Profit and GWP rise as COR stays solid

Allianz UK chief executive Andrew Torrance remains upbeat about the insurance market’s future despite prevailing tough conditions.

“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,” Torrance said in a statement accompanying his firm’s third-quarter results.

But he added: “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.”

As revealed in Allianz’s UK’s parent company results on 11 November, Allianz UK’s combined ratio for the first nine months of 2011 has remained static at 95.8% while gross written premiums and profits have both grown.

Gross written premium (GWP) was up 10% to £1.4bn (9M 2010: £1.2bn) while operating profit increased 4% to £123.6m (9M 2010: £119.1m).

Commercial underwriting profitability improved, with the combined ratio dropping 0.8 percentage points to 95.1%. However, the personal lines underwriting performance worsened slightly with the combined ratio creeping up 1.2 percentage points to 96.8%.

This bucks the trend at several of Allianz’s peers, who saw improving commercial lines performance against worsening commercial results.

However, personal lines GWP growth outpaced commercial growth. Personal lines GWP was up 21% to £634.2m (9M 2010: £525m) while commercial GWP increased 2.5% to £740.5m (9M 2010: £722.1m).

“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 results statement said.

Torrance said that, absent major weather events, Allianz was on track to produce “another strong financial performance” for the full year.