Profits at insurer Allianz plummeted 72 per cent last year as Covid-19 public health restrictions gave rise to business interruption costs. Its latest accounts show the firm paid out Covid-related motor refunds of €9 million as pandemic travel restrictions meant reduced travel and fewer claims on policies.
Allianz is one of Ireland’s largest multi-line general insurance companies with an annual turnover in excess of €450 million and more than half a million Irish customers. It provides a range of insurance products including car, home, pet, boat and renters’ insurance.
Its accounts for the year ended December 31st, 2020, show profits for the financial year amounted to €12.3 million, which was down from €43.8 million in 2019.
Total comprehensive income for the year was €38.2 million, which was down from €80.5 million. No dividend was paid for the year, as against €60 million which was paid out in 2019. Shareholder funds of €449.8 million were €38.2 million above the 2019 level.
Solvency position ‘remains strong’
Allianz said its capital and solvency position “remains strong” with the latter continuing to be supported by a quota share reinsurance arrangement. However, the company said it was negatively impacted by the Covid-19 pandemic despite taking steps to mitigate risks.
“Trading in 2020 was affected by the Covid-19 restrictions which gave rise to business interruption costs that were partially offset by lower motor claims,” it said.
“The underlying underwriting trading performance when Covid-19 is excluded was strong, driven by benign weather in the period and positive prior year development.
“Top-line performance in 2020 was better than 2019 as policy volumes grew, while we maintained our strong underwriting discipline.
“Top-line growth was after allowing for Covid-related motor refunds of €9 million and non-motor refunds, mainly to commercial customers with liability covers, of €8 million.”
Allianz said the prevailing low-yield investment environment “continues to put pressure on investment income levels”.
In a note accompanying the accounts, the company said it sold its publicly traded equity portfolio during 2020 to “protect the investment portfolio against potential further equity market downturns in light of the Covid-19 pandemic”.
Allianz said the Covid-19 pandemic “continues to affect all aspects of our personal and professional lives, the health of the world’s population, global economic performance and the financial markets”.
It continued: “Despite these uncertainties Allianz is very well prepared having a strong capital base and a home-working enabled workforce. Allianz has ensured its employees are safe and their customers will continue to be served.
“We will continue to work with our customers and brokers to offer them the support they need.”
The insurer said it set up a Covid-19 taskforce in 2020 chaired by the chief operating officer and comprised of representatives of underwriting claims, finance, actuarial and risk management, to provide a “joint-expert assessment” of Covid-19 liabilities.
Its portfolio asset allocations remained broadly unchanged from 2019 with the reduction in equity exposure being the main change.
“We continue to take a long-term investment perspective and our careful attention to risk has been valuable in navigating the uncertain environment,” it said. “At the year-end we held 92 per cent of our investments in fixed-income assets.”
The insurer employed an average of 684 people during the year, which was up from 678 the year before.
