Allianz reports strong start to year, with 2015 Q1 operating profit and net income both up over 2014 Q1

Allianz Group’s net income increased 11.3% to 1.937 billion euros in the first quarter of 2015 compared with 1.740 billion euros in the first quarter of 2014.

The Property-Casualty insurance segment saw the largest hike in net income, rising 42.9% to 922 million euros in 2015 Q1 compared with 645 million euros in 2014 Q1. The Life/Health segment also saw a big jump, increasing 17.5% to 739 million euros compared with 629 million euros.

With regard to Group operating profit, it grew 4.8% to 2.855 billion euros in the first quarter of 2015 compared with 2.723 billion euros the same quarter of 2014.

By line, Allianz reports operating profit for P&C insurance was 1.285 billion euros in 2015 compared with 1.489 billion euros in 2014 Q1 (down 13.7%); Life/Health insurance was 1.104 billion euros compared with 880 million euros (up 25.5%); Asset Management was 555 million euros compared with 646 million euros (down 14.0%); Corporate and Other was -101 million euros compared with -222 million euros; and Consolidation was 13 million euros compared with -69 million euros. [click image below to enlarge]

“Allianz achieved very good results in the first quarter compared to last year’s already strong first quarter,” Dieter Wemmer, chief financial officer of Allianz SE, notes in a statement.

Looking specifically at P&C insurance, the statement notes that “revenues experienced excellent growth” and saw “continued strong internal growth,” although the combined ratio took a hit from natural catastrophes.

Gross premiums written (GPW) for P&C insurance increased 13.9% to 17.34 billion euros in 2015 Q1 compared with 15.22 billion euros in the first quarter of 2014. “Strong internal premium growth came especially from Allianz Global Corporate & Specialty, Allianz Worldwide Partners, Germany and Latin America,” the company reports.

Although GPW was up, operating profit was down, “mainly from a higher impact from natural catastrophes as well as restructuring expenses following the sale of the private lines of Fireman’s Fund,” notes the statement. [click image below to enlarge]

The quarterly combined ratio for P&C insurance increased by 2.0 percentage points to 94.6% in 2015 Q1 – up from 92.6% in 2014 Q1 – with Allianz reporting that claims from natural catastrophes amounted to 222 million euros, or 1.9 percentage points. The company cites the impact on results of, in particular, storms Elon and Felix in January, and Niklas and Mike in March.

For storms Niklas and Mike, these have caused 140,000 claims to date in Germany, with Allianz to cover damages of about 150 million euros.

“Claims from natural catastrophes were substantially higher than last year, affecting operating profit. Total natural catastrophe and weather-related losses were roughly in line with expectations,” Wemmer notes.

Other Allianz 2015 Q1 results include the following:

• group revenues increased to 37.8 billion euros in 2015 Q1, an 11.2% increase over the 34.0 billion euros in 2014 Q1;

• operating profit for the Life and Health insurance segment surpassed 1 billion euros for the first time, with statutory premiums rising to 18.82 billion euros (from 17.16 billion euros in 2014 Q1);

• third-party assets under management increased as a result of market movements and foreign currency exchange effects, while operating revenues in Asset Management increased 3.7% to 1.57 billion euros (from 1.52 billion euros in 2014 Q1); and

• the conglomerate solvency ratio rose by 10 percentage points to 190% as of March 31, 2015.

Despite the strong start to 2015, Wemmer cautions the challenge of the current low-interest rate environment remains. Still, he emphasizes, the company is “well-prepared for the rest of 2015.” Allianz confirms in the statement that its operating profit outlook for 2015 is 10.4 billion euros, plus/minus 400 million euros.