|Gross Written Premium (GWP)
|Combined Operating Ratio (COR)
*The GWP and COR figures shown for EOY 2018 and 2017 exclude engineering Inspection and Special Services. The GWP and COR figures reported at EOY 2017 were inclusive of Engineering Inspection and Special Services. See notes for the media.
Chief Executive Officer, Jon Dye said:
“I am satisfied with the financial performance delivered in 2018 in what was a stretching and challenging year for the business. Profits are up 42.5% over 2017 and the combined operating ratio has improved by 1.8%. Competition and rising claims costs during 2018 were significant challenges which makes the delivery of these results all the more creditable.
“It is also pleasing to deliver against our profitable growth target and not be diverted from this focus during the portfolio transfer process with LV=. I would like to thank all my colleagues for the part they played in meeting our objectives – they should all feel proud of their achievements in 2018.”
The GWP increase of 7.9% includes the LV= business that has been transferred in and the COR stands at a very respectable 94.7%, down 0.4% compared to the previous year. The underlying growth of 4.6% excluding the LV= transfers is also pleasing.
The transfer from LV= has gone smoothly thanks to the collective effort across the oganisation, including the 200 people in the project team alone, and the support of our broker partners. The portfolio is converting at expected levels but there is no room for complacency and we are taking nothing for granted.
Engineering, Construction and Power has benefitted from a significant investment in people and technology. The rebrand in October provided a platform to highlight its expansion into infrastructure specialisms such as renewable power and construction. Backed by a market leading service for health and safety inspections, strong growth is expected in 2019.
The transfer of business to LV= and its effects on the aggregate revenue has been referred to throughout 2018. The COR ended the year at 97.9%, a reduction of 2.2% compared to last year which is a good result. The underlying growth of 9.2% in the PL portfolio not transferred to LV= is also a good performance.
Petplan successfully delivered strong growth and a record profit. The expectation is that the business will go on performing well in 2019 because of its excellent reputation for claims handling, the strong relationship it has with customers and the investments made in technology.
Claims had a busy year helping customers following the severe weather events of 2018 as well as looking after business as usual claims. Delivering a first class claims service is a differentiator with brokers in an environment where customer demands are high. It is also important that brokers and customers are reassured about the commitment of the organisation to do all it can to combat insurance fraud. Last year Allianz saved £64.7m on claims through the application of anti-fraud measures. Catching fraudsters requires constant vigilance and should leaving the EU result in a significant economic downturn, the organisation will be keenly aware of the potential for insurance fraud to increase.
Jon Dye concluded:
“I believe the business can look forward to 2019 and beyond with great confidence and I say this for a number of reasons.
“We are part of a large and powerful Group that serves 88 million customers worldwide. In the UK, Allianz Insurance has five million customers and that number is matched by LV General Insurance. The Allianz Group investment in the joint venture will reach £713m when majority shareholder status is reached. This is a powerful statement of the Group’s belief in the future of the UK insurance market post Brexit.
“I also believe we have the best people but this is not just my opinion. In 2018 we were voted Commercial Lines Insurer of the Year and received other awards in areas including claims and technology. This shows that the ongoing commitment to training and developing our people pays off both for them and their careers and for the business partners and customers they engage with.
“Importantly, we have a clear strategy which is aligned to the Allianz Group’s Renewal Agenda 2.0 announced on the Capital Markets Day in November 2018. The Group has incorporated a simplicity ambition for its operating entities which is designed to provide an even better service to our customers, reduce complexity, deliver for our employees and make ourselves even more productive. These are excellent ambitions and I look forward to reporting on our progress during the course of the year.
“The concerns over Brexit are considerable and the industry’s partners and customers are understandably looking for reassurance. Regardless of the direction of the UK’s exit, I am confident that the Group’s geographic reach as well as a collective determination to work together means Allianz will provide the insurance solutions needed.
“An uncertain macroeconomic environment plays to the twin strengths of trust and dependability which Allianz UK is known for and I believe we will make strong progress against our goals in 2019.”
Jon Dye, Chief Executive Officer.