Canadian Underwriter

Nat cat losses for Allianz Group almost twice 10-year average for Q2

August 8, 2016   by Canadian Underwriter

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Allianz Group reported Friday a 2.9-point deterioration in its property & casualty combined ratio, as natural catastrophe losses were “almost twice” its 10-year average for the second quarter.

Munich-based Allianz reported its p&c operations had a combined ratio 96.4% during the three months ending June 30, compared to 93.5% during the same period in 2015.

Allianz Group’s p&c loss ratio was 68.1% in the most recent quarter, up 2.4 points from 65.7% in Q2 2015.

The nat cat impact was 1.1 points in Q2 2015 and 4.4 points in Q2 2016.

Allianz reported nat cat losses of 500 million euros in Q2, “almost twice the 2Q average of the last 10 years.” Losses from European floods and storms were 300 million euros.

Allianz Global Corporate & Specialty SE (AGCS) had a 0.5-point improvement in its combined ratio, from 110.9% in Q2 2015 to 110.4% in the most recent quarter.

For the first six months of 2016, AGCS had a combined ratio of 102.9%, down from 104.9% in the first six months of last year.

“Higher favorable runoff from prior years’ business was only partially offset by major Nat Cat losses in Q2 2016 caused by United States hailstorms, Canadian wildfires, floods in Germany and by other losses,” Allianz said Aug. 5.

In North America, AGCS writes commercial property, liability, aviation and marine insurance, well as financial lines.

In Canada, AGCS has offices in Toronto and Vancouver.

AGCS recently announced a new transactional liability unit in North America, which AGCS said will cover firms against “inaccuracies made about target companies or businesses in connection with mergers, acquisitions and divestitures.”

AGCS had gross written premiums of 4.247 billion euros during the first half of 2016, down from 4.48 billion euros during the first six months of 2015.

“This decline is driven by ongoing pressure on rates across various lines of business in a competitive market environment,” Allianz said, adding last year’s results reflect “top line results” before the sale of the personal lines of Fireman’s Fund to ACE Ltd.

As of Jan. 1. 2015, AGCS integrated the commercial p&c businesses of both AGCS and Fireman’s Fund under the AGCS brand. In April of last year, ACE closed its purchase of the personal insurance business of Fireman’s Fund. ACE has been known as Chubb Ltd. since it ACE closed its US$13.9-billion acquisition earlier this year of The Chubb Corp.

On Aug. 5, Allianz Group reported total revenues of 29.4 billion euros in the latest quarter, down 2.5% from 30.2 billion in Q2 2015. Of its Q2 2016 revenues, 11.6 billion euros were in p&c, 16.3 billion euros were in life and health, 1.4 billion euros were in asset management and about 100 million euros were in corporate and other.

The euro was trading at Cdn$1.46 on Aug. 8.

Allianz Group reported net income attributable to shareholders was 1.1 billion euros in the latest quarter, down 46% from 2 billion euros in Q2 2015.

In addition to AGCS, other Allianz subsidiaries in Canada include investment fund provider Pimco Canada Corp. and trade credit insurance company Euler Hermes.

The Co-operators Group Limited previously announced that TIC Travel Insurance Coordinators and SelectCare Worldwide merged their travel insurance operations in Canada with those of Allianz Global Assistance Canada. The combined entity, operating as Allianz Global Assistance, is 45%-owned by AZGA Service Canada Inc. and Co-operators Life Insurance Company and 55%-owned by Allianz Worldwide Partners S.A.S. The lead underwriter of Allianz Global Assistance is a subsidiary of The Co-operators.

For the first six months of the year, Allianz Group reported gross written premiums of 41.14 billion euros and net premiums earned of 34.58 billion euros.

Net income was 3.479 billion euros during the first half of this year, down from 4.048 billion euros in the first six months of 2015.

Allianz Group reported net realized gains of 4.144 billion euros in the six months ending June 30, 2016, down from 4.931 billion euros during the first half of 2015. Fees and commission income dropped from 5.317 billion euros in the first half of 2015 to 5.107 billion euros during the first half of this year.

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