In light of the uncertainties for the macroeconomic development caused by the current pandemic and the now available updated financial plans of the operating entities of the Group, as already announced in the media release from April 30, 2020 the Board of Management does not assume that Allianz Group can achieve the target range for the operating profit for 2020 in the amount of EUR 12 billion, plus or minus EUR 500 million. A new profit target for 2020 will be announced by the Board of Management upon completion of the revised planning once the impact of the Corona crisis can be better assessed.
- Total revenues: EUR 42.6 billion (+5.7%), of which:
- Property-Casualty: EUR 20.3 billion (+4.2%)
- Life/Health: EUR 20.5 billion (+6.5%)
- Asset Management: EUR 1.8 billion (+12.5%)
- Operating profit / loss: EUR 2,304 million (-22.2%)
- Group RoE: 9.3% (-4.3 pp.)
- P&C combined ratio: 97.8% (+4.1 pp.)
- L&H NBM: 2.7% (-0.7 pp.)
- L&H VNB: EUR 494 million (-18.9%)
- AuM CIR: 61.7% (-2.0 pp.)
- Solvency II ratio: 190% (-23 pp.)
- Net income: EUR 1,483 million (-27.7%)
Internal revenue growth, which adjusts for currency and consolidation effects, amounted to 3.7 percent, driven in particular by Life/Health business segment but also supported by other business segments. Total revenues increased 5.7% to EUR 42.6 billion (1Q2019: 40.3).
Basic Earnings per Share (EPS) decreased 27.8% to EUR 3.36 (1Q2019: 4.65). Annualized Return on Equity (RoE) amounted to 9.3% (FY2019: 13.6%).
The Solvency II capitalization ratio was at 190% at the end of the first quarter of 2020, compared to 212% at year-end 2019.
Total revenues rose by 4.2% to EUR 20.3 billion (1Q2019: 19.5) in the first quarter of 2020. Adjusted for foreign currency translation and consolidation effects, internal growth totaled 1.8%, driven by a positive price effect of 3.3% and a negative volume effect of 1.4%. AGCS, Allianz Asia Pacific, and Allianz Turkey were the main growth drivers.
Operating profit decreased strongly by 29.1% to EUR 1.0 billion in the first quarter of 2020 compared to the year-earlier period. The underwriting result was pressured by an increase in losses from natural catastrophes and COVID-19 impacts. Higher claims were partly offset by a strong improvement of our expense ratio.
The combined ratio rose 4.1 percentage points to 97.8% in the first quarter of 2020 compared to the year-earlier period.
PVNBP, the present value of new business premiums, increased to EUR 18.0 billion (1Q2019: 17.6) in the first quarter of 2020. This was largely driven by higher sales of unit-linked products in Italy, as well as of capital-efficient products in the German life business. Weakened sales of savings products in France partly offset this development.
The new business margin (NBM) decreased to 2.7% (1Q2019: 3.5) due to the impact of lower interest rates in the first quarter of 2020. The value of new business (VNB) dropped to EUR 494 million (1Q2019: 609) in the first quarter of 2020. The negative effects from the worsening of the interest rate environment were partly offset by increased sales, improved products and the continued shift to preferred lines of business.
Operating profit decreased to EUR 0.8 billion (1Q2019: 1.1) in the first quarter of 2020. This was mainly due to a lower investment margin, driven predominantly by higher impairments following the market downturn. Further contributing factors were higher hedge costs and increased deferred acquisition costs (DAC) true-up mainly in the United States. The negative effects were partly compensated by an improved technical margin.
Third-party assets under management (AuM) decreased by EUR 129 billion to EUR 1,557 billion in the first quarter of 2020, compared to the end of 2019. This development was driven by negative market effects of EUR 107.6 billion and net outflows of EUR 46.4 billion, mostly in March. Positive foreign currency translation effects of EUR 25.0 billion could not outweigh the aforementioned negative effects.
Total assets under management decreased to EUR 2,134 billion in the first quarter of 2020.
The cost-income ratio (CIR) went down by 2.0 percentage points to 61.7% in the first quarter of 2020 compared to the first quarter of 2019. This was due to higher net fee and commission income, largely driven by higher average AuM, supported by an increase in AuM-driven margins. As a result, operating profit increased by 18.6% to EUR 679 million (1Q2019: 573) in the first quarter of 2020 compared to the year-earlier period.
"The first quarter of 2020 showed the resilience of Allianz in these unprecedented circumstances. I am very proud of the operational preparedness of Allianz, the dedication of our employees and our IT that ensures the highest service levels for our customers even in this challenging situation. These are very testing times for us all, but I believe that together we will rise to this challenge."
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