Allianz Cornhill, the UK insurance subsidiary of the global insurer Allianz, has reported strong growth in profits thanks to reduced claims due to a stable liabilities environment and the reduction of significant losses.

Allianz Cornhill, which was acquired by Allianz in 2003, achieved a 37% increase in operating profit before tax for 2004 to GBP218.4 million on the back of the favorable insurance environment.

However, profits growth was not significantly improved through organic growth of premiums written, as premium income only increase by 1.5% for the year, up from GBP1,742.6 million to GBP1,767.9 million. The company’s combined ratio did improve from 96.9% to 94%, however.

CEO Andrew Torrance commented: 2004 was a year of substantial achievement and all the divisions made a strong contribution to our record results. In addition to the lack of major losses and benign weather conditions that general insurers need to post excellent results, a number of home grown factors served us well in 2004. For example, the emphasis we place on developing our technical, commercial and leadership skills.

As a result of the steps we have taken in recent times, I believe Allianz Cornhill is in a strong position at this point in the insurance cycle. We will continue with our strategy of applying strict underwriting disciplines across all areas of our business. We will continue to contract in areas of business where we cannot achieve acceptable returns and look to expand in areas where the returns are attractive.

Looking ahead to 2005, Cornhill’s centenary year, Torrance said that the company would continue to produce ‘attractive’ returns. The chief executive added that the company and the industry as a whole needed to do more to regain customer confidence.