Allianz Australia has partnered with the Royal Automobile Association of South Australia (RAA) in a deal valued at AUD$642.2 mn. The agreement includes acquiring RAA’s general insurance business and securing a 20-year exclusive distribution arrangement for RAA’s Home and Motor insurance products.
Under the deal, Allianz will underwrite all general insurance products, excluding travel, and handle claims management under the RAA brand. Approximately 270 RAA employees will transition to Allianz’s Adelaide team as part of the acquisition. Allianz, a global insurance leader with over 100 years of Australian operations, will provide expertise to support RAA’s 825,000 members.
Richard Feledy, Managing Director at Allianz, stated: “This partnership with RAA, South Australia’s leading insurer, reflects our shared history of supporting Australians for over a century. The cultural and strategic alignment between our organizations further strengthens this partnership.
We are committed to delivering exceptional value and care to our customers and members. RAA’s growth strategy, business quality, and the stable South Australian insurance market strongly attracted us to this collaboration
Richard Feledy, Managing Director at Allianz
RAA CEO Nick Reade added: “We are confident Allianz’s global scale and expertise will bring significant benefits to our 825,000 members. This partnership aligns with our vision for growth and continued member support.”
Both companies will engage with stakeholders and pursue necessary regulatory approvals. The transaction is expected to close by mid-2025, pending conditions and approvals.
The Australian Prudential Regulation Authority (APRA) has released its quarterly general and life insurance performance statistics. The Quarterly Insurance Performance Statistics publication provides aggregate summaries of financial performance, financial position, capital adequacy and key ratios for the insurance industry.
The industry reported a net profit after tax of $4.6 bn and a return on net assets of 14% for year ending June 2024. This was mostly driven by the sharp recovery of investment returns.
The publication also includes detailed statistics at a class-of-business level, a breakdown of operating income and expenses, and more granular solvency information.
- The industry reported a small decline in the underwriting result to $5.7 bn for the year. However, results remain relatively strong due to increasing premiums in response to higher recent claims costs.
- Overall, gross incurred claims remained relatively high in the year. The slight year-on-year movement was driven by large reductions in both Householders and Fire/ISR as claims stabilised after high expenses from the 2022 south-east QLD/NSW flooding event.
- Net incurred claims increased substantially in the year (16.1%), which was largely due to a reduction in reinsurance revenue across almost all lines of business.
- The industry reported a recovery of investment returns, reaching $3 bn overall. This was mostly driven by unrealised gains from interest-earning investments for year.
- The aggregate industry prescribed capital amount (PCA) coverage ratio increased to 1.74x.
