Allianz Reports Robust Growth in All Segments

on May 15, 2013
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Allianz’s share price (FRA:ALV) gained 0.5 percent to €118.25 on Wednesday, May 15, after the Munich-based insurance giant reported a 24 percent rise in first-quarter profit and higher revenue and operating profit in all three segments of its business.

Net profit rose to €1.71 billion from €1.38 billion (₤1.17 billion) a year earlier, Europe’s largest insurer said in a statement. Revenue increased by 6.6 percent to €32 billion (₤27.14 billion) – the highest quarterly revenue so far for Allianz. Operating profit was up 20 percent to €2.8 billion (₤2.38 billion), matching the preliminary data released last week ahead of the annual shareholders meeting.

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“This is a very encouraging start to the year. All segments are performing strongly thanks to our efforts in the previous years. Our customers profit as well, having received 25 billion euros in insurance benefits in the first quarter,” Dieter Wemmer, Allianz chief financial officer, said in the statement.
The main earnings driver in January-March was the 12 percent rise in operating profit from property-casualty insurance to €1.32 billion (₤1.12 billion), helped by absence of major claims in the quarter and mirroring similar results reported by Allianz’s peers. Rate rises in many markets and products lines contributed to the improvements, Allianz said.

The company’s asset management business contributed €900 million (₤763 million) to operating profit due to strong net inflows and a further improvement in the cost-income ratio. The life and health insurance division saw operating profit rise by four percent to €855 million (₤725 million), defying forecasts for an 11 percent decline. The segment benefitted from lower costs, which offset a fall in investment income in the first quarter.

The insurer said it was on track to meet its 2013 goal for operating profit of €8.7 to €9.7 billion (₤7.38-₤8.23 billion) compared with the €9.5 billion (₤8.06 billion) reported last year but saw no need to lift the guidance despite the higher first-quarter results. “In view of the existing market risks and a possible higher level of natural catastrophes, it would be inappropriate to simply annualize the current quarter’s operating profit,” Michael Diekmann, chief executive of Allianz, said in the statement.

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Allianz’s combined ratio, or total spending on claims and other costs as a percentage of premiums, improved to 94.3 percent in the first quarter from 96.2 percent a year earlier. A ratio above 100 percent means insurer’s claims and costs are higher than the premiums collected, resulting in a loss.
The insurer also said that the U.S. Atlantic hurricane season, which begins on June 1 and continues through November, adds uncertainty to the market, as demonstrated by last year’s costly damage caused by Superstorm Sandy.
**Allianz’s share price was €118.50 as of 15.05.2013, 09.10 GMT.**

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