Chief executive Dye warns of commercial rate increase slow-down
Allianz UK made an operating profit of £170.5m in 2013, up 5.6% on the £161.5m it made in 2012.
The insurer’s combined operating ratio (COR) dropped by 0.4 percentage points to 95.9% (2012: 96.3%), as improving underwriting performance in commercial lines offset deterioration in personal lines.
The company has also able to grow revenues, boosting gross written premium (GWP) by 2.7% to £1.93bn in 2013 (2012: £1.88bn).
Allianz UK chief executive Jon Dye said: “I am very pleased to report that over the last 12 months, Allianz Insurance has achieved profitable top line growth as well as delivering an improved underwriting performance.
“These are an outstanding set of numbers and it is worth remembering that they have been achieved in macro economic and market conditions that were far from easy for our underwriters and claims teams.”
Allianz UK’s commercial business reported a COR of 96.3% in 2013, a 1.6 point improvement over 2012’s 97.9%.
GWP increased 2.7% to £1bn (2012: £974.1m).
Allianz attributed the profitable growth in commercial to its underwriters, and added that the improvement had come despite an apparent slowdown in rate increases on the market in the second half of 2013.
Dye said: “There were strong signs during the second half of last year that the commercial market’s appetite for rate increases that exceeded the rate of claims inflation had weakened.
“ I hope that the extreme weather events towards the end of last year, and now into February of this year, will create a more receptive market for achieving premiums that provide sustainable levels of acceptable profit.”
Allianz UK’s personal lines business reported a COR of 96.1% in 2013, 1.9 points higher than 2012’s 94.2%.
Despite this, the company was still able to grow GWP by 2.8% £930.7m (2012: £905.7m).
Dye said the already highly competitive private car market was made worse by some insurers cutting prices in response to the Laspo legal reforms in anticipation of falling claims.
“Consequently, growth in the private motor broker portfolio was not as strong as planned at the beginning of the year, but we did achieve a pleasing level of profit.”
He said that the broker household account was able to grow profitably despite the bad weather in the last quarter of the year.
Dye added that Allianz UK’s Petplan pet insurance business had another pleasing year, with GWO and profit ahead of last year’s levels.
Dye concluded: “2013 was a tremendous year for this organisation. Across every key benchmark the business sets itself, we have achieved a positive result.
“Once again, the company’s financial performance speaks for itself as it has done for more than a decade.”