Allianz UK reported a commercial lines combined operating ratio (COR) of 89.9% for the first quarter of 2016, which chief executive Jon Dye hailed as the unit’s “most profitable quarter for some years.”
The commercial lines COR was a 6.9 percentage point improvement over the 96.8% reported in the first quarter of 2015.
Key figures - Allianz Q1 2016 results
|Q1 2016||Q1 2015||Change|
|Operating profit (£m)||47.4||33.2||+43%|
The insurer’s personal lines division continued to make an underwriting loss, with a COR of 101.2%.
This was almost unchanged from the 101.1% the division reported in the first quarter of 2015, but an improvement on the full-year 2015 personal lines COR of 106%.
Dye said: “The corrective underwriting action we have taken is having a clear and positive impact on this result and the absence of any extreme weather has also been helpful.”
Ups and downs
The commercial lines unit grew gross written premium (GWP) by a “relatively modest” 1.9% to £282m (Q1 2015: £277m). But personal lines revenue dropped 5% to £265m (Q1 2015: £278m).
Allianz said this reflected “corrective rate measures applied by the business”.
As previously reported, Allianz UK as a whole posted a 43% increase in operating profit to £47.4m and a 1.8 point COR improvement to 95.9%. Overall, GWP fell 1.5% to £547.3m from £555.4m.
Dye said the drop in GWP reflected ”the underwriting action taken in private motor and the virtually flat rate environment in the commercial lines market”.
The results follow Allianz’s decision to combine its commercial and personal lines business into a single unit and the announcement of its planned exit from direct personal motor and home business, which has put 170 jobs at risk.
Dye said: “The first quarter financial results are good and the revised business structure will support our ability to deliver a strong and sustainable performance in line with the group’s Renewal Agenda strategy.
“It is early in the year but I believe the business is well placed to deliver a strong financial performance and I look forward to reporting on our progress over the course of 2016.”