Underwriting discipline under fire as motor rates stay flat
Allianz Cornhill chief executive Andrew Torrance has defended the company's underwriting discipline, following publication of its half-year results.
In contrast to rivals, Allianz Cornhill reported that its motor rates remained flat. But Norwich Union and Royal &SunAlliance achieved increases of 5% on their motor rates.
Actuaries have warned that insurers will struggle to make a profit in motor unless motor rates rise. Claims inflation in motor is running at around 5% per annum.
But Torrance denied that the flat rates in motor showed the company was failing to exercise proper underwriting control. He said other insurers' rating increases "were not our experience of the market at large".
Allianz Cornhill reported a 22% increase in profit for the period, with pre-tax profits rising to £111m against £90.9m in the first half of 2004. The group's combined ratio improved by 1.2 points to 93.9%.
Commercial lines saw net written premiums rise by 3.6% despite the market remaining "challenging".
Personal lines experienced a sharp drop of 23% in its gross written premium.
The insurer said that just under half of the decrease was due to withdrawal from the Broker Direct account, butthe company admitted that the competitive conditions had also affected its top line performance.
Speciality business also saw a decline of 11.8% in its premium income, although the company said the business "continues to offer attractive returns" particularly from its animal health component.
Cardiff office to open
Allianz Cornhill is to open an office in Cardiff.
The insurer said the office would focus on commercial business and would employ around six staff.
Allianz Cornhill said the move was "due to a desire to expand the business in the South and mid-Wales markets where we see significant potential".
The office will open in early September and will be headed up by the regional manager, Duncan Carter.