Allianz on track for 2019 targets, second quarter net income up 13.1%

German insurer Allianz enjoyed a strong second quarter 2019 with operating performance and net income rising above estimates, but its property/casualty operating profits fell back due to lower investment earnings.

The group’s net income attributable to shareholders increased 13.1 percent to €2.1 billion in Q2 2019 due to operating profit growth (5.4 percent to €3.2 billion) and an improved non-operating result. In the same quarter last year, the insurer posted a net income of €2 billion.

In the property and casualty business, the combined ratio was broadly flat at 94.3 percent in the quarter. The insurer said a lower run-off result was partially offset by a strong improvement in its expense ratio. The segment's operating profit declined by 5 percent to €1.4 billion compared to the second quarter of 2018, driven by a lower investment result.

However, the results in Allianz’s life and health segment helped the insurer's overall profitability. Its operating profit increased to €1.2 billion in the second quarter of 2019, mainly driven by the change in the DAC amortization period for the fixed index annuities in the US, and by volume growth.

Allianz stated that AGCS, Euler Hermes, and Germany were the main growth drivers in the first half of 2019. The net income rose 7.3 percent to €4.1 billion, and the operating profit grew by 6.4 percent to €6.1 billion in H1, which the insurer said is above the mid-point of its full-year target range.

“I am proud that the Allianz team has once again delivered a healthy performance,” said Oliver Bäte, chief executive officer of Allianz SE. “Sustainable performance is the result of our rigorous strategy execution that provides desired solutions for our customers. Our half-year results testify that Allianz is on track to achieve its full-year targets.”

Giulio Terzariol, chief financial officer of Allianz, said: “We are seeing a solid performance in our Property-Casualty segment despite a lower investment result. Internal growth, supported by healthy rate changes, shows the strength of our business. Our underwriting remains disciplined while we keep on making progress with our productivity as shown by the improved expense ratio.”

He added: “Our Life/Health segment continued holding up very well in the low-interest rate environment, as shown by our dynamic sales. We kept on growing across geographies and in our preferred lines of business. Healthy new business margins will support our future operating profitability.”

“Asset Management again delivered strong results. With third-party assets under management at a new record level of 1,591 billion euros, we are on track to reach our operating profit full-year target.”

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