But chief executive Jon Dye says profit is back on track after Q2 ‘rebound’
Allianz UK made an operating profit of £64.3m in the first half of 2014, down 25.2% on the £86m it made in last year’s first half.
The combined operating ratio (COR) worsened by 2.4 percentage points to 98.1% (H1 2013: 95.7%).
A 5.5 point jump in the firm’s personal lines COR to 100.3% (H1 2013: 94.8%) wiped out a 0.8 point improvement in the commercial COR to 96.6% (H1 2013: 97.4%).
The profit dip was mainly caused by weather claims in the first quarter.
But Allianz UK chief executive Jon Dye said that operating profit “rebounded” in the second quarter of the year and was “virtually back on plan” at the end of that quarter.
He added: “The combined ratio for both our commercial and retail divisions improved from the position at the end of Q1 and we are on track to deliver our planned profit and growth figures for the year.”
Gross written premium (GWP) across the company grew by 9.7% to £1.1bn in the first half of 2014 (H1 2013: £996.3m).
Within this the personal lines segment reported the strongest growth, with GWP rising 15.7% to £534.5m (H1 2013: 461.9m).
Dye said this had been achieved by “balanced and sustainable” growth in revenue and customer numbers across its broker, corporate partner and direct channels in motor home and pet business.
It added that Allianz Legal Protection division was “running well ahead of plan” and has a new after-the-event legal expenses insurance product starting to trade in the market.
Allianz’s commercial division grew its GWP in the half by 4.7% to £559.6m (H1 2013: £534.5m). Allianz said it was able to grow volumes in virtually all of its commercial lines.
Dye said: “While trading conditions remain difficult, we have managed to achieve rate strength in some challenging markets.”
He added that the company had launched a retail and whole proposition for the mid-corporate market, refreshed its construction project all risk approach, developed an international fleet proposition and released an e-traded directors’ and officers’ liability product on its QuoteSME trading platform.
“All of which has aided retention, new business activities and profit improvement,” said Dye.
‘Very achievable’ plan
In March 2014 Allianz UK unveiled a plan to become a £3bn business in five years from its 2013 level of £2bn.
Dye said: “In Q2 we have pulled our profit performance back to plan with strong contributions from right across our portfolio. We have also succeeded in growing our GWP ahead of plan. These results serve to demonstrate that our five-year profitable growth ambition is very achievable.”
Allianz UK H1 results breakdown
|H1 2014||H1 2013||Change (%/points)|
|Operating profit (£m)||64.3||86||-25.2|