Reinsurance News

Allianz reports strongest Q3 despite higher nat cat experience

10th November 2021 - Author: Luke Gallin

Global insurer Allianz has reported its strongest ever third quarter performance in 2021, as total revenues and operating profit increased, year-on-year, driven by a solid performance in all business segments.

allianz-flagsAllianz has announced Q3 total revenue growth of 9.5% to €34.4 billion, alongside an 11.3% rise in operating profit to €3.2 billion when compared with the prior year period.

Across the business, net income rose by 2.3% to €2.1 billion for the third quarter of 2021.

In the first nine months of the year, operating profit jumped by more than 27% to €9.9 billion, which drove a double-digit increase of more than 38% in net income to €6.9 billion for the period.

Oliver Bäte, Chief Executive Officer of Allianz SE, commented: “This was our strongest-ever third quarter. I see this as a confirmation of our ability to serve customers and investors alike.

“Extreme weather events and rapid macroeconomic shifts highlight the important contribution that insurers and asset managers can make to society. And our solid numbers prove that we can do so with a healthy financial performance.”

Within its Property and Casualty (P&C) insurance segment, Allianz has reported total revenue growth of 9% to €14.1 billion, a broadly unchanged operating profit of €1.3 billion, and a slightly weaker combined ratio of 94.7%.

During the quarter, Allianz booked natural catastrophe losses of €659 million, or 4.9% of premiums, which is far higher than the €85 million of nat cat losses reported for the same period last year.

The main driver of the insurer’s P&C nat cat losses were the European floods, which had a €400 million impact on the company’s operating profit in the quarter.

Last month, Allianz raised its gross losses for the floods to roughly €1.1 billion, so the fact it’s net losses for the event has come in at approximately €400 million suggests the firm has made a big reinsurance recovery.

Hurricane Ida and a number of storm and hail events cross Europe contributed a further €100 million of nat cat losses for Allianz in Q3, while weather-related losses, excluding nat cat, came in below the figure seen in Q3 2020.

In the first nine months of the year, the P&C segment recorded a rise in revenues to €47.7 billion, and a rise in operating profit to €4.2 billion. Importantly, the P&C underwriting result improved significantly in the 9M period, despite higher claims from catastrophes.

In fact, the P&C 9M 2021 underwriting result reached a positive €2.2 billion, which is up almost 62% on the same period a year earlier. Allianz attributes this improvement mostly to negligible COVID-19 losses and a better run-off result.

Overall, the combined ratio of the first nine months of the year strengthened, year-on-year, to 93.9%.

Giulio Terzariol, Chief Financial Officer (CFO) of Allianz SE, said: “I am proud of our ability to provide considerable financial support to our customers affected by the extreme weather events this year even while delivering a good operating performance.

“Our Property-Casualty franchise is strong and we continue to focus on underwriting discipline and productivity to remain on our growth and margin trajectory.”

In the Life and Health (L&H) business, the present value of new business premiums (PVNBP) increased to €19.7 billion in Q3 2021, and to €58.9 billion for 9M 2021, when compared with the prior year periods.

The new business margin expanded to 3.4% in Q3 2021 and 3.2% in 9M 2021, compared with 2.9% and 2.9% a year earlier, respectively.

Operating profit within L&H increased from €1.1 billion in Q3 2020 to €1.3 billion in Q3 2021, and from €2.9 billion in 9M 2020 to €3.7 billion in 9M 2021.

“Our Life and Health business is showing dynamic growth and margins continue to expand as we efficiently manage our business in an improving economic environment. This bodes well for a sustainable and strong contribution to our Group results,” said Terzariol.

Finally, on the asset management side of the business, the insurer has announced growth in third-party assets under management of €51 billion in the third quarter of 2021, while total assets under management increased to €2,548 billion.

The operating profit within this part of the business spiked by 30.2% to €882 million for the third quarter of 2021.

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