Commenting on the figures, Colm Holmes, CEO Allianz Holdings, said:

“I’m pleased with Allianz’s performance. We’ve seen strong trading in the first half of the year, although this was impacted by motor claims returning towards pre-pandemic levels, the February storm events and increasing inflationary pressures.

“As we enter the second half of the year, we’re doing the right things to navigate market challenges and we remain in very good shape with a strong set of results behind us. The scale and diversity of our business means we’re well positioned for profitable growth. With a continued focus on profitably, expense management and a clear risk appetite, I’m confident in Allianz’s ability to steer our way through these turbulent conditions.”

Allianz Holdings delivered good levels of growth across the business with a 5% increase in revenue to £1,957m (HY2021: £1,863m). Operating profit fell by 42% to £99m (HY2021: £170m) and the Combined Operating Ratio (COR) deteriorated to 97.2% (HY2021: 91.7%). A key driver behind the fall in profitability was the continued increase in motor claims frequency as drivers returned to the road after lockdown. The result was also impacted  by the cost of the severe February storms which amounted to £50.1m across Allianz Commercial and Allianz Personal.  All parts of the business are also seeing the unexpectedly high rate of inflation, which is running ahead of our predictions and pricing assumptions at the beginning of the year, hit Allianz’s profits.

Allianz Personal achieved an increase in revenue with GWP at £1,263m, up 3% compared to HY 2021, with direct own brand in-force policies also growing 3%. This was due to a particularly strong performance from Petplan, which saw greater focus and alignment by moving into the Allianz Personal family of brands, and the successful launch of Flow, LV=’s digital only motor proposition. 

The LV= Retail business also saw good growth and retention following the implementation of the FCA General Insurance Pricing Practices, which has led to a reduction in people shopping around and a significant number of customers renewing. Growth, however, was offset by lower new business volumes in the home market.  

Overall, the Allianz Personal business is seeing the benefits of its multi-distribution and multi-brand approach, combined with improved pricing capability.

Allianz Commercial delivered growth of 10% year-on-year and a GWP of £694m, driven by a strong underwriting performance and the success of its new regional structure which brought together the Commercial Broker Markets and the Engineering, Construction & Power (ECP) businesses.

Commercial Property performed particularly well, achieving good levels of profit and growth as the benefits of previous remediation work on the portfolio came to fruition. The Engineering business continued to grow and deliver strong results, while Allianz is also starting to see the benefits of its investment in SME digital transformation. Commercial new business was ahead of plan as a result of good targeting, clarity of risk appetite and the mobilisation of trading teams.

As part of its commitment to shape a more sustainable future, this year Allianz became the first insurance partner of Solar Energy UK in order to support its solar power insurance customers. The organisation also announced that 100% of the electricity its UK offices uses now comes from renewable sources.  It has also continued to successfully roll out the Allianz Net Zero Accelerator, assisting brokers in measuring and reducing their carbon footprint, helping them on their journey to net zero. 

Two new Green Heart Standard schemes were launched to make the supply chain more sustainable and Synetiq was appointed as the new salvage supplier, with the aim of increasing the number of green parts used to repair vehicles. 47% of LV= customer repairs are also now being done by carbon neutral bodyshops. 

Allianz employees have reached the impressive milestone of raising over £1m for Mind, its charity partner for the past three years, while LV= General Insurance continued its charity partnership with Family Action – now in its second year - and launched a new  initiative with its repair garages to provide men with support for mental health. The Allianz Sports Fund has continued to support the local communities of brokers with donations made to more than 122 sports clubs. As part of LV= GI’s ongoing partnership with the England and Wales Cricket Board, the grassroots initiative #Funds4Runs will be supporting the development of 4,000 coaches which will have an impact on 20,000 players from all levels of the game each year.

Colm Holmes concluded:

“The UK undoubtedly faces tough economic conditions as the rate of inflation continues to pose a significant challenge. Insurance premiums have to be in line with claims costs and sums insured and we will continue to develop our pricing models to reflect this, to maintain our margins whilst offering competitive solutions for our customers.

“We have exciting plans in place to drive the development of innovative products and services and there are also some excellent opportunities to grow existing propositions. Through continued investment in digitalisation, simplifying our business and a focus on customer centricity, we’re in a fantastic position to support our people, customers and communities.”