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Jon Dye, CEO, Allianz Holdings
Feb 19, 2021 09:35 GMT
Allianz delivers robust results for 2020
Allianz Holdings plc, the holding company which owns Allianz
Insurance andLV= General Insurance (LV= GI) announces its results
for the full year ended31 December 2020.
Allianz Holdings:
FY 2020* FY 2019** Variance
Gross Written Premium £3922m £1991m +97%
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Operating Profit £290m £98m +196%
Combined Ratio 94.4% 98.5% -4.1pp
*Includes Allianz Insurance, LV= General Insurance and L&G
GeneralInsurance
**Allianz Insurance only
Financial highlights:
• Expanded Allianz business, incorporating LV= General
Insuranceand L&G General Insurance
- Almost doubles
GWP
- Delivers £192m
(196%) increase in Operating Profit
- Shows 4
percentage point improvement in COR.
• Total impact of COVID-19 Business Interruption BI claims
in2020 was £175m, net of reinsurance
• Payments have been made on 1800 COVID-19 BusinessInterruption
(BI) claims to date, totalling £40m and including78% of valid SME
claims.
Jon Dye, CEO, Allianz Holdings said: “The results we are
announcing todaydemonstrate the resilience of our business and the
benefits that can begained through managing a large and diverse
portfolio. The COVID-19 crisishas impacted different lines of
business in different ways, for example thereduction in claims
frequency in some books and the significant claims forBusiness
Interruption. Other external factors impacting the 2020
figuresincluded rising claims inflation and supply chain
challenges, large losses,weather events and the general slowdown in
economic activity.
“But our business is resilient. Our successful 2020 result was
built on theability of our colleagues to adapt to new working
environments, the trust andsupport of our brokers, intermediaries,
customers and suppliers and ourflexibility to adapt our products,
processes and protocols to the changingdemands and dynamics of the
market.”
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Allianz Insurance:
FY 2020 FY 2019 Variance
Gross Written Premium £1880m £1991m -5.6%
Operating Profit £108m £98m 10.2%
Combined Ratio 97.5% 98.5% -1.0pp
Allianz Insurance experienced an overall small decline in
premium income(5.6%) compared to 2019. In the Commercial book this
was due to the impactof COVID-19 on economic activity, with Motor
and Casualty lines seeing theimpact of increased mid-term
adjustments, return premiums, reducedexposures and lower new
business levels. In Personal Lines, the exit of alarge Corporate
Partner arrangement also impacted the top line figure.
Total Operating Profit increased by 10% (£10m) compared to FY
2019.COVID-19 business interruption claims impacted the 2020 result
by £175m,net of reinsurance. These losses have been offset by the
claims effects of theeconomic slowdown, in particular in Commercial
Motor and Pet.
Allianz adopted a responsible and market-leading approach to
dealing withBI claims, settling quickly and fairly from the outset.
As at the end of January,payments had already been made on 75% of
all valid claims. This approachhas received extremely positive
feedback from brokers.
Allianz has retained its keen focus on building stronger
relationships in themarket. Maintaining an ongoing dialogue with
brokers has been crucial andbroker engagements with Allianz
increased significantly in 2020 over theprevious year. Supporting
customers has also been a top priority. Businessrisks are changing
and Allianz has been proactive and flexible to enablecustomers to
change or adjust business descriptions, sums insured,
policyconditions and exposure, as well as allowing changes to
payment terms.
In addition to the £10.1m Allianz donation to the COVID-19
Support Fundand the £700,000 payment to pet charities to cover
their lost revenue, Allianz
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also donated £300,000 to the Help Musicians UK Coronavirus
Support Fund,to support musicians who are struggling due to the
pandemic. Allianz hascontinued to support its corporate charity,
Mind, maintaining its fundraisingmomentum through virtual events
and £325,000 in 2020. The launch of theAllianz Community Fund as
part of its emergency Coronavirus funding sawdonations to local
charities, and the company doubled the volunteeringallowance for
colleagues, enabling everybody to spend 20 hours supportingtheir
local community.
