Allianz has paid £80m in business interruption claims caused by Covid-19, but the High Court verdict in September could mean the full-year figure is higher
The UK operation of Allianz has paid out a total of £80m ($105m) in business interruption claims to firms materially impacted by Covid-19.
The total was split across 950 companies, and £66m ($86.7m) of it was paid out by the German giant’s reinsurance partners, leaving it with a £14m hit to its balance sheet.
According to its interim financial report, total gross written premium (GWP) nearly doubled this year, rising from £1bn ($1.31bn) at the half-year point in 2019 to £1.98bn ($2.6bn) in the first six months of 2020.
John Dye, CEO of Allianz Holdings – the firm controlling Allianz insurance plc and the recently-acquired LV=GI – said: “This set of results is broadly in line with our expectations and has been achieved against the backdrop of an unprecedented human, economic and social crisis.
“Allianz is growing in a way which is making our business more resilient and better prepared to meet the challenges within the market and the wider economy.”
In its report, the insurer noted that the ultimate cost of Covid-19 business interruption claims on its balance sheet will be tied to the outcome of the FCA High Court test case.
Allianz is one of many insurers being scrutinised for their rejection of certain business interruption claims, and on the conclusion of the eight-day hearing, the two presiding judges said they aim to deliver a verdict by late September.
Breaking down the figures
Alongside a bump in GWP, Allianz Holdings recorded an increase in operating profit, from £86m ($113m) at the half-year point of 2019 to £179m ($235m) for the same period in 2020.
The insurer attributed its growth in GWP to the acquisition of the entire LV=GI business.
The deal was completed on January 2 this year and made Allianz the second-largest UK insurance company behind Aviva.
Breaking the figures down further revealed that LV=GI had its own GWP and operating profit boosted by its incorporation of L&G General Insurance – formerly the general coverage arm of Legal and General – a deal it completed in January this year.
In its half-year figures, the newly-incorporated insurer recorded just over £1bn in GWP, a 31% boost to the £775m ($1bn) at half-year 2019, and an operating profit of £106m ($140m), compared to £34m ($44.7) totalled in the first six months of last year.
LV=GI CEO Steve Treloar said: “In the first half of the year, LV=GI achieved strong growth through the acquisition of the general insurance business of L&G.
“We have firm foundations as a business with great products and excellent service, and we continue to look at ways in which we can adapt our products to ensure we’re meeting the needs of all customers.
In its report, Allianz Holdings also noted paying out £10m in travel insurance claims to date, but did not indicate the total figure gross of reinsurance.