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%

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.”

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

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. 

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

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

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 / david.keel@allianz.co.uk

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:david.keel@allianz.co.uk

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 Insurancedavid.keel@allianz.co.uk07771794978

mailto:david.keel@allianz.co.uktel:07771794978