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Allianz sees improved P&C performance in H1 2022 as operating profit rises

5th August 2022 - Author: Luke Gallin

A strong performance within its property and casualty (P&C) business so far in 2022 has helped Allianz report a rise in operating profit for the first half of the year of 1.2% to €6.7 billion, while net income for the period dipped as a result of a provision booked in relation to the AllianzGI U.S. Structured Alpha proceedings.

new-allianz-logoAllianz attributes the rise in operating profit to higher operating profit in both its P&C and Asset Management segments, as the company saw positive developments in operating investment income and a rise in underwriting results in P&C insurance. Additionally, the insurer notes higher AuM-driven revenues in the Asset Management business.

However, growth in overall operating profit was largely offset by a dip in operating profit in the firm’s Life and Health (L&H) business, driven mostly by unfavourable market developments.

All in all, net income for H1 2022 amounted to €2.3 billion compared with €4.8 billion a year earlier, although this decline is mostly the result of the €1.9 billion provision the firm booked in Q1 related to the AllianzGI U.S. Structured Alpha proceedings.

“Allianz delivered another quarter of robust financial performance, driven by strong growth in our Property-Casualty business. Our operating profit and group solvency ratio proved resilient against heightened volatility and a fundamentally weaker economic environment,” said Oliver Bäte, Chief Executive Officer (CEO). “We are well-positioned to manage the impact of high inflation and the economic pressures that are particularly evident in Europe. Allianz will continue to deploy our advantages of stability and scale for the benefit of our customers and shareholders.”

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Within P&C, total revenues for H1 2022 increased by more than 12% to €37.7 billion, as operating profit jumped 5.2% to €3 billion on the back of a significantly higher operating investment result.

However, the P&C combined ratio weakened slightly to 94.1% against 93.4% in the prior year period. According to Allianz, higher natural catastrophes and weather-related claims and the normalisation of claims frequency was partially offset by a favourable run-off result.

In its Asset Management business, Allianz has announced H1 2022 operating revenue growth of 6.4%, year-on-year, to €4.1 billion. Further, operating profit increased by almost 2% to €1.6 billion.

Within L&H, the present value of new business premiums declined to €35.9 billion in H1 2022, as the impact of a group contract renegotiation in Italy in 2021 more than offset higher sales volumes for fixed index annuities in the U.S.

Operating profit at L&H fell from €2.5 billion in H1 2021 to €2.3 billion in H1 2022, which the firm attributes to an unfavorable market environment and a lower investment margin in Germany and the U.S.

All in all, the new business margin increased from 3% to 3.7% in H1 2022, driven by an improved business mix across entities.

“Our numbers highlight the strength and endurance of Allianz. In a quarter marked by heightened inflation and market volatility, we achieved a very strong operating profit in the second quarter, which emphasizes our ability to successfully navigate rapidly-evolving situations,” said Giulio Terzariol, Chief Financial Officer (CFO).

“Having reached the halfway mark of our full-year outlook, we remain confident about our long-term growth trajectory. We confirm our full-year outlook of operating profit of 13.4 billion euros, plus or minus 1 billion euros,” he added.

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