ALLIANZ MAINTAINS ITS STRONG PERFORMANCE IN 2016

Business Performance - Key Points

• Excellent 37% profit growth over the previous year
• Combined Operating Ratio (COR) improves by 1.7%
• Gross Written Premium down over same period last year as expected

Company Results                                              HY 2016                            HY 2015

• Gross Written Premium                                £ 1,098m                           £ 1,138m
• IFRS Operating Profit                                   £   86.9m                           £   63.6m
• Combined Ratio                                                 96.3%                                98.0%

Statement from Chief Executive Officer, Jon Dye

Allianz has delivered a strong underwriting performance despite the extremely challenging market conditions.

At the half year point, the Commercial Lines GWP stood at £578.0m, up 0.9% over the same period last year. Growth has slowed during the second quarter but this reflects the prevailing market conditions and our appetite to trade remains strong. The 91.2% COR is an improvement of 4.0% over the previous year and this is an outstanding result.

The Engineering business has delivered top line growth and a strong underwriting performance and recently announced three senior underwriting appointments to grow its construction portfolio.

The Personal Lines business delivered a GWP of £520m at the half way point which is down 8.0% on the previous year because of the need to address the issues in our private motor book. The COR has reduced to 99.9%, an improvement of 1.3% compared to the first quarter of this year and 2.7% compared to the half way point in 2015.

Petplan, Legal Protection and the Musical Insurance business have all delivered a strong financial performance. The world’s largest animal health insurance provider, Petplan, now has 1.3m customers and continues to grow at around 10% year-on-year at a strong level of underwriting profit.

As I have reported previously, true customer centricity is at the heart of Allianz’s Renewal Agenda so I am pleased to report a number of initiatives during the first half of the year that demonstrate our focus on delivering for our customers.

In January the business announced that it was removing the average condition when settling claims for SMEs and clarifying what constitutes fair presentation of risk. These steps are designed to provide both fairness and transparency for end customers as well as simplifying the situation for our broker partners. I am pleased to report that the feedback from the broking community has been overwhelmingly positive.

We have been able to build on the decision to remove average by recently announcing a new data sharing initiative to help reduce the 40% of SMEs that are underinsured. Using internal and external data, Allianz is able to identify SME customers that have insufficient cover and we are proactively contacting brokers to alert them of their customers’ position.

Many businesses now consider cyber crime as the biggest operational and reputational threat they face. In another move designed to help customers, Allianz has partnered with a cyber security consultancy to provide a free online cyber risk assessment tool. Based on the government’s own equivalent assessment which costs £300 for businesses to use, Allianz’s risk management website for customers, Risk Director, provides a tailored cyber security report enabling businesses to apply for official Government certification.

The business launched a range of new products during the first quarter and this has been followed by further proposition activity in the second quarter. One example, is the online marine cargo proposition designed for SMEs and Mid Corporate businesses which is now available on the e-trading platform QuoteSME.

Finally, research with brokers has led to the launch of an enhanced Motor Trade proposition to support the ambition of becoming the number one insurer in the UK in this class. The UK motor trade is thriving so we have high hopes for this proposition.

May was a momentous month for the Allianz sponsored Saracens Rugby team, winning both the 2015/16 Premiership and European Champions Cup. This is truly outstanding achievement and my congratulations go to the Chairman and owner Nigel Wray, the Director of Rugby Mark McCall and his coaching team and most of all to the players who have been nothing short of phenomenal.

The prospect of watching the ParalympicsGB team compete at the Rio Paralympics from 7 September is very exciting, and our partnership with the British Paralympic Association means that many of our employees have already had the privilege of meeting some of the Paralympians competing.

Allianz is sponsoring the Paralympic sports coverage on Channel 4 throughout the whole of 2016 and through watching the achievements of the Paralympians taking part I hope that many people will feel motivated and dare to believe that they too can overcome their own challenges and reach their goals.

The first six months of this year have seen a combination of change and consistency. The change has come in the decision to restructure the business around one trading team, Commercial and Personal, and withdraw from the direct home and motor market. We have moved through this change process quickly starting with the mid-April announcement to having a revised governance structure in place on 1 July. I would like to thank my colleagues for their hard work and dedication during this process and offer continued support to those people who have been adversely affected.

The single trading division focus is already starting to deliver on our expectations with the more joined up approach opening up a number of business opportunities with brokers.

Focussing on and delivering profit is a consistent year in and year out objective for this business. I am pleased that we have achieved this in the first half of the year during a period of considerable change. There is still plenty of work to do but I am confident that we have the clarity of focus, the structure and the people in place to make 2016 a successful year for the business.

Jon Dye

Chief Executive

ENDS

Media Notes:

1. A media telephone conference call briefing with CEO Jon Dye will take place at 2:30pm on Friday 5 August.
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 2015, over 142,000 employees in more than 70 countries achieved total revenues of approximately 125.2bn euros

3. Media Contact:

   Mark Bishop, Corporate Communications Manager,

   Tel: 01483 552731/Mobile 07802 925053/email: mark.bishop@allianz.co.uk