Allianz Australia’s first-quarter profit fell 7% but it achieved underlying growth thanks to slight premium rises and a favourable claims environment.

Operating profit dropped to $77 million and the combined operating ratio deteriorated to 99.7% from 99.5%, but gross written premium increased 0.8% to $877 million.

“In light of general economic growth being below trend and new car sales falling back from recent peaks, to get underlying growth of 5.2% is very pleasing,” GM Corporate Affairs Nicholas Scofield told insuranceNEWS.com.au.

Growth was in line with expectations thanks to a favourable underlying claims experience, especially in the domestic motor portfolio, and the absence of significant weather events.

It was mainly driven by an increase in policy numbers, including some premium growth, Mr Scofield says.

The underlying growth figure takes account of the Victorian fire service levy’s abolition last July and the run-off of non-profitable portfolios.

Global parent Allianz says net profit fell 3.96% to €1.64 billion ($2.39 billion) in the first quarter, but revenue set a quarterly record.

In property and casualty (P&C) the combined operating ratio improved to 92.6% from 94.3%, according to full results released last week.

CFO Dieter Wemmer says the segment contributed more than half of Allianz Group’s total operating profit, driven by a stronger underwriting result amid lower natural catastrophe claims.

P&C gross written premium was steady, rising 0.1% to €15.22 billion ($22.25 billion).

“In the first three months Allianz achieved results comparable to last year’s highs,” Mr Wemmer said. “This is an encouraging start for the year.”

Allianz is on track for a full-year operating profit of about €10 billion ($14.62 billion).

First-quarter revenue grew 6% to €33.96 billion ($49.66 billion), while operating profit fell 2.6% to €2.72 billion ($3.97 billion).

The life and health insurance new business margin moved to 2.5% from 1.8%.

Premium life growth came from all core markets. Allianz Life in the US recorded a 63.6% increase in premium to €2.56 billion ($3.74 billion).