In Commercial lines, and particularly in the Property and
Packages accounts,rising claims inflation, weather events and the
pattern of large lossescombined to put pressure on the book, along
with issues due to lack of ratestrength. Despite this, 2020 saw the
business make good progress to improveunderlying profitability,
driving premium increases in excess of claimsinflation while
addressing areas of volatility to deliver improved
portfolioperformance in a number of areas, especially Property
lines.
The Engineering, Construction & Power insurance business had
a successfulyear in 2020, with growth in premium and profit.
Special mention should alsobe made of the Engineering Inspection
business where Allianz’s EngineerSurveyors have maintained
extraordinarily high service levels in the face ofconsiderable
challenges in accessing plant and equipment. This contributedto
Allianz EC&P earning NPS loyalty leadership for the 13th
consecutive year.
Personal Lines performed well in 2020. The primary driver was
Petplan whichhas now become a £500m business and saw profit ahead
of 2019. This resultwas supported by a successful programme to
drive more sales online. AllianzLegal Protection and the Corporate
Partner business have both undergonesignificant restructuring and
both returned to profit in 2020. Allianz MusicalInsurance saw a
decline in premium income as a result of the downturn in thelive
music industry but remains robustly profitable.
Q4 2020 saw the launch of Allianz’s sponsorship of England
Rugby. As well aspartnering with the men’s and women’s England
rugby teams and the AllianzPremier 15s, the partnership shows
Allianz’s support for women’s sport astitle partner of Inner
Warrior, the grassroots programme to encourage girlsand women into
sport.
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LV= General Insurance:
FY 2020* FY 2019** Variance
Gross Written Premium £2042m £1571m +30%
Operating profit £183m £81m +126%
Combined ratio 91.3% 96.9% -5.6pp
*Includes L&G General Insurance which became part of LV= GI
in January2020.
**Numbers reported for 2019 have been restated to be shown on a
consistentAllianz accounting basis.
Steve Treloar, CEO of LV= General Insurance, said: “2020 was
anextraordinary year. The impact COVID-19 had on everyone’s lives
wasunprecedented and from a business perspective it certainly
wasn’t without itsdifficulties. In a short space of time, we were
faced with the challenge ofgetting all 4,000 of our people safely
working from home, which I’m pleasedto say we successfully managed.
Throughout the year, we also focused ourefforts on ensuring we
supported our customers, our partners as well as ourlocal
communities. I’m proud of what our people achieved and our
businessremains in a robust position.”
LV= GI enjoyed a strong year from a trading perspective. We saw
a 30%growth in Gross Written Premiums (GWP) to just over £2bn,
mainly due to theacquisition of L&G General Insurance, (FY
2019: £1571m) and OperatingProfit at £183m (FY 2019: £81m), with
the latter being achieved through acombination of being more
efficient in the way we manage our business aswell as an improved
performance in our motor business. Our Combined Ratio(COR) reached
91.3% (FY 2019: 96.9%). In LV= Broker, GWP increased by
16%,primarily due to significant growth across a number of lines
includingstandard motor, specialist motor and home, and growth in
LV= Retailremained broadly flat, reflecting our more cautious
approach to pricing in asoft market.
In the early months of the pandemic, with fewer people on the
road we saw areduced level of claims frequency which has resulted
in an improved
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profitability of our motor book; although we expect the
performance of thisline of our business to return to more normal
levels throughout 2021. InHome, claims frequency remained fairly
static but as a result of people beingat home more we did observe a
number of new trends in the year including:225% increase in fire
claims, 40% increase in the proportion of blockages and21% increase
in the proportion of bicycle thefts from gardens.
Throughout the pandemic, we focused much of our efforts on
helping ourcustomers across all channels and introduced a series of
measures, such asoffering refunds to those struggling financially,
waiving claim excesses, notcharging administration or cancellation
fees, lowering our motor rates andoffering enhanced cover to NHS
and key workers. We also increased theamount we paid to certain
suppliers and didn’t furlough any of ouremployees. Our commitment
to helping people and communities recover andrebuild from COVID-19
also extended to grassroots sport as we announcedthe #Funds4Runs
initiative with the England and Wales Cricket Board (ECB).The £1m
investment, jointly funded by the ECB and LV= GI, will focus
onsupporting key areas where access to cricket has been limited,
particularlychildren from deprived backgrounds, diverse
communities, disability groupsand women and girls’ programmes.
