Global insurer Allianz saw its net income fall 28.9% to €1.4 billion in the first quarter, driven primarily by the impact of coronavirus on its property and casualty segment.
Higher claims from natural catastrophes, as well as coronavirus-related losses, drove P&C operating profit down 29.1% to €1 billion against the prior year quarter.
Allianz’ combined ratio rose 4.1 percentage points to 97.8% in the first quarter compared to the prior year quarter.
Internal revenue growth, which adjusts for currency and consolidation effects, amounted to 3.7%, driven in particular by Allianz’ life and health segment but also supported by other business segments.
Total revenues increased 5.7% to 42.6 billion and operating profit declined 22.2% to €2.3 billion.
The non-operating result worsened as realised gains from the sale of Allianz Popular were more than offset by coronavirus-related market impacts.
Annualised return on equity amounted to 9.3%.
The asset management business segment reported a strong increase in operating profit due to a rise in assets under management driven revenues.
“The first quarter of 2020 showed the resilience of Allianz in these unprecedented circumstances,” said Oliver Bäte, Chief Executive Officer of Allianz SE.
“I am very proud of the operational preparedness of Allianz, the dedication of our employees and our IT that ensures the highest service levels for our customers even in this challenging situation.
“These are very testing times for us all, but I believe that together we will rise to this challenge.”
Total revenues in Allianz’ P&C segment rose by 4.2% to €20.3 billion while its underwriting result was pressured by an increase in losses from natural catastrophes and COVID-19 impacts.
Higher claims were partly offset by a strong improvement of Allianz’ expense ratio.
“COVID-19 has aggravated operating conditions in our Property-Casualty business segment,” said Giulio Terzariol, Chief Financial Officer of Allianz SE.
“Our combined ratio adjusted for natural catastrophes and COVID-19 impacts remains at 94 percent as we continue to focus strongly on technical excellence in underwriting and claims management in order to navigate successfully through this crisis jointly with our customers.”
Operating profit in L&H decreased to €0.8 billion and was mainly due to a lower investment margin, driven predominantly by higher impairments following the market downturn.
“New business margin in our Life/Health business segment held up very well during the first quarter of 2020 and sales were concentrated on our preferred lines,” said Giulio Terzariol.
“On the other hand, our operating result reflects the turbulences in financial markets. We continue to manage actively our product range and asset base to ensure the resilience and value proposition of our Life/Health business segment.”