Rate rises must be steady to take personal lines motor out of recession
Allianz bucked the recession to grow operating profit 5%, climbing from £193m in 2008 to £203m last year, while combined ratio improved from 95.2% to 92.9%.
In personal lines motor, Allianz got tough with a strategy to push through rate rises of 24%. It meant gross premium income across the whole retail book fell from £612.6m in 2008 to £579.9m last year, but combined ratio tightened from 109.6% to 101.4%.
Meanwhile, the commercial business surged past the £1bn barrier to £1.01bn, up 9.7%.
Chief executive Andrew Torrance said: “More customers looked to benefit from our consistent market-leading service levels, broad product range and second-to-none financial strength. The division also delivered an excellent combined ratio of 87.6%.”
Torrance predicted a tough 2010, with the economy moving out of recession at a sluggish pace. He outlined a strategy of creeping rate rises to keep business profitable.
He said: “It remains a priority for us in 2010 to increase premium rates to a level that provides an adequate return on the cost of capital. This was not achieved in 2009. We will consequently be looking to increase rates across both our commercial and retail books of business.”