Allianz UK chief executive Jon Dye hails ‘pleasing results’ for first nine months
Allianz UK made an operating profit of £121m in the first nine months of 2016, up 17.7% on the £102.8m it made in the same period last year.
The combined operating ratio (COR) improved by one percentage point to 96.9% from 97.9%, driven by commercial performance.
Allianz UK nine month key figures
|Nine month 2016||Nine month 2015||Change (%/points)|
|Operating profit (£m)||121||102.8||17.7|
But gross written premium (GWP) was down 4.2% to £1.61bn (nine months 2015: £1.69bn) because of Allianz’s decision to exit direct motor and home business.
Commercial lines GWP grew commercial lines GWP grew slightly to £829.8m (nine months 2015: £824m) while personal lines was down 8.8% to £784.9m (nine months 2015: £861m). This means that the direct motor and home exit has cost Allianz £76.1mm in GWP so far.
Chief executive Jon Dye said: “I am pleased to report that Allianz continues to deliver a strong financial performance. The business has delivered a 17.7% increase in profit over prior year and a COR of 96.9% which are pleasing results.”
Commercial lines shine
Allianz UK’s underwriting profitability in the first nine months of 2016 was driven by commercial lines. The commercial business produced a COR of 91.5%, a 2.8 point improvement over the 94.3% reported in the same period of 2016.
Dye described the commercial COR as “impressive” and added: “There are no signs of a let up in the competitive intensity in this market. In the prevailing market conditions, my message to the broking community is that Allianz has the propositions and the desire to trade for the long-term benefit of our customers.”
The personal lines COR improved by 1.6 points, but was still in underwriting loss territory at 101.1% (nine months 2015:102.7%).
Dye said the personal lines result “was expected” in light of the decision to withdraw from direct home and motor.
Allianz has undergone a lot of change in 2016 so far. In addition to the direct motor and home exit, the company has merged its personal and commercial lines divisions into a single unit. It has also been cost cutting.
The result of these actions is that the company has put 250 jobs at risk over the course of the year.
Dye said: “We have successfully executed considerable change during the quarter and I am pleased to report that the business has kept the promises it made.
“Restructuring the business from two trading divisions into one commercial and personal approach to market as well as the creation of a new technical team took just three months to complete.
“During this period of significant adjustment, I am pleased to report that the business has maintained our usual high standard of service to brokers which has been reflected in their feedback.”