Dye criticises "craziness" of private motor rates

Allianz chief executive officer Jon Dye cited the “craziness” of the private motor market as he criticised the level rates had dropped this year.

It came as the insurer posted an operating profit increase of 12% and an overall combined operating ratio of 95.7% for the first three quarters this year.

Although assessing that the provider’s results were a “good story in what remains a difficult market”, Dye warned: “Private car has got too cheap too quickly, we are prepared to let the volume go.

“We are not going to chase the market down when it looks to be overly-aggressive cuts."

He continued: “I don’t know who is out there indulging in the craziness, somebody is doing it but it ain’t us.

“I imagine some sanity will return, whether now or at the year end, we will have to wait and see.”

Decent broker returns
This time last year, Allianz’s volume of retail broker business stood at £228.5m.

Despite being slightly down at £226.3m for the same point in 2013, Dye maintained that “we are making very decent returns from brokers” and has pin-pointed hitting £300m by the end of the year.

Running the rule over the provider’s commercial performance, Dye revealed that the insurer had on average raised rates by five and a half points, a figure he described as merely “adequate.”

He said there had been signs that commercial rates across the market place had begun to “plateau”, a trend he described as “a little bit of a concern”.

Dye highlighted that the “appetite” for commercial rate rises had weakened although 10-point rate rises are required.

“I suspect it will be people looking at their overall portfolio and saying it looks ok,” he assessed.

“There have been strong results on the property side and that would be the only logical reason, if you can call it logical.

"It’s difficult to understand how businesses would want to continue to trade their commercial portfolio north of 100 but one would conclude some people are prepared to do that.”

Paradigm shift
Meanwhile, despite experiencing what he described as a “paradigm shift” following the Laspo and Jackson reforms, Dye hailed the performance of Allianz Legal Protection.

"We have certainly managed to trade through the Laspo changes and have seen some evidence that as the world has been dropped on its head lawyers have come to talk to us in a sign of flight to quality,” he stated.

“It’s natural that people want to talk to a player with the technical skills that we have.”

And following the St Jude storm which struck the UK a fortnight ago, Dye estimates that the claims bill will come in at £3m.

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