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Allianz cut to NZ capacity ‘disappointing’

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Allianz’s decision to axe three major commercial insurance lines from its New Zealand operations has been labelled “disappointing”.

The insurer will exit property, commercial motor and fleet, and public and product liability – all previously underwritten and distributed by the Allianz Broker & Agency division.

Allianz Broker & Agency has a small market share, believed to be less than 1% and worth about $NZ40 million ($37.85 million) in premium.

But Insurance Council of New Zealand CEO Tim Grafton told any withdrawal is unfortunate.

“$NZ40 million out of a market of $NZ6.5 billion ($6.12 billion) is relatively small, but we don’t want to see any insurer reducing cover in New Zealand,” he said. “Allianz is a good, strong company and we like to have such companies operating in New Zealand.”

Insurance Brokers Association of New Zealand CEO Gary Young says the backdrop of insurers’ falling risk appetite in some parts of the country is important.

“[Allianz] may not be a big player in the New Zealand market, but loss of capacity is not a good thing, given the small number of players here,” he said.

Allianz says new business in the affected lines will no longer be accepted, while renewals will be offered until July 12.

It says it is not leaving the New Zealand market altogether, with the affected broker and agency business outweighed by “a range of commercial and corporate insurance products” that remain.

Divisions that will continue to operate in New Zealand are Allianz Global Corporate & Specialty, Euler Hermes, Allianz Partners, Club Marine, Hunter Premium Funding, Allianz Marine & Transit, and Primacy.

“After much consideration, and following a review of the strategic opportunities available to our business in New Zealand, the decision has been made for Allianz to exit the three lines of business,” a spokesman said. “We will continue to support our customers through our underwriting and claims teams based in New Zealand.”