Alongside a dip in commercial lines GWP, Allianz Insurance has issued payments for more than 80% of accepted Covid-related BI claims
Allianz Holdings, which comprises of Allianz Insurance and LV= General Insurance, has recorded a 10.6% drop in gross written premium (GWP) for the first quarter of 2021 – this has fallen from £1026m in 2020 to £917m this year according to its latest financial update, published today (12 May 2021).
Allianz Insurance specifically has seen GWP reduce by 12.3% over the last year – this now stands at £451m compared to £514m in quarter one last year.
In part, the business attributed this decline to a drop in GWP within its commercial lines as “the economic impacts on our customers play through into our revenue”.
However, the insurer was quick to add that “actions which have been put in place to address specific challenges in various lines of business are having a positive impact on performance and the business is well-positioned to build on its strong base”.
These figures also reflect the management of Covid-19-related business interruption (BI) claims – Allianz Insurance said it is tackling these claims “proactively and efficiently” and that it has made payments on more than 80% of accepted claims so far.
The insurer’s personal lines GWP was also down compared to this time last year “due to the planned withdrawal from a corporate partner arrangement”.
Despite this, “Petplan continues to perform well with significant growth, benefiting from successful marketing activities and digital developments as well as significant growth in the puppy and kitten populations during lockdown”.
As for LV=GI, GWP has decreased by 8.9% over the last year, from £512m in Q1 2020 to £466m at the end of quarter one in 2021.
The insurer said this dip “was influenced by a number of factors”, however the primary driver has been the “particularly competitive motor insurance market, which has seen insurers competing aggressively for a reduced number of switching customers, resulting in very soft rates”.
In addition, LV=GI also saw a reduction in travel insurance premiums due to the Covid-19 restrictions as well as a decrease in breakdown cover as less cars were on the roads during lockdown.
“As a result of these difficult trading conditions, we have been careful not to pursue revenue at all costs, as our focus remains on delivering sustainable profitable growth over the longer term,” the business added.
In quarter one, LV=GI has also continued to support its customers through the pandemic, especially those who may be experiencing financial hardship. To do this, it has reduced premiums, waived excesses and removed admin charges where possible.
Navigating ongoing uncertainty
Moving forward, Allianz Holdings anticipates that “trading conditions will continue to be challenging”, however it predicts that demand for both travel and breakdown cover will increase as lockdown restrictions in the UK ease from next week. Furthermore, it expects top line performance in commercial lines to improve and for Petplan to continue its growth trajectory.
LV=GI is also keeping a weather eye on the whiplash reforms, part one of which is due to be effective from the end of the month. The insurer is also continuing “to work with the FCA on the pricing practices reforms ahead of their implementation”.
Speaking on the firm’s results, Allianz Holdings chief executive Jon Dye said: “The first quarter of 2021 saw a dip of 10.6% in GWP for Allianz Holdings against the backdrop of reduced economic activity and challenging trading conditions in both the commercial and personal lines markets.
“The pandemic and lockdown continue to impact all lines of business in different ways and Allianz Insurance and LV=GI are extremely well positioned to navigate the ongoing uncertainty.
“We will continue to provide all the support we can to customers, brokers and colleagues as restrictions are lifted and the country cautiously reopens for business.
“Our approach remains to deliver long-term profitable growth and we will achieve this through providing excellent customer service and building strong relationships with our partners.
“Our business is well-balanced and has proven its resilience in exceptional circumstances, underpinned by the stability of our team and consistency of our approach to market.”