PROFITS UP 17.5% AND THE PARTNERSHIP WITH LV= IS MAKING GREAT PROGRESS

Chief Executive Officer, Jon Dye said:

“Profits are up 17.5% over 2017 in challenging market conditions and the Combined Operating Ratio is 1.7% better than this time last year. These are very pleasing results. Revenues are broadly flat, which reflects the start of the transfer of Allianz’s personal home and motor business to LV=.

“I am pleased with the way we have maintained our trading focus while at the same time committing considerable resources to the joint venture with LV=. To put this into perspective, communications about the new arrangements have gone out to 1,600 brokers, new relationships have been created between 167 brokers and Allianz and the transfer of personal home and motor business to LV= began on schedule. Some commercial schemes business has already come over from LV= and we will start to issue new commercial lines business invitations from 6 August for former LV= business with effective dates of 20 September onwards. By the end of the transfer process, almost 600,000 policy details will have been exchanged between ourselves and LV=.

“Putting all this together means it has been a great start to the year for the business.”

Commercial:

GWP has increased by 4.9% and the COR stands at a pleasing 94.3% which represents a very good performance in a highly competitive market.

The commercial book has grown organically which reflects the quality and breadth of the products available to brokers. We believe brokers appreciate that Allianz is a trusted safe haven for their customers’ insurance needs and are placing more business with us during these uncertain political and economic times.

The transfer of the commercial lines portfolio from LV= is an exciting prospect. It will increase the size of the book and provide the opportunity to broaden our underwriting footprint and knowledge. For example, new Truck and Taxi products will be launched later this year and a presence in the London Market through a new specialist London motor team offers the possibility of learning from a previously unexplored channel. And we have expanded our distribution potential through the new broker friends mentioned earlier.

The Engineering business is also performing strongly with top line growth at nearly 18.0%

compared to the same point in 2017 and the COR is in a particularly healthy position.Strong progress has been made in Construction following the launch of a new proposition supported by expert teams, leading to a 15% increase in new business volumes.

More broadly,after the Ogden rate was reduced in February 2017 we had a number of challenging but constructiveconversations with brokers about how to cover the rising cost of personal injury claims. The progress of the Civil Liability Bill is encouraging but as the recent government announcement on the delay in implementing the Whiplash reforms element shows, it’s not over until it’s over. Irrespective of the progress on personal injury reform, the overall claims environment is unfavourable for insurers and we do not see that changing markedly anytime soon.

Personal:

As we have prepared for and begun to execute the business transfer as part of the joint venture, the Personal Lines GWP has reduced by 5.0% and this trend will continue. The COR is 2.1% lower than at the same point in 2017 which is a positive outcome.

Petplan continues to deliver a good set of growth and profit numbers. The customer base has grown by 3.0% over the last 12 months and the business currently insures 1.3m pets which shows this market leader continues to offer great appeal to the UK’s pet owners.

Claims

Providing an excellent claims service is a must for an insurer to be successful. This year we have successfully supported customers through the Liverpool car park fire, Storm Emma and the Beast from the East and with business as usual claims.

Independent validation from a respected organisation is a strong indicator of performance which is why the latest Gracechurch Report makes for positive reading. This industry benchmarking study completed by commercial brokers has Allianz ranked first among its peers in net satisfaction scores, with over two thirds of brokers recommending us based on the quality of our claims service.

Recently we announced a record £62.8m in fraud savings during 2017. Catching fraudsters remains a priority for the business and brokers and their customers can be confident that every effort is made to prevent fraudulent claims succeeding.

Brokers tell us that the Allianz’s claims teams have an excellent customer story to tell and we should be more vocal in sharing it. This is good advice which we intend to follow in the coming months.

Jon Dye Concluded:

“I am pleased with the results the business has achieved during the first half of the year. The profit result is strong and good progress is being made on the transfer of business with LV=. The positive feedback from brokers to my colleagues at the branches and at events like the BIBA conference show the challenges of the joint venture are being handled with considerable professionalism by our two organisations.

“Allianz’s recent success at the British Insurance Awards in winning the Commercial Insurer of the Year title; with LV= picking up the Brand Management Award, is a good example of how the strengths of the two organisations complement one another.

“These are exciting times for the business and our journey to becoming a top three general insurer by 2020 is making strong progress.”

Jon Dye, Chief Executive Officer.

Ends.

Notes for the Media:

1. In prior years our Engineering Inspection fee income was included within GWP. This has been reviewed in preparation for the introduction of the new International Accounting Standard for Insurance Policies (IFRS 17) which is effective from 1^st January 2021.
2. The figures in this press release are all stated before the 40% Allianz Group quota share arrangement. The quota share is in place for capital management purposes. The local numbers will vary from those provided by Allianz Group largely because of fluctuations in the Sterling against the Euro exchange rate during the period.
3. Allianz Insurance is one of the largest general insurers in the UK and part of the Allianz Group.The Allianz Group is one of the world's leading insurers and asset managers with more than 88 million retail and corporate customers. Allianz customers benefit from a broad range of personal and corporate insurance services, ranging from property, life and health insurance to assistance services to credit insurance and global business insurance. Allianz is one of the world’s largest asset managers with third party assets of 1,448bn euros. Thanks to our systematic integration of ecological and social criteria in our business processes and investment decisions, we hold a leading position in the Dow Jones Sustainability Index. In 2017, over 140,000 employees in more than 70 countries achieved total revenue of 126 billion euros and an operating profit of more than 11 billion euros for the group. These assessments are, as always, subject to the disclaimer provided below.

   Cautionary note regarding forward-looking statements

   The statements contained herein may include prospects, statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such forward-looking statements. Such deviations may arise due to, without limitation, (i) changes of the general economic conditions and competitive situation, particularly in the Allianz Group's core business and core markets, (ii) performance of financial markets (particularly market volatility, liquidity and credit events), (iii) frequency and severity of insured loss events, including from natural catastrophes and the development of loss expenses, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) particularly in the banking business, the extent of credit defaults, (vii) interest rate levels, (viii) currency exchange rates including the euro/US-dollarexchange rate, (ix) changes in laws and regulations, including tax regulations, (x) the impact of acquisitions, including related integration issues, and reorganization measures, and (xi) general competitive factors, in each case on a local, regional, national and/or global basis. Many of these factors may be more likely to occur, or more pronounced, as a result of terrorist activities and their consequences.

   No duty to update

   The company assumes no obligation to update any information or forward-looking statement contained herein, save for any information required to be disclosed by law.

4. Media Contact:

   Mark Bishop, Corporate Communications Manager.
   
   Contact Telephone Numbers:
   Work - 01483 552731 Mobile - 07802 925053
   Email - mark.bishop@allianz.co.uk