Broker branches a key focus for Allianz in 2024, CEO Holmes promises

“We’re looking at jurisdictions where we feel we need to have a stronger local presence.”

He revealed that further announcements would be made in the next few weeks.

“You’ll see us move much more to hubs for back office, but very much local for branch underwriting in the commercial space,” he said. “Because the brokers are telling us that’s what they want.

We react to our people and to our customers. And that will never change as long as I’m with Allianz. We focus on customers and brokers, not on navel-gazing.

“I’ve always been of the view that it’s our job to be where the brokers are and where they need us to be.”

Map

Holmes, pictured, detailed while the square footage of the business has been reduced with offices being consolidated the number of ‘pins in a map’ where brokers can interact with underwriters will grow.

The shift to merge office space in locations has been driven by duplication after the deals for L&G’s general insurance business and LV, and changes in work patterns post the pandemic meaning staff are not in the office five days a week, he said.

He also argued the repurposing of the buildings means better working. He said: “The space now is more suitable to what people come to the office to actually do, which is not to sit at a desk, but it’s much more collaboration space, much more training, much more focus on how they can create strategy.”

Smaller brokers

In February Holmes had promised Allianz would push ahead further with smaller brokers this year growing in the SME space.

In his view it has been a successful initiative.

“We have been targeting the smaller broker community and how we can support them, and we’re investing incredibly heavily in our digital capability in that space,” he said.

A priority has been broadening the customer solutions on offer. He said: “It is about more brokers that we’re doing business with. It is about building stronger ties in the community.”

He added: “You should expect to see us grow in the regions, because I still strongly believe in that local relationship being really important in that SME space.

“You will still see us investing in that space, I’m not a fan of the central hub for underwriting SME. I think you’ve got to be close to the customers and closer to the brokers.”

Results

The update came as Allianz UK boosted gross written premiums by 5.5% in the first half of the year to £2.21bn with operating profit jumping by £62m to £174.8m.

The combined operating ratio improved to 94.6% from 96.6% in the same period of 2023.

“The improvement is predominantly across personal lines,” Holmes said.

“Personal lines was much more impacted by the inflationary problems, the frequency rebound off the back of Covid in 2022 and 2023.

“The vast bulk of the improvement in COR and profitability is driven by our personal lines business getting back to where it should. There is still more to come but it’s had a fantastic 12 months on the back of a very disappointing two years for the industry and for us as well.”

Policies

Personal lines GWP was up 3.3% to £1.07bn. Holmes acknowledged there had been a reduction in policies but stressed retention had been strong while new business conversion came down.

“We haven’t been chasing volume,” he said, pointing out this included home business. Six months ago he assessed that there was still “road to run” for the sector on rate hardening. Recent figures from Consumer Intelligence for the year to April put the year-on-year increase in rates at 41.6%.

“We are expecting, as we get into the second half of 24, particularly into 25, that you will start seeing growth in policies, but we will protect the margin through that, especially where we see volatility taking place in the numbers,” Holmes said. “We’re not a company that will chase premium for the sake of chasing it.”

Commercial growth

Allianz UK’s half-year results showed commercial lines GWP ticked up 5.9% to £770.9m.

Holmes explained there were differing performances by line of business.

In commercial motor volumes came down. “I don’t think that market is as hard as it needs to be and so we’re still applying rate in that segment,” he said underlining it was “incredibly disciplined” on renewals and new business.

“We’re continuing to grow strongly in the targeted segments for us, which were property and liability.”

Riots

As reported by sister title Insurance Post, insurers are likely to have to pay out at least £20m for the damage caused by the far-right anarchy across the UK in recent days.

Holmes calculated that while Allianz had seen a handful of notifications on claims it was not currently a material number.

“The key thing for us is protecting our people first and foremost,” he said.

“We’re working very closely with each office in terms of keeping people safe, and that’s our priority.”

Strategy

Looking ahead at the next six months he summed up the business strategy for Allianz would not change. It will combine investing in technology, data and analytics with spending on ‘front of house’ and new products to be easy for brokers to work with.

“Expect to see us continue to grow into targeted areas of property, liability and casualty,” he said.

But reiterated that with early signs of softening in commercial property rates it will “walk back” if the margins are not there. He said: “You’ll continue to see us being incredibly disciplined around what we’re doing.”

Brand

The insurer announced this week that Twickenham will become Allianz Stadium from September as part of a deal with the Rugby Football Union that sees the provider make an unspecified “long-term investment” in the sport.

Continuing to invest “heavily in the brand of Allianz in the UK” is also part of the equation, Holmes said.

He said: “We react to our people and to our customers. And that will never change as long as I’m with Allianz.

“We focus on customers and brokers, not on navel-gazing at ourselves.”

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