 million, up from £1614.8 million in Q3 of 2016. Its operating profits have dropped from £121.0 million to £84.6 million and its combined operating ratio (COR) has increased from 96.9% to 98.2%.
Commercial lines have performed well, with a 6.0% revenue growth over the previous year. The company reached a COR of 95.5% in the commercial book, which it described as “an excellent result” in wake of the large losses from global natural catastrophes and the impact of the
Ogden Discount Rate reduction.
“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 £46 million 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,” said Allianz Insurance CEO, Jon Dye.
“The large losses in the quarter and the current year impact of £17 million 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.”
Allianz UK saw a decline in revenue in personal lines, which the company attributes to its withdrawing from the direct market. The COR of 100.2% has improved from Q3 of last year when it was 101.1%, which the insurer describes as “a positive performance”.
The insurer recently announced a joint venture with LV=, which has been granted approval by the European Commission and is awaiting approval from the PRA. The venture is about “growth and opportunity” according to Dye.
“Subject to receiving this regulatory approval, our intention is to communicate detailed plans to the broking community in the New Year,” Dye explained. “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.
“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. Allianz UK and our business partners can look forward to the future with great confidence and optimism.”
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