Insurance giant Allianz’s fourth-quarter and full-year 2017 results have been dented by the impacts of major catastrophe events, including the California wildfires, hurricanes Harvey, Irma and Maria, as well as European windstorms and other events.
Natural catastrophe losses rose to EUR 1.1 billion for the insurer in 2017, up from EUR 700 billion in the prior year.
While Allianz’s total revenues rose by 3% to EUR 126.1 billion for the year and operating profit rose 0.4% higher to EUR 11.1 billion in 2017,, Allianz’s Property and Casualty segment saw operating profit fall by 7.5% largely due to higher natural catastrophe claims.
As a result, net income attributable to Allianz shareholders dropped by 2.3% to EUR 6.8 billion for 2017, but this was also impacted by one-off charges from the U.S. tax changes and effects from the sale of a subsidiary Oldenburgische Landesbank (OLB), which cost Allianz EUR 210 million during the fourth-quarter.
Commenting on the results, Chief Executive Officer of Allianz SE Oliver Bäte said, “The Group met its performance targets, maintained an extraordinary level of capital strength and returned three billion euros to shareholders through share buybacks in 2017. These successes are largely due to the impressive efforts of Allianz employees and their pursuit of the goals we set out in our Renewal Agenda.
“Allianz also made important strategic strides, including an insurance joint venture in the United Kingdom with LV=, and continued expansion into fast-growing markets like Africa. We also increased our stake in Euler Hermes to over 90 percent, fortifying our engagement in property and casualty insurance.”
2017 saw record levels of natural catastrophe industry losses and Allianz, given its scale and reach, took its share during the year, despite its careful management of catastrophe exposures within its business.
“Hurricanes, storms and wildfires hit the insurance industry hard in 2017, making it the costliest natural catastrophe year ever for the insurance sector,” stated Bäte. “We worked quickly to help our customers get back on their feet. This is the most fulfilling part of our business. For natural catastrophes alone, we paid out some 1.1 billion euros in customer benefits.”
“Natural catastrophes, storms and weather-related losses played a big role in 2017. But underlying performance measures remain strong and we remain committed to our goal of improving the combined ratio to a sustainable 94 percent by the end of 2018,” added Chief Financial Officer of Allianz SE, Giulio Terzariol.
Allianz’s 2017 operating profit of EUR 11.1 billion came towards the upper end of its forecasted target for the year, which had been EUR 10.3 to 11.3 billion.
For 2018 the insurer has set itself a similar target level.
Chief Financial Officer of Allianz SE, Giulio Terzariol, explained, “The Group entered 2018 at cruising speed, placing our three-year performance targets within reach. We are confident that Allianz is well positioned to deliver strong financial results again this year. The Group aims to achieve an operating profit of 11.1 billion euros in 2018, plus or minus 500 million euros, barring unforeseen events.”
