Allianz ‘very much committed’ to personal lines motor broker channel despite ‘volatility’ – Colm Holmes

International insurer Allianz is “very much committed” to the personal lines motor broker channel in the UK despite “inflation running at 11%” in that market. 

This was according to Allianz Holdings chief executive Colm Holmes, who spoke to Insurance Times as the insurer released its H1 results for 2023 last week (10 August 2023). 

Allianz Holdings grew its revenue by 7% in the UK during the first half of 2023, despite its combined operating ratio (COR) seeing a slight rise. However, the firm’s operating profit dropped 5.5% year-on-year to £112.8m, which it said was primarily driven by inflation.

Talking to Insurance Times, Holmes explained that strong financial performance for the business’ specialty business had been “somewhat offset by a flatter position year-on-year” in personal motor, commercial motor and home lines. 

He said that, as a consequence of “volatility” in these lines, they had been handled by Allianz with the “greatest level of discipline” in terms of underwriting and growth, with rate being delivered into these classes in an attempt to “counter the effects of inflation”. 

Holmes said Allianz had seen “inflation running at 11% in personal lines motor for the first half of the year and over 10% in the fleet business”. 

He added: “We’ve obviously been rating hard against that continuing inflation, but we expect to see the impact of that rating coming through more in the second half of 2023 and then more fully in 2024.” 

Volatility 

Back in June, Ernst and Young (EY) warned that losses were expected to continue in the UK motor insurance market after the sector experienced its “worst performing year in a decade in 2022”. 

Prior to that in March, RSA Insurance announced that it would exit the UK personal lines motor market after conducting a “thorough review of its business”.

And last month, Zurich UK also released a statement that detailed its plan to withdraw from regional and national panel broker distribution channels for its personal lines home and motor business and refocus efforts to concentrate on the high net worth market.

Despite these recent exits, Holmes emphasised Allianz’s commitment to broker distribution for the personal lines motor market and the UK motor market generally. 

He explained: ”It’s a strong channel for us and we had very good performance there – we have very strong relationships with our key partners in that space and we want to continue to work there.

”We’re very committed to that channel, will remain committed to it and actually want to grow in that space”.

”But of course, we’re taking action in terms of delivering performance in terms of rates and working very closely with our broker partners in terms of risk selection.” 

Holmes added that Allianz was committed to supporting its broker partners through varying market cycles, with recognition that “insurance is a cyclical business”.