Hobbs reveals Allianz’s £35m debut at Lloyd’s

Nick Hobbs

Lloyd’s box added 4,000 new customers to the insurer in its first year of trading.

Allianz achieved £35m in gross written premium (GWP) and 4,000 new customers in its first year at Lloyd’s, Insurance Age can exclusively reveal.

Nick Hobbs, director of broker markets at Allianz, discussed with Insurance Age how the insurer has fared at Lloyd’s since it announced its entry to the market in August 2018, following its tie-up with personal lines insurer LV.

“In terms of revenue written, profit performance and feedback from our broker partners, this has all been positive, which I believe is a good measure of success so far,” he summarised.

Beginnings
Allianz entered Lloyd’s by taking over an underwriting box from LV on the fourth floor.

This decision followed the announcement of a joint venture between Allianz and LV in August 2017. Allianz has since fully bought out the fellow insurer’s general insurance business.

Hobbs said that Allianz began trading at Lloyd’s on the scheduled date of 1 October 2018 and that there was “no disruption at all” in rebranding the underwriting box.

“We had no presence at Lloyd’s before so we inevitably expected to face some challenges. However, this really wasn’t the case,” commented Hobbs. “The experience so far has been good. Teething issues, on what is essentially occupying real estate in the Lloyd’s building, were resolved quickly.”

Allianz currently employs four core underwriters at the box, with an additional 11 staff in London allocated to the market. These teams are also supported by a digital proposition service group in Maidstone.

Business
As part of its announcement regarding Lloyd’s, Allianz promised its broker partners that it would “provide terms on close to 100% of the book that was migrating from LV”.

Allianz has also followed LV’s lead at the market by only writing fleet business, with Hobbs describing the £35m figure as containing a “good balance” across self-drive hire, private hire and haulage.

According to Hobbs, the strength of these first-year results means Allianz’s venture at Lloyd’s is already paying for itself.

“We have already reached the required critical mass needed to support the additional expense of our Specialist London Motor operation,” said Hobbs. “Our focus will be very much on profitable trading, growing in the segments that make a return, providing opportunity and perhaps contracting where sustainable value is clearly not possible.”

This cautious approach to the London market has been evidenced by the Allianz box “walking away from business” where sustainability of price has been called into question.

Future
Looking further ahead, Hobbs said similar “careful consideration” would need to be given to Allianz writing other lines of business at Lloyd’s.

He continued: “As we’ve only been trading for a year, our priority is to look at how we can continue to be successful (and improving) in the current space to better serve our broker partners”.

However, with Allianz “having learned a great deal about this previously unknown route to market,” Hobbs did not rule out an expansion of the insurer’s underwriting box in the future.

“We are committed to continue exploring new products, segments and channels,” he concluded. “We’d be daft to not do so.”

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