Allianz expects flat operating profit in 2017

Germany’s insurance giant Allianz expects its 2017 operating profit to match the €10.8 billion it earned in 2016, according to its results press release.

In 2016, operating profit grew by 0.9 percent to €10.8 billion, which is near the upper end of its target range.

The life and health segment saw the strongest rise in operating profit – up 9.3 percent to 4.1 billion euros – with rising investment results as the key driver. The new business margin rose to 2.7 percent in 2016 compared to 2.2 percent in 2015 as Allianz responded to the low interest rate environment.

The property/casualty segment saw operating results decline 4.2 percent in 2016 mainly due to weaker investment results, which could not be offset by rising underwriting quality. The segment’s combined ratio, which measures underwriting profitability, improved 0.3 percentage points to 94.3 percent due in part to lower claims from natural catastrophes. Gross premiums written of the segment held steady at €51.5 billion euros compared to €51.6 billion in 2015.

In the asset management segment, operating revenues decreased 7.1 percent to €6.0 billion in 2016, mainly due to lower asset under management driven fees, primarily affected by decreased fee margins. Operating profit decreased 4.0 percent to 2.2 billion euros in 2016, as a decline in revenues could only partially be compensated by a reduction of operating expenses.

Nevertheless, the group’s net income attributable to shareholders was up 4.0 percent year-on-year at €6.9 billion in 2016.

“Allianz had a great year in 2016, with efforts invested in our Renewal Agenda starting to bear fruit,” said CEO Oliver Bäte. “All segments delivered well, thanks to the engagement of our excellent people, and our robust capital base puts us in a position of strength.”

“The year was filled with surprises, not all of them welcome, that challenged many assumptions, fuelled geopolitical uncertainty and market volatility, and that make 2017 difficult to predict.

Allianz has decided to launch a share buy-back program with a volume of up to €3 billion as part of a previously announced plan to return unused capital from the group’s budget for external growth from the period 2014 to 2016.

Today’s top stories

Allianz bullish on life business despite rating agency warning

Fairfax reveals substantial 2016 loss due to investments prior Allied World acquisition

Zurich restructures APAC commercial insurance; names new heads

CNA hires Endurance US CEO as new chief underwriting officer

Did you enjoy reading this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.