November 11, 2016 by Canadian Underwriter
Allianz Group has reported that net income attributable to shareholders climbed 36.5% in the third quarter of this year ending Sept. 30 to 1.9 billion euros, due partly to better performance across its business segments.
However, for the nine-month period ending Sept. 30, net income attributable to shareholders was 5.1 billion euros, down 1.1% from 5.2 billion euros in 9M 2015, Munich, Germany-based Allianz said in its financial results, released on Friday.
Allianz reported an 18.2% rise in operating profit to 2.9 billion euros in Q3 2016 from the same period a year ago, largely due to a higher investment margin in the Life and Health segment. The Property and Casualty segment delivered a 4.3% rise in operating profit “due to stronger underwriting and investment results,” Allianz said in a press release. For the 9M 2016 period, operating profit eased 1.7% to 8 billion euros, driven by the P&C segment and, to a lesser extent, Asset Management.
Total revenues rose 0.5% to 27.7 billion euros in the most recent quarter from 27.5 billion euros. But for the nine-month period ending Sept. 30, total revenues decreased by 3.2% to 92.4 billion euros from 95.5 billion in 9M 2015.
For the P&C Insurance segment, gross premiums written (GPW) held mostly steady at 40.4 billion years for 9M 2016 (9M 2015: 40.7 billion euros). Operating profit fell 9.9% to 3.9 billion euros compared to the first nine months of 2015, partly due to high claims from natural catastrophes in the second quarter and lower investment income, the release said. 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 for the nine-month period was 94.4% (9M 2015: 94.1%).
P&C GPW for the third quarter held steady at 11.5 billion euros in the third quarter in the segment, Allianz reported. Operating profit increased by 4.3% to 1.4 billion euros in the third quarter in the segment. The underwriting result benefited from a benign natural catastrophe environment and lower large losses. The combined ratio also improved to 93.5% in Q3 2016 from 94.1% in Q3 2015, the insurer reported.
In Life and Health insurance, operating profit for the first nine months of 2016 increased by 13.8% to 3.1 billion euros. Statutory premiums decreased by 4.7% to 47.5 billion euros. Statutory premiums in the third quarter increased 1.6% to 14.5 billion euros from 14.3 billion euros, driven by higher sales of capital-efficient products in Germany and the United States. This was partially offset by lower unit-linked premiums in Italy and Taiwan, the release said. Operating profit increased by 53% to 1.1 billion euros from the third quarter of 2015 mainly due to higher investment margins in the U.S. and France.
In Asset Management, third-party net outflows and negative foreign currency translation effects were more than offset by a strong positive market return and the acquisition of Rogge Global Partners, which together led to a 4% increase in third-party assets under management (AuM) from Dec. 31, 2015.
The segment’s operating profit decreased by 5.8% to 1.6 billion euros in the first nine months of 2016, mainly as a result of lower margins and lower average AuM, leading to declined AuM driven revenues. In addition, a decrease of performance fees also had a negative impact on the operating profit, Allianz reported in the release. Lower operating expenses partially offset the operating revenue decline. Operating profit edged slightly higher to 604 million euros in the third quarter from 600 million euros in Q3 2015. Lower operating expenses more than offset a decrease in third-party AuM-driven revenues and lower performance fees.
“Efforts to develop our business in a very difficult environment are paying off,” said Dieter Wemmer, chief financial officer of Allianz SE, in the release. “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 10.5 billion euros, give or take 500 million euros.”