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Allianz reports 14% dip in net income; €1.3bn COVID-19 impact for 2020

19th February 2021 - Author: Luke Gallin

Global re/insurer Allianz has reported operating profit of €10.8 billion for 2020 and net income of €6.8 billion, which includes a negative COVID-19 impact of €1.3 billion for the period.

allianz-flagsOperating profit fell by more than 9% year-on-year, driven mostly by the adverse impacts from the ongoing COVID-19 pandemic.

As a result of the decline in operating profit and also the non-operating result, Allianz saw its net income fall by 14% in 2020 when compared with the previous year.

“I am grateful for the trust and confidence that our stakeholders placed in Allianz during the challenging year 2020. Our resilient results prove that we continued to deliver value and security to our customers, thanks to our highly-engaged workforce and state-of-the-art operations. We are hence in a good position to deliver on our 2021 ambition,” said Oliver Bäte, the company’s Chief Executive Officer (CEO).

In the firm’s property and casualty insurance business, total revenues increased slightly in 2020 to €59.4 billion, while operating profit declined by more than 13% to €4.4 billion.

RMS

Allianz notes that the P/C underwriting result was significantly impacted by the pandemic, notably in the commercial line of business, alongside higher claims from nat cat events and a lower contribution from run-off, somewhat offset by an improved expense ratio.

Overall, Allianz’s P/C segment has reported a combined ratio of 96.3% for 2020, which is up 0.8 percentage points on the prior year.

“The Property-Casualty business segment performed in line with our mid-point target for operating profit if COVID-19 related losses were excluded. Our disciplined underwriting and steady productivity improvements should yield substantial progress towards a 93 percent combined ratio in 2021,” said Giulio Terzariol, Chief Financial Officer (CFO) of Allianz.

In Life / Health insurance, the present value of new business premiums fell to €61.5 billion in 2020, impacted by restrictions related to the ongoing pandemic.

At the same time, the new business margin fell to 2.8% driven by the strong decline of interest rates, although this was largely offset by product repricing and an improved business mix during the year.

Within L/H insurance, operating profit fell from €4.7 billion in 2019 to €4.4 billion in 2020, mainly due to the disposal of Allianz Popular in Spain as well as loss recognition and a positive prior-year impact in the U.S.

“We witnessed a recovery in sales and margin resilience in the Life/Health business segment at the end of 2020. I am pleased that we continue to successfully meet customer expectations by innovating and adapting our business portfolio. Our operating performance has sound foundations and I look forward to a solid 2021 performance,” said Terzariol.

During 2020, third-party assets under management increased by €26 billion, driven by positive market effects of €96.5 billion and net inflows of €32.8 billion.

Total assets under management actually reached a new high for Allianz in 2020, totalling €2,389 billion.

“Strong net inflows in the Asset Management business segment are testimony to our attractive customer value proposition. The new all-time high in assets under management and strong productivity bode very well for a good start in 2021,” said Terzariol.

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