Allianz Holdings describes communication with brokers as ‘great success over 2020’

Allianz Holdings said that its communication with brokers has been “the real great success over 2020” thanks to the use of “virtual technologies” to manage “this new virtual environment that we’re working in”.

Speaking to trade journalists last Friday following the publication of Allianz Holdings’s full year financial results, chief executive Jon Dye explained that the insurer’s contact with brokers has actually increased over 2020 thanks to the use of digital communication tools.

He said: “We have managed in this new virtual environment that we’re working in to maintain really strong relationships with our brokers.

“That has been really very important and we have used virtual technologies to maintain contact with our customers and indeed we can see that the level of contact between Allianz and its brokers has gone up in the course of 2020 because we’ve used these forms of virtual interaction to stay in touch with them to a greater extent than were doing before we got into the pandemic.”

Describing these virtual communication methods as a “great success”, Dye added that Allianz Holdings plans to continue using digital tools to connect with brokers both through and following the pandemic as “communication flows on critical issues” is a “really critical thing”.

He continued: “The real great success over 2020 has been the way that we’ve used these sorts of media to connect with brokers on all sorts of different levels. That is now a pretty well-established rhythm that we will want to continue.

“It’s been very important that we communicate clearly on the key issues that are before us as we move through the pandemic and whether that’s been about our approach to mid-term adjustments or changing sums insured, all of those good things, which of their customers we can help with, those sorts of very specific things. I think the clarity of communication on those things has been really important.

“The same would be true for our approach to the business interruption claims where I think we’ve been really clear on where we’re going and we’ve been seeking to give brokers as much information as we can, so that they can relay that advice to their customers because clearly that’s what they’re there to do.

“Maintaining the communication and making sure that our advice to them and our communication flows on critical issues is clear. For me, that’s the really critical thing.”

While speaking on the challenges surrounding business interruption claims and the pandemic, Dye added that both brokers and insurers should be proud.

“The market has come through this in really good shape and we have been recognised, certainly by both the regulators,” he said.

“As an industry, we’ve come through this with a very high level of operational resilience and we have been there for our customers and I think we should be proud, as an industry, of what we’ve achieved there – the brokers and the insurers.”

Tough year for underwriters

Allianz Insurance, part of Allianz Holdings, reported a 5.6% dip in gross written premium (GWP) in the 12 months to 31 December 2020. For Dye, this decline is clearly linked to the Covid-19 pandemic.

He said: “The economy has been hugely affected by Covid-19 and that slowdown in economic activity, you can also see flowing through our results.”

Speaking on the firm’s commercial lines performance, Dye added: “In commercial, it clearly was a tough year to be a property underwriter, there’s no getting away from that and in both the property and packages accounts, claims inflation and the weather and some large losses on top of the pandemic put a lot of pressure on those books. I don’t think they have enjoyed the right level of rates now for some time, which we are now correcting.

“In 2020, I was actually very pleased with the way the business acted to deal with the underlying profitability issues in those accounts, which has driven premium increases in excess of claims inflation, which is absolutely what is required there and I’m sure those accounts will now come around.

“Clearly, this is a market phenomenon - the Allianz property accounts are not the only ones which have been suffering from these effects but it’s very important that we take the necessary action to fix it and that’s I think what we’re doing.”

Allianz Insurance’s personal lines book performed well in 2020, which Dye attributed to its Petplan product, which is now has more than £500m in revenue.

“During the pandemic, there was increased interest in pet ownership and clearly Petplan has been there to support customers as they’ve bought their lockdown puppies and kittens,” he explained.

“That was supported by lots of work to move the business online, which we already had in train but which clearly paid off spectacularly as the world moved online through the months of the pandemic.”

However, the fly in the ointment for personal line figures resulted from the firm exiting “a large corporate partner arrangement, which made quite a difference to the top line figure”.

“That’s with the EE mobile phone account, which in 2019 would have delivered about £90m top line. Made quite a big difference to the top line, not much difference to the bottom line,” Dye added.

Healthy boost

Allianz Holdings as a group saw a huge climb in its year-on-year figures thanks to the acquisition of LV= General Insurance (LV=GI).

LV=GI in turn bought L&G General Insurance, further bolstering Allianz Holdings’s numbers.

For example, GWP increased by 97% between 2019 and 2020, while operating profit improved by 196%.

This trajectory is a box ticked as far as Dye is concerned.

He said: “The acquisitions have done exactly as we expected – they’ve basically doubled the size of the company and given it a very healthy boost in terms of its profitability as well.

“This is all of the work of our M&A over the last couple of years coming through in exactly the fashion we would have expected.”

Reflecting on Allianz Holdings’s results as a whole, Dye confessed 2020 was “a rather extraordinary year, unlike any other”.

He concluded: “I think these results demonstrate we’re in a strong place, it’s a resilient business and clearly the scale and diversity of the business is paying us a dividend here.

“Covid-19, just like any other carrier, has affected us in different ways in different lines of business.

“Some, like business interruption, have created a substantial claims event, there are influences in terms of claims frequencies in pretty much all of the other books one way or another actually.

“It was clearly very important that we stayed connected to our distribution and I think we’ve worked very closely with our brokers and other partners throughout this whole period to make sure that we’re able to support them as well.

“So, been a strong story in terms of the resilience of the business and the way we’ve been able to continue to support both the end customers and intermediaries through this period.”