Allianz Cornhill to make personal lines acquisitions to enhance distribution capabilities

Allianz Cornhill will look to make further personal lines acquisitions in a bid to strengthen its hold on distribution, its chief executive said this week.

The announcement came as the insurer reported record profits in 2006 of £239.4m. This saw the company bring its personal lines book back into profitability after it slumped into the red in 2005.

Chief executive Andrew Torrance said the insurer's initial focus would be on acquiring specialist personal lines businesses.

"We want to have more control over distribution. We will look at specialist distribution, which will more likely be in the personal lines space."

Last year the company bought high net worth specialist Home & Legacy and SME broker Premierline Direct.

He said: "These acquisitions enhance our distribution capabilities and presence in a number of key markets. The group will look to make further acquisitions if the right opportunities can be identified at a reasonable price, coupled with the prospect of acceptable returns and a good strategic fit."

Torrance said the insurer would maintain the independence of acquired intermediaries where it was "important" to do so.

Meanwhile, Alliance Cornhill reported a 16% increase in pre-tax profits in 2006. Profit before tax rose to £234.9m, from £206.4m in the previous year. Gross written premium fell 2% to £1,634m.

The company's personal lines book returned to profit, posting a combined ratio of 99.2% compared to 101.5% in 2005. The private car book had a combined ratio of 98%.

Torrance said he expected personal lines volumes to increase in 2007, which was "already reflected in the first two months' trading".

Personal lines premiums fell by 12% in 2006 to £242.9m.

Allianz Cornhill's commercial lines portfolio increased its profitability, returning a combined operating ratio of 92.3% compared to 92.5% in 2005. Premium volumes grew by 1% in the period to £1043.1m.

Torrance said the commercial division's performance was "exceptional in difficult market conditions".

He highlighted the contribution of the company's new London property owners' team, launched in the latter half of 2006, to the division's performance.

"I fully expect us to build a market leading position [in this market] over the next three years," he said.