Allianz Group is likely to back further acquisitions by its U.K. business given suitable deal terms, according to the group's U.K. CEO, Jon Dye.

"If we could find the right target at the right price, I would expect to be supported by the shareholder," Dye said in an interview May 15 with S&P Global Market Intelligence at the British Insurance Brokers' Association conference. He also noted that Allianz Group CEO Oliver Bäte "has made no secret of the fact that he is acquisitive."

But Dye added that finding a suitable acquisition would not be easy, noting that Allianz's acquisition of a stake in fellow insurer Liverpool Victoria Friendly Society Ltd.'s nonlife business "is the biggest deal Allianz has done in a little while."

He added: "That tells you how difficult it is to find the right deal at the right price."

Dye's comments came amid news reports that Allianz is in talks to buy the home insurance business of U.K. insurer Legal & General Group PLC. Dye declined to comment on the reports.

Speaking to journalists about Allianz's group first-quarter earnings a day earlier, group CFO Giulio Terzariol also indicated that Allianz would look at further U.K. acquisitions.

'Big investment'

Allianz bought an initial 49% stake in LV='s nonlife business in August 2017 for £500 million, and will raise that stake to 69.9% during 2019 for a further £213 million. The deal values the entirety of LV='s nonlife business at £1.02 billion.

Under the deal, Allianz is transferring its existing U.K. home and motor business to the LV= nonlife unit, which is being run as a personal lines joint venture between the two firms, and LV= is transferring its U.K. commercial business to Allianz. Dye said the home and motor transfer to LV= would conclude "in about three weeks" and the transfer of commercial business to Allianz would be complete "in about four months' time."

Dye estimated that the combined premium of the consolidated Allianz U.K. and LV= nonlife businesses would make it the second-biggest U.K. nonlife insurer — "a big hop from where we currently are." According to S&P Global Market Intelligence data, Allianz was the fifth-largest U.K. nonlife insurer by net written premium in 2017, and LV= the ninth-largest.

Dye said: "That is a substantial strategic move — a big investment in the company and Allianz's position in the U.K. market."

The group's continued interest in the U.K. market, despite heavy competition and potential difficulties posed by Brexit, is driven simply by the size of the U.K. insurance market, Dye said. According to Swiss Re, the U.K. is the second-biggest nonlife insurance market in Europe and the fifth-largest in the world measured by 2017 premium volume.

"Allianz is interested in taking substantial positions in the big markets in the world. The U.K. is one of those," Dye said.

He also noted that Allianz "takes a long view" and that the group would look at Brexit as "a short-term local issue... that they would imagine we will be able to trade through." He pointed out that the group signed the LV= deal after the results of the referendum triggering the U.K.'s exit from the EU were known.

While indicating that more acquisitions are possible, Dye said that with the addition of the LV= business to Allianz's existing U.K. portfolio, which includes commercial and pet insurance, the company had "a nice set of cards in our hand."

He added: "We don't need to do a whole bunch of whizzy new stuff. What we need to do is take those businesses and make them work."