Insurer Allianz today reported results for the first six months of the year. Gross written premium (GWP) for the period was higher at £914 million, compared to £861 million in H1, 2010. However, operating profit went down marginally to £77.5 million compared to £78.4 million in 2010.
GWP for its commercial and retail insurance businesses were higher at £522 million and £393 million respectively, compared £512 million and £350 million reported in H1, 2010. The cost of risk (COR) during the first six months for both commercial and retail operation increased to 95.9% and 96.4% respectively, from 95.2% and 95.6% recorded over the same period last year.
“I am pleased that we have been able to grow our top line by 6.1% in the first half of this year compared to the same period in 2010. The slight reduction in operating profit is driven by lower favourable prior year claims development in 2011,” said Allianz chief executive Andrew Torrance.
The “modest level” of GWP growth in commercial operations was attributed to higher business in commercial motors division.
“Elsewhere rate strength increases remained stubbornly at the low single digit percentage level – a reflection of a market which remains highly competitive and a policyholder base operating in an economy showing only very muted signs of a return to normality,” said Mr. Torrance.
Commenting on the company’s legal protection business, Mr. Torrance said the growth in both profit and GWP was “ahead of plan.”
“The changes to the civil litigation process for personal injury will mean significant change for this business. Work is ongoing to develop the future business model for this operation. However, we do not expect the changes to the personal injury compensation process to be felt significantly in the profit line until 2015 due to the extended earning pattern of this business,” he said.
The direct business has also fared well during the period, he said. “In the direct business, our online offering, Your Cover, is showing some early encouraging signs with GWP in Q2 achieving a pleasing level. Currently Your Cover Motor is live with the four major aggregators whilst the household product was launched in July,” he added.
The company became BMW’s sole underwriter for all of UK’s personal lines insurance products.
“This motor book offers the opportunity to build a portfolio of over 60 000 policies and GWP of £150m over the five years of the partnership. The winning of this new business and establishment of the new contact centre represents a major achievement and a significant step on the road to our goal of £1bn profitable GWP for Allianz Retail,” he said.
Talking about the recent riot claims in UK, he said Allianz is expecting £25 million in claims and said most of the claims will arise from property destruction, rather than business interruption.
The provider has already confirmed that they are the insurers for retailer JD Sports, one of the victims of recent riots. However, no estimates were given for the possible claims. “We are dealing with a number of claims from JD Sports outlets but it is too early to say at the moment what the total cost of these claims is likely to be,” a spokesman for Allianz said.