Retail suffers 20% fall in GWP

Allianz UK reported £825m in gross written premiums an increase of 2.9% in for the first half of 2009 over the same period in 2008.

Operating profit was down 6.1% to £88.3m from the insurer £94m it reported last year, but Torrance said this was ‘ahead of plan’. The combined operating ratio improved by 0.8% to 94.9% over the first half of 2008.

"A low interest rate economy also puts added pressure on the requirement to achieve a reasonable and consistent increase in rate strength ahead of claims inflation. Whilst there have been some positive signs in that direction, I am somewhat disappointed that in the second quarter, the market did not push on from the rate rises applied during Q1 of this year. Rate momentum must be regained as we progress through the remainder of the year if insurers are to make acceptable underwriting profits in 2010," said Andrew Torrance, chief executive officer of Allianz UK.

Group Results:

  • IFRS Operating Profit (before tax) £ 88.3m (2008: £ 94.0m)
  • Gross Written Premium £ 825.0m (2008:£ 802.0m)
  • Combined Ratio 94.9% (2008: 95.7%)

Divisional Results:

Commercial Business

  • Gross Written Premium £ 532.9m (2008: £ 495.6m)
  • Combined Ratio 91.8% (2008: 88.1%)

Retail Business

  • Gross Written Premium £ 292.1m (2008: £ 306.4m)
  • Combined Ratio 100.0% (2008: 107.1%)

Torrance added: "In the Retail business, the broker motor account continues to see GWP fall (20.0% compared to H1 2008) as we take the corrective action needed to restore this account to profit and I anticipate that there will be further reductions in top line as we progress through the year.

Torrance said the general Commercial business continued to perform strongly and ahead of plan. "However, the division’s results continue to benefit from the release of favourable prior year claims reserves and the profitability of business currently being written remains well below our target levels. Securing the relationship with the Lloyds Banking Group during Q2 was especially pleasing."

Allianz's Standard & Poor's rating of AA- (stable outlook) was reaffirmed.

Topics