Axa raised personal lines pricing in the UK and Ireland by 51.7% in Q1 to try to improve the performance of its motor insurance book, notes BI, while the quarter also saw Allianz increase UK pricing by 35.3%.
Charles Graham, BI Senior Insurance Industry Analyst, said: “Personal-lines pricing is rising faster than commercial lines, based on Axa figures, as insurers play catch up with the cumulative effects of inflation. Yet Europe-wide price increases have diverged. Allianz raised rates in the UK by 18.4% through 2023 before boosting Q1 pricing by 35.3%. Axa's UK and Ireland prices jumped 31.5% for retail lines in 2023, then it pushed them up a whopping 51.7% in 1Q. The magnitude of such rate increases dwarfs the rises in Germany, France, Italy and Spain.”
Price Hikes Have Helped Keep Allianz UK Business Profitable
Allianz's 35.3% Q1 UK price jump -- building on an average 18.4% price gain through 2023 – has helped keep its underwriting profitable there, according to BI. Allianz had a 95.5% combined ratio in Q1, higher than Germany (93%) or France (90.3%). Since the beginning of 2022, the combined ratio has averaged 97.4%, with France at 94.8% and Germany 91.9%. It has only exceeded 100% in one quarter.
Yet rate rises in Germany and France have, adds BI, been much lower than the UK despite similar inflationary pressures. German rates increased 6.6% in 2023 and 7.6% in 1Q. Prices in France increased 8.2% in 2023 and 9.6% in 1Q. Allianz doubled the size of its UK business with the acquisition of 100% of Liverpool Victoria (LV=) and L&G's general insurance business in 2020. Through Pet Plan, it's also the country's leading pet insurer.
Charles Graham added: “The challenge for European insurers remains how to keep pricing ahead of inflation. While commercial policies may include automatic indexation on long-term contracts to reflect inflation trends, the treatment of inflation for personal-lines pricing and particularly for motor varies by geographic region and is often dependent on individual insurers adjusting pricing in competitive markets.”
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