Insurer plans to be a £3bn business overall in five years
Allianz UK has unveiled a five year plan that it hopes will see its commercial business deliver more pounds of profit than all its rivals by 2018.
If successful, this plan will see it overtake currently larger rivals Aviva and RSA.
It also aims to make its personal lines business a top-five player by 2018, and is willing to take a cut in profitability to get there.
In total, the two growth plans would make Allianz UK a £3bn business in five years’ time, compared with its current £2bn level.
Allianz UK chief executive Jon Dye also confirmed that brokers would be “absolutely at the centre” of his company’s growth plans.
Speaking to journalists following the release of Allianz UK’s results this morning, chief executive Jon Dye said that Allianz UK’s commercial combined operating ratio of 96.3% was already probably the best in the market, but that because the £1bn commercial book was smaller, it was delivering a smaller profit in pound terms.
He said: “[The plan] would require us to hold our combined ratio at around the level it is now, and to grow the business by a meaningful amount over the next five years to get to the number one position. We think we have got the right platform to do that.”
Top five in five for retail
On the retail side, Dye said Allianz was aiming to grow gross written premium (GWP) by 50% over the next five years, matching the level of growth seen in the past five.
The company’s retail GWP in 2013 was £930.7m, compared with £600m back in 2008.
Dye said the biggest opportunities to grow were in personal motor and household, where its market shares are around 2% and 2.5% respectively, and that Allianz UK would be willing to sacrifice some profit to grow.
He said: “To do that we may need to make some investments and it is possible we will have to let some of our profitability slide a little in retail to achieve that growth we want.”
However, he emphasised that the retail business and the company as a whole would remain profitable despite this.
“In balance across the business we will deliver the right level of profit that will keep our shareholder happy, which is an extremely important factor.”
Brokers at the centre
Dye also stressed the importance of brokers to his growth plan in both commercial and retail business, despite the fact that Allianz has several distribution channels such as its partnerships business and direct propositions in both SME and personal lines.
He said: “For both commercial and retail brokers are going to remain absolutely critical for us in the course of the next five years.”