EXCELLENT GROWTH AND STRONG PROFIT IN A YEAR OF INVESTMENT FOR ALLIANZ

IN A YEAR OF CONSIDERABLE INVESTMENT IN THE BUSINESS ALLIANZ DELIVERS

EXCELLENT GROWTH AND STRONG PROFITS

Business Highlights:

• Strong financial performance with 12% growth
• A year of significant investment
• 450 new jobs created in the UK
• Approximately 500,000 more policies in force than in 2013
• Brand recognition doubled since 2013
• On target to deliver long term profitable growth plans

Group Results Breakdown                                               EOY 2014                   EOY 2013

Gross Written Premium                                                        £2,164m                     £1,931m

IFRS Operating Profit (before tax)                                        £143m                        £171m

Combined Ratio                                                                    97.6%                         95.9%

Divisional Results Breakdown                                        EOY 2014                      EOY 2013

Commercial -

Gross Written Premium                                                        £1,056m                      £1,001m

Combined Ratio                                                                    94.5%                         96.3%

Retail -

Gross Written Premium                                                         £1,107m                    £931m

Combined Ratio                                                                    101. 3%                      96.1%

Statement from Chief Executive Officer, Jon Dye

Allianz UK’s revenue grew by an excellent 12.0% in 2014, which is well ahead of our expectation, and our profit performance also comfortably exceeded plan. The Combined Operating Ratio shows that we are delivering a good level of underwriting profit at the same time as significantly growing the business, which is a satisfying outcome in a highly competitive market.

Allianz has significant growth ambitions in the UK and 2014 has been about building for the future.We made substantial investments in a number of areas to support our expansion plans. We delivered new products to market and improved our digital capability over the last year and this has played a significant part in our progress. We also created over 450 new jobs in the UK, and invested in our market-leading talent development programmes, most notably the Allianz UK Underwriting Academy.

The investment in our brand is also significant. Since 2013 we have virtually doubled the public’s level of recognition of the Allianz brand from 30% to 59% and their willingness to buy from us, based on that recognition, has also risen. The global market research company, TNS, also reported that Allianz is the fastest growing general insurance brand in the UK.

The results of the 2014 Net Promoter Score market research surveys confirmed that we are outperforming our competitors when it comes to customer service. Allianz’s Commercial business delivered its best performance to date and increased its lead over the competition to become the clear loyalty leader. Meantime, our Engineering and Retail Broker businesses retained their No1 position.

The conclusion I draw from these results and the measures we are taking is that our long term target of growing profitably to a £3bn business in 2018, is clearly achievable.

Commercial

The business performed strongly, with revenue growing by 5.6% in what was an increasingly challenging market. Combine this growth with the delivery of a 94.5% COR, a 1.8% improvement over 2013, and it is clear that our strategy is delivering and the business is going from strength to strength.

The more proactive approach to trading in the market is clearly paying off and our well-established reputation for being highly professional clearly resonates with our broker partners. I have already referred to our Net Promoter Score performance and the positive feedback from brokers has continued in relation to the new mid-corp propositions we introduced in 2014 as well as for the experience of trading via the QuoteSME platform.

Engineering delivered a GWP that was ahead of the previous year and at a good level of profit. This market leading business is going through a process of modernisation and I am confident that it will deliver an even stronger level of performance going forward.

Retail

Allianz’s personal lines business grew by 19.0% compared to 2013 and this growth was achieved across all product lines. This is an excellent result and at the year end the GWP stood at £1.1bn - a new high for the business.

Our COR is very close to expectations at this stage of our growth plan as it reflects the investment in our systems, the brand, our digital capability and the set up costs associated with winning new corporate partner deals.

We have invested strongly in strengthening our proposition for the customer, and I am pleased to report that we had approximately 500,000 more policies in our core business areas at the end of last year than we did in 2013. Approximately 170,000 of that growth came from our pet protection business which continues to go from strength-to-strength as the undoubted market leader. Our broker business has also continued to grow positively in line with our strategy.

Three parts of the business achieved notable successes last year. Petplan now protects 1.1million pets which is a record for the business. There is still room for growth with approximately 50% of pets not protected by insurance.

The Corporate Partner business grew well ahead of 2013 and this was primarily due to the pet insurance relationship with Sainsbury’s and the overall performance of the motor portfolio. Winning two significant corporate partnerships during the year was very satisfying and in line with our strategy.

And finally, the Direct business grew its GWP by 58.1% and now has 250,000 policies in force. The investment in Direct’s digital capability has been considerable and we will be patient when it comes to achieving the levels of profitability needed to build a sustainable direct business. I am confident that this still maturing business is heading in the right direction.

Conclusion

We have made a considerable investment in our workforce and this has been the case for many years. I believe it is the quality of the people at Allianz that creates a competitive advantage because it delivers a better customer experience which in turn produces better financial results.

Having good people also pays off in other ways and 2014 was an excellent year for winning industry awards, most notably the General Insurer of the Decade and Commercial Lines Insurer of the Year. Every single success is an achievement not only for the people who collect the award, but also for the efforts of those who support them and I thank them all for their hard work.

Our strategy is completely in line with the overall Allianz Group objective of profitably growing its Property and Casualty business. Our performance in 2014 has achieved that goal and I believe we have real momentum for further growth. I look forward to this year with enthusiasm and confidence that I will be able to report more progress towards meeting our long term plans for the business.

Jon Dye,

Chief Executive

Notes for Editors:

1. Other Allianz Award Successes in 2014

• Insurance Brand Campaign of the Year - Insurance Times Awards
• Commercial Motor Team of the Year - Post Underwriting Service Awards
• Commercial Property Team of the Year - Post Underwriting Service Awards
• IT Manager of the Year (Sharon Warrington) - Chartered Institute for IT.
• Best Direct Pet Insurance Provider – Your Money Awards
• Underwriter of the Year – British Insurance Awards
• Customer Care Initiative of the Year - Insurance Times, Claims Excellence Awards

2. Allianz Insurance is one of the largest general insurers in the UK and part of the Allianz SE Group, the largest property and casualty insurer worldwide. Around 85 million private and corporate customers rely on Allianz's knowledge, global reach, capital strength and solidity to help them make the most of financial opportunities and to avoid and safeguard themselves against risks. In 2014, over 147,000 employees in more than 70 countries achieved total revenues of approximately 122.3bn euros.

3. Media Contact: Mark Bishop, Group Communications Manager

Contact Telephone Numbers:

Work - 01483 552731

Mobile - 07802 925053

Email – mark.bishop@allianz.co.uk