Profit down but GWP up at Allianz in Q1

Allianz’s Q1 2010 IFRS operating profit slipped 10.7% to £36.7m from £41.1m in the same quarter last year, but gross written premiums grew 4.4% to £411.3m and the combined ratio remained relatively stable at 96.5% versus 96% in Q1 2009.

The company attributed the dip in profits to lower investment returns prompted by the current low-interest-rate environment.

Gross written premiums for commercial lines increased to £237.3m from £225.3m, and the combined ratio increased to 92.6% from 90.6%. In retail, gross written premiums increased to £174m from £168.5m, and the combined ratio fell to 101.7% from 102.7%.

Allianz chief executive Andrew Torrance described the results as a “robust set of results to start off the year” that were ahead of the company’s projections, adding that absent major weather events the company is well placed deliver its expected profit

However, Torrance expressed dissatisfaction in the rate increases the company had achieved in commercial lines, describing attaining satisfactory rates as “a priority” for the business going forward. “All of our commercial underwriters are very focused on this goal and we want our broker partners to work with us to ensure that rates put to policyholders reflect the exposures we are taking on,” he said.

Allianz also reported a decline in broker retail motor policies during Q1 “as a result of corrective rating action on this unprofitable account”.

“We anticipate continuing to move rates up throughout the rest of the year,” said Torrance. “Regrettably, the household market is not yet hardening in the same way with rates not reflecting the more frequent significant weather events now being experienced.”