Strong SME performance lifts insurer's half-year profits to £92.4m
Allianz Cornhill has lifted its pre-tax operating profit by 13.2% for the first half of 2004 to £92.4m, improving on record results in 2003.
The profit increase came on the back of a 2.3% rise in gross written premiums (GWP) to £936.6m. Chief executive Andrew Torrance said he was pleased the company had bettered its 2003 result. "Clearly 2004 is setting new levels for us," Torrance said.
The insurer's combined ratio fell slightly to 95.1% for the period, down from 95.9%. "It's modestly down on 2003, which is good," Torrance said.
In commercial lines Allianz's GWP reached £561m, up 2.3%. Of the small increase, Torrance said: "What that masks is a more robust performance in the mid commercial and SME markets".
The company recorded a combined ratio in commercial of 95%, down marginally from 95.7% for the first half of 2003.
Torrance said that aside from rate reductions in property and energy business written by its global risks division, Allianz Cornhill had achieved positive rate strength across all other classes of business.
Premiums in the global risks division fell by about 9% as a result of the company adopting a "more defensive underwriting posture", Torrance said.
He described the movement as a "price correction" driven by existing players rather than as a result of new capacity entering the market.
"I don't think we're going to see year on year reductions. I think this is a one-off rate reduction."
In personal lines, GWP rose £374.8m, up 2.2%.
Torrance described the personal lines combined ratio of 94.8% as an "outstanding performance for a personal lines portfolio".
He said reductions in the level of business being written via Broker Direct, in line with the insurer's previously announced decision to withdraw from that business, had a 2.2% impact in the overall growth rate in personal lines.
Torrance said its decision to exit this business would have an even greater impact in the second half of 2004, and as a result, the personal lines portfolio for the year would be "quite static".
Torrance said the animal health division continued to perform well. The company had made1,200 vets appointed representatives, a number that will increase to between1,400 and 1,500 by the end of 2004.