Operationally, the full integration of the L&G General
Insurance business intoLV= GI, which was announced in the summer,
continued to progress well andwe’ve now started to migrate business
across to LV= Broker. Our approach tocustomer service also saw us
achieve our highest ever position in the UKCustomer Satisfaction
Index in July (joint eighth), building on consecutive top10 places
since January 2019, and LV= Broker was awarded the
prestigiousServiceMark Accreditation from the Institute of Customer
Service. We werealso named a Which? Most Recommended Provider for
both Home and Motor.
As we look forward, much of our focus will be on working with
the FinancialConduct Authority to introduce the changes from the
General InsuranceMarket Study, as well as managing the uncertainty
of claims inflation whichis inherently linked to the future
strength of the UK economy.
In conclusion, Jon Dye said: “The strengths that have delivered
these robustresults in 2020 will also serve us well as we look to
the future. The UK is stillin the midst of the Coronavirus crisis
and is yet to work through theimplications of the Brexit deal. But
Allianz has a strong platform from whichto deliver further
profitable growth and we will maximise this potential by
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continuing to invest in the skills of our people and the
products and serviceswe provide to our customers, focusing on our
digital and data capabilities.”
ENDS
Notes to Editors
Media Contact: David Keel, Head of Communications, Allianz
Insurance
Mobile - 07771 794 978 / [email protected]
About Allianz Holdings plc
Allianz Holdings plc is the non-regulated holding company which
owns theprincipal insurance operations of Allianz SE in Great
Britain.
About Allianz
The Allianz Group is one of the world's leading insurers and
asset managerswith more than 100 million retail and corporate
customers in more than 70countries. Allianz customers benefit from
a broad range of personal andcorporate insurance services, ranging
from property, life and health insuranceto assistance services to
credit insurance and global business insurance.Allianz is one of
the world’s largest investors, managing around 740 billioneuros on
behalf of its insurance customers. Furthermore, our asset
managersPIMCO and Allianz Global Investors manage almost 1.6
trillion euros of third-party assets. Thanks to our systematic
integration of ecological and socialcriteria in our business
processes and investment decisions, we hold theleading position for
insurers in the Dow Jones Sustainability Index. In 2019,over
147,000 employees achieved total revenues of 142 billion euros and
anoperating profit of 11.9 billion euros for the group.
mailto:[email protected]
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These assessments are, as always, subject to the disclaimer
provided below.
Cautionary note regarding forward-looking statements
This document includes forward-looking statements, such as
prospects orexpectations, that are based on management's current
views andassumptions and subject to known and unknown risks and
uncertainties.Actual results, performance figures, or events may
differ significantly fromthose expressed or implied in such
forward-looking statements. Deviationsmay arise due to changes in
factors including, but not limited to, thefollowing: (i) the
general economic and competitive situation in the AllianzGroup's
core business and core markets, (ii) the performance of
financialmarkets (in particular market volatility, liquidity, and
credit events), (iii) thefrequency and severity of insured loss
events, including those resulting fromnatural catastrophes, and the
development of loss expenses, (iv) mortalityand morbidity levels
and trends, (v) persistency levels, (vi) particularly in thebanking
business, the extent of credit defaults, (vii) interest rate
levels, (viii)currency exchange rates, most notably the EUR/USD
exchange rate, (ix)changes in laws and regulations, including tax
regulations, (x) the impact ofacquisitions including and related
integration issues and reorganizationmeasures, and (xi) the general
competitive conditions that, in each individualcase, apply at a
local, regional, national, and/or global level. Many of
thesechanges can be exacerbated by terrorist activities.
No duty to update The Allianz Group assumes no obligation to
update anyinformation or forward-looking statement contained
herein, save for anyinformation we are required to disclose by
law.
Contacts
David KeelPress ContactHead of Communications, Allianz
[email protected]
mailto:[email protected]:07771794978