ALLIANZ, FY2020: EUR 1.3 billion impact of Covid-19 on operating profit

22 February 2021 — Andrei Victor
German insurer ALLIANZ posted FY2020 total revenues of EUR 140.5 billion,down by 1.3% y-o-y (EUR 142.4 billion in 2019) while its operating profit decreased by 9.3% to EUR 10.8 billion (vs. EUR 11.9 billion), mostly due to the adverse impacts from COVID-19 amounting to approximately EUR 1.3 billion.

Net income attributable to shareholders decreased 14.0% to EUR 6.8 billion (EUR 7.9 billion a year befor) due to the lower operating profit and non-operating result. The insurer announced the Board of Management will propose a dividend at prior-year level, EUR 9.60 per share for 2020.

"I am grateful for the trust and confidence that our stakeholders placed in ALLIANZ during the challenging year 2020," said Oliver BAETE, Chief Executive Officer of ALLIANZ SE. "Our resilient results prove that we continued to deliver value and security to our customers, thanks to our highly-engaged workforce and state-of-the-art operations. We are hence in a good position to deliver on our 2021 ambition."

Property-Casualty insurance: Operating profit impacted by COVID-19

In non-life business, total revenues rose slightly by 0.4% to EUR 59.4 billion in 2020. Adjusted for foreign currency translation and consolidation effects, internal growth totaled -1.5 percent, mainly driven by a negative volume effect of 4.8% and a positive price effect of 3.8%. The main contributors to this decline were ALLIANZ Partners, EULER HERMES, and Italy, whereas AGCS, Turkey, and Germany recorded positive internal growth.

Operating profit decreased by 13.4% to EUR 4.4 billion in 2020 compared to the previous year. The underwriting result was heavily affected by the COVID-19 pandemic especially in the commercial lines of business, higher claims from natural catastrophes, and a lower contribution from run-off, partly offset by a strong improvement in our expense ratio.

At the same time, the combined ratio rose by 0.8 percentage points to 96.3% in 2020.

Life/Health insurance: Strong operating profit and healthy sales

In life segment, the German insurer informed the FY2020 present value of new business premiums, decreased to EUR 61.5 billion (vs. EUR 67.0 billion), impacted by COVID-19 restrictions. The largest volume decreases were seen in Germany and in the United States. The negative effects were partly offset by increased volumes in Italy.

At the same time, the new business margin (NBM) declined to 2.8 (3.2) percent due to the strong decline of interest rates. This was largely offset by product repricing and an improved business mix, with a continued shift to preferred lines of business. The value of new business (VNB) dropped to EUR 1.7 billion (vs. EUR 2.2 billion) in 2020, driven by a combination of lower volumes and decreased margins.

Operating profit decreased to EUR 4.4 billion (EUR 4.7 billion) in 2020. This was mainly due to the disposal of ALLIANZ Popular in Spain as well as loss recognition and a positive prior-year impact in the United States.

Asset Management: Total assets under management at all-time high

In asset management business line, third-party assets under management (AuM) increased by EUR 26 billion to EUR 1,712 billion in 2020.

At the same time, total assets under management increased to EUR 2,389 billion euros in 2020, an all-time high, while operating profit increased by 5.5% to EUR 2.9 billion (vs.EUR 2.7 billion) in 2020 as revenues grew - mainly driven by higher average third-party assets under management.

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