"ALLIANZ improved its performance in the quarter despite punishingly low interest rates and the currency costs from Brexit," said Dieter WEMMER, chief financial officer of Allianz SE.
Net income attributable to shareholders climbed 36.5% in the quarter to EUR 1.9 billion due partly to better performance across its business segments. Property and Casualty insurance saw robust internal revenue growth of 3.1% when adjusted for currency and consolidation effects.
"Efforts to develop our business in a very difficult environment are paying off," said WEMMER. "We're seeing sustainable profitable growth in many businesses. Improvements from our Renewal Agenda are bearing fruit and keeping us on track to reach our operating profit target for the full year of EUR 10.5 billion, give or take EUR 500 million."
Key performance indicators also improved in the quarter, with the combined ratio strengthening to 93.5% from 94.1% one year ago and the cost-income ratio in asset management improving to 60.8% from 63.3%. In the life segment, the new business margin weakened by 0.3%age points to 2.8% on the year but improved from the second quarter by nearly the same amount despite a decline in market rates.
9M 2016 overview
Total revenues decreased by 3.2% to EUR 92.4 billion for the first nine months of 2016. Operating profit eased 1.7% to EUR 8.0 billion, driven by the Property and Casualty segment, and, to a lesser extent, Asset Management. The Life and Health segment, however, posted an increase in operating profit. The non-operating result was impacted by a lower investment result and the classification of the South Korean business as held for sale. Overall, net income attributable to shareholders was EUR 5.1 billion, down 1.1% from the first nine months of 2015.
P&C 9M 2016 overview
In the first nine months of 2016, gross premiums written held mostly steady at 40.4 EUR (40.7) billion. Adjusted for foreign exchange and consolidation effects, internal growth remained strong at 3.1%, mostly due to positive developments in Turkey, Germany and Argentina driving the increase. Operating profit fell 9.9% to EUR 3.9 billion compared to the first nine months of 2015, partly due to high claims from natural catastrophes in the second quarter and lower investment income. In addition, the year-ago period was supported by the net gain from the sale of the Fireman's Fund personal insurance business. The combined ratio was 94.4 (94.1)%.
L&H 9M 2016 overview
In Life and Health insurance, operating profit for the first nine months of 2016 increased by 13.8% to EUR 3.1 billion. Statutory premiums decreased by 4.7% to EUR 47.5 billion. The targeted shift toward capital-efficient products lifted the new business margin to 2.6 (1.9)%. As a result, the value of new business (VNB) increased by 29.2% to EUR 1.0 billion compared to the first nine months of 2015.
The full press release is available here.
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