Torrance brands new commercial market entrants "naïve"
Allianz Insurance chief executive Andrew Torrance has said the insurance giant is looking to push rate increases through despite unfavourable conditions.
“We have a tactical target that we are using right through the year of getting a 5% rate increase,” Torrance told a press briefing today, but admitted: “We haven’t achieved that. In quarter three we got a 3% increase. And the organisation did well to get that.”
The 3% increase has been earned across the general commercial portfolio. Torrance said the company will be targeting 5% rate increase again in 2011.
Torrance said the low rate increases are a reflection of the competiveness of the current market, making it more difficult for companies to earn profitable revenue on premiums written in 2010.
According to Torrance, the commercial property market is currently very difficult. “It is very clear there is not enough in the commercial property rates to pay for a normal level of weather-related losses in the 12-month period,” he said.
Torrance also said: “I think some of the new entrants in the UK commercial [market] are pretty naïve about the levels of profit they can expect to derive from their portfolio.”
Allianz Insurance, the UK division of the German insurance group Allianz, reported a pre-tax IFRS operating profit of 119.1m for the first nine months of 2010, down 31% on the £173.3m it made last year.