Allianz Insurance made an operating profit of £34.4m in Q1 2011, down 6% on the £36.7m it made in the same period last year.
“The slight reduction in profit was largely driven by lower investment returns in the continued low interest rate environment,” said Allianz Insurance chief executive Andrew Torrance in a statement.
Torrance described Allianz’s Q1 2011 combined ratio, which increased slightly to 96.9% from 96.5%, as “excellent”.
Allianz’s commercial lines combined ratio increased to 94.8% from 92.6%. However, the personal lines combined ratio moved from a loss-making 101.7% in Q1 2010 to a profitable 99.7% in Q1 2011. Torrance said the improved COR and the 9% gross written premium growth in personal lines were “further signs that this part of our business is continuing on its upward trajectory in terms of its overall performance”.
He attributed the improved underwriting result to rate increases in the private motor business. However, he added that it was early days for improvement in household rates.
“We would like to see consistent and strong rate rises in broker household for the remainder of this year, not least as a prudent step in preparing for the likelihood of adverse weather related claims,” said Torrance.
Commercial lines GWP was up 7%. Torrance said growth was most notable in packages and motor business. He added that the strongest rate strength was achieved in commercial motor, but only low, single-digit growth was possible elsewhere in the commercial book, reflecting competitive market conditions.
“Returns on average across this business continue to be inadequate, particularly in respect of commercial property,” said Torrance.
Total GWP increased 7.8% to £443.5m in Q1 2011 from £411.3m in Q1 2010.
Allianz Insurance Q1 2011 highlights in £m (compared with Q1 2010)
- Gross written premium: 443.5 (411.3)
- Operating profit: 34.4 (36.7)
- Combined ratio: 96.9% (96.5%)
- GWP: 254 (237.3)
- Combined ratio: 94.8% (92.6%)
- GWP: 189.5 (174.0)
- Combined ratio: 99.7% (101.7%)