Berenberg has said it expects Q1 2022 for Allianz to be €600m over budget.
The firm said it based this analysis on natural catastrophe losses arising from European storms and floods in Australia, which it said were around €300m above the normal run rate. In addition, it calculated €300m worth of impairments on Allianz’s Russia investments, after life policyholder participation.
Berenberg wrote: “In total, this amounts to €600m extra charges above budget for Q1 2022 and compares with a quarterly earnings run rate of €3.4bn.”
The company looked at other factors, including the potential of exposures on aviation lines due to Russia’s recent moves regarding aircraft. It said that it believed Allianz had no significant exposure in this area and that any losses relating to trade credit insurance around Russia may be around €100m and would largely be offset by reserve buffers and reinsurance.
Overall, Berenberg said that Q1 2022 would be affected by a higher level of natural catastrophes and Russian impairments.
“However,” it added, “we believe this impact will be offset by lower frequency claims in motor in FY 2022E as a whole; we also think that operating earnings in subsequent years will benefit from higher reinvestment yields. We therefore believe the net impact of extra charges in Q1 2022E on Allianz’s valuation is likely to be relatively modest.”
Bereneberg’s analysis of Allianz’s financial state comes after the insurance carrier recently announced it was expanding its aggregate reinsurance protection this year. The insurer said it was also raising its catastrophe budget following natural catastrophe losses in 2021.
As Reinsurance News reported, Allianz’s full-year 2021 financial results show that the insurer recorded net natural catastrophe losses, after reinsurance, of €1.637bn, up significantly on the €880m seen in 2020.
Last year was another above-average year of catastrophe losses for the industry, and Allianz was mainly impacted by flood and storm events across Europe in the summer months.
