Allianz Holdings plc trading update for Q1 2021

Jon Dye, CEO, Allianz Holdings, commented: “The first quarter of 2021 saw a dip of 10.6% in GWP for Allianz Holdings against the backdrop of reduced economic activity and challenging trading conditions in both the commercial and personal lines markets. The pandemic and lockdown continue to impact all lines of business in different ways and Allianz Insurance and LV= GI are extremely well positioned to navigate the ongoing uncertainty. We will continue to provide all the support we can to customers, brokers and colleagues as restrictions are lifted and the country cautiously reopens for business.

“Our approach remains to deliver long-term profitable growth and we will achieve this through providing excellent customer service and building strong relationships with our partners. Our business is well-balanced and has proven its resilience in exceptional circumstances underpinned by the stability of our team and consistency of our approach to market.

Allianz Insurance

Commercial lines GWP was down in the first quarter compared to Q1 2020 as we see the economic impacts on our customers play through into our revenue. However, actions which have been put in place to address specific challenges in various lines of business are having a positive impact on performance and the business is well-positioned to build on its strong base.

Overall Personal lines GWP was also down due to the planned withdrawal from a Corporate Partner arrangement. However, Petplan continues to perform well with significant growth, benefiting from successful marketing activities and digital developments as well as significant growth in the puppy and kitten populations during lockdown.

We continue to manage COVID-19 Business Interruption claims proactively and efficiently with payments made on well over 80% of accepted claims, comparing favourably with the market in the Financial Conduct Authority (FCA) published data. Our claims service was also recognised by the Gracechurch Mid-Market Claims report where Allianz was awarded the coveted Gracechurch Service Quality Marque for the fifth year in a row in March.

To help our policyholders navigate the fast changing environment as the country is coming out of lockdown, we introduced free legal advice via Lawphone and provided restarting business guidance for brokers and customers on our website. We’ve also launched an information campaign to help our customers and brokers avoid the pitfalls of underinsurance. With businesses diversifying to stay open, the change in operations may mean there are gaps in cover, or customers may have reduced cover and will need to consider if they still have the right protection in place as lockdown restrictions ease.

2021 has seen the launch of Allianz’s new broker proposition – “strong partners for what’s ahead” – underlining Allianz’s long-term partnership approach to working with brokers. This includes the Allianz Sports Fund – supporting brokers’ local grassroots sports club - Mental Health First Aider programme, LinkedIn Learning for brokers, Allianz Partners Academy and the extremely popular broker apprenticeship programme.

LV= General Insurance

GWP in the first quarter dropped by almost 9% compared to Q1 2020, to £466m. This reduction was influenced by a number of factors, most notably the current particularly competitive motor insurance market which has seen insurers competing aggressively for a reduced number of switching customers, resulting in very soft rates. The first quarter also saw a reduction in travel insurance premiums due to ongoing restrictions caused by the pandemic and reduced road use led to a decrease in premiums for breakdown business. As a result of these difficult trading conditions, we have been careful not to pursue revenue at all costs as our focus remains on delivering sustainable profitable growth over the longer term.

Operationally, throughout the first three months of the year we’ve continued to support our customers during these difficult times, especially those suffering financially, by reducing premiums, waiving excesses and removing admin charges where possible. We’re proud that our efforts to support our customers by providing good products with an excellent service have again been recognised. We were ranked the top insurer by the Institute of Customer Service in its biannual UK Customer Satisfaction Index for the fifth consecutive time, and What Car? named Britannia Rescue the best breakdown partner in its annual reliability survey.

The start of 2021 also saw us announce two major community partnerships. As part of our commitment to ensure we have a positive influence on society, we are partnering with Family Action, a charity founded in 1869 which works with 60,000 families through over 160 community-based services. Over the next three years, we’ll support their free national helpline – FamilyLine – by donating £1 million through corporate donations, fundraising and charity matching.

We also continued our involvement in cricket by becoming the title partner of domestic men’s and women’s Test matches and the County Championship until the end of 2023.

Outlook for Allianz Holdings

Looking ahead to the next quarter, trading conditions will continue to be challenging, especially on motor, but we expect demand for travel insurance and breakdown to pick up, with more people on the roads and the planned resumption of foreign travel. We anticipate an improvement in top line performance for Commercial lines and continued growth for Petplan.

The launch of the much-awaited whiplash claims portal will hopefully make a significant difference to how these claims are managed and ensure genuine claimants get the right compensation. LV= GI also continues to work with the FCA on the pricing practices reforms ahead of their implementation.

Authored by Allianz