“A good start,” were the words used by Dieter Wemmer, chief financial officer of Allianz SE, as the company delivered its first quarter business report this morning, following on from its initial quarterly update at the beginning of the month. Indeed for the most part the results were certainly pleasing for the firm – albeit with one significant blip.
That blip came in the area of property and casualty insurance, with operating profit declining 12.7% compared to the same quarter during the previous year. This result was “due to a lower underwriting result driven by… an increase in claims stemming from natural catastrophes and a negative impact from the Ogden discount rate change,” and, as a consequence, the firm saw its combined ratio rise to 95.6% - up from 93.3% one year earlier.
However, Wemmer remained confident about the unit’s performance over the year as a whole.
“The property and casualty business segment is on track to meet its full-year target despite higher quarterly charges compared to prior year for large losses, storms in Europe and Australia, and the Ogden discount rate change,” he said.
Other aspects of the business were strong enough to pull Allianz to an overall surge in operating profits – up by 9.4% to stand at 2.9 billion euros, with total revenues up 2.5% to 36.2 billion euros.
Particularly notable was the performance of its life and health business with statutory premiums growing by 1.3% to 16.9 (16.7) billion euros “due to strong single premium growth from the sale of capital-efficient products in Germany and higher unit-linked premiums in Taiwan, which compensated for the decline in premiums in the United States.”
“The life and health business segment enjoyed an outstanding start to the year with operating profit rising by more than third, mainly driven by a strong investment margin in the United States,” added Wemmer. “Even with low interest rates, our new products create value for both our customers and shareholders.”
Profits up at Allianz but combined ratio takes a hit
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