In the first three quarters, the insurer achieved an operating profit of 9.9 billion euros – 27 percent more than in the previous year.
(Photo: dpa)
Munich Allianz achieved a strong result in the turbulent third quarter for the group. In the months from July to September, Europe’s largest insurer achieved an operating profit of 3.2 billion euros. The group announced on Wednesday morning. The expectations of the analysts of an average of 3.05 billion euros were thus exceeded.
After nine months in this financial year, the group comes to 9.9 billion euros, an increase of 27 percent compared to the same period in the previous year. “That was our strongest third quarter ever,” said Allianz boss Oliver Bäte. For the year as a whole, the upper end of the forecast of twelve billion euros, plus or minus one billion euros, is to be reached.
The 13 billion euros indicated would be a record result for Allianz after the 11.9 billion euros in 2019. The numbers were well received on the stock market: the share gained around one percent before the stock market.
Asset management, which has been so controversial in recent months, has developed surprisingly well. The smallest of the three business areas was largely unimpressed by the many negative headlines about problems with so-called structured alpha funds in the USA. In total, the subsidiaries Pimco and AGI contributed EUR 862 million to total profits in the third quarter, an increase of more than 30 percent compared to the same period of the previous year. Analysts had assumed an average of 796 million euros.
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Especially in times of crisis, the products of the Allianz subsidiaries were in demand with investors. The total stock of assets under management is now at a record level of 2.548 trillion euros, of which 1.881 trillion euros are managed for customers. The rest are Allianz’s own investments.
Observers had expected that customers would withdraw money due to the unrest surrounding the subsidiary AGI. The opposite happened. The portfolio of assets under management rose by EUR 51 billion between July and September.
Nothing new on US problems
On the other hand, the group continues to be tight-lipped in the allegations surrounding the highly speculative structured alpha funds of the subsidiary Allianz Global Investor (AGI), which caused the share price to crash at the beginning of August. The negotiators on both sides are still negotiating.
The AGI funds brought institutional investors huge losses at the beginning of the corona crisis. Some of them had to be liquidated. Several proceedings are pending before US courts, in addition to the Securities and Exchange Commission, the US Department of Justice is also investigating the incidents. In total, the alliance could face a maximum burden of up to six billion euros.
The aim of the group is that the claims payments are significantly lower. As early as August it became known that the DAX company prefers complex negotiations with well-known law firms to a quick solution with investors. Because the US judiciary has imposed strict secrecy on both parties vis-à-vis the public, hardly any details have been leaked in the past few months.
Property and casualty insurance stronger than expected
At least it can now be said that the negotiating partners are a long way from assessing the damage at the current time. The international accounting standard IFRS provides clear rules for this: If the probability of occurrence is more than 50 percent, a provision must be made. Since this has not yet happened, it can be inferred that negotiations are currently still below this threshold.
They much prefer to talk about current business at Allianz anyway. After a strong first half of the year, this also went very well in the months from July to September. Even if the claims payments for the flood disaster in July in parts of Germany and neighboring countries were 400 million euros, as was already known a few weeks ago. The property and casualty insurance segment nevertheless earned 1.3 billion euros during this period and was thus on a par with the previous year. The analysts’ estimates of 1.25 billion euros on average were even slightly exceeded.
The daughters in particular, who recorded significant losses last year due to the effects of the corona crisis, are showing that they have recovered. Allianz Partners, through which, for example, travel insurance is offered, initiated the turnaround, as did the credit insurer Euler Hermes and the long-loss industrial insurer AGCS.
Life insurance is in great demand
The life and health insurance business came as a surprise again. Here the group achieved an operating profit of 1.3 billion euros in the third quarter, after 1.1 billion euros in the same period of the previous year. Analysts had predicted an average of 1.19 billion euros here.
The jump in earnings becomes even clearer when looking at the first three quarters. There was an increase to 3.7 billion euros after 2.9 billion euros in the same period of the previous year. Business was particularly good in the home market of Germany, but also in France, Italy and the USA. There were also improved margins on investments and higher fees.
In addition to the alliance, the competition has largely made up for the strains of the pandemic in recent months. The world’s largest insurer Axa reported last week for the first nine months of an increase in premium income by seven percent in the first nine months to 76 billion euros. During this period, Allianz achieved a 6.3 percent increase in sales to 110 billion euros.
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