Profits at Allianz rebound in Q3 but remain depressed for YTD

Allianz posted a solid increase in its profits in the third quarter of 2020. But its profit for the first nine months of the year remains depressed and the insurer’s revenues also decreased in the third quarter and first nine months of the year.

The company posted a net income of €2.1 billion in Q3, a 5.9 percent improvement on the same period a year earlier. But for the first nine months its profit is now €5 billion, a decline of almost 18 percent on the year before.

Its revenues in the third quarter decreased by 6.1 percent to €31.4 billion compared with the year before and its revenues for the first nine months are now €104.9 billion, a small decreased on the same period a year earlier.

In light of the ongoing economic uncertainties related to the COVID-19 pandemic, the board of management of Allianz has decided to discontinue the previously suspended Share Buyback Program 2020 and to no longer execute the outstanding part of the program amounting to €750 million.

“We have delivered solid results in an environment that will remain challenging. Not just our financial performance has been resilient, but we have also enjoyed strong support from our fantastic staff around the world. And Allianz has once again been recognized by Interbrand as #1 insurance brand globally,” said Oliver Bäte, CEO of Allianz. “Therefore, we remain confident to not just weather the COVID-19 crisis well, but to build an even stronger Allianz for the benefit of all stakeholders.”

Within its property/casualty unit, total revenues declined by 1.8 percent to €12.9 billion in the third quarter of 2020 driven by a negative volume effect of 9.0 percent and a positive price effect of 5.6 percent. The main contributors to this decline were Allianz Partners, AGCS, and Euler Hermes, whereas Germany, Turkey, and China recorded positive internal growth.

Its P/C operating profit was broadly unchanged at €1.3 (1.3) billion in the third quarter of 2020. The underwriting result was affected by the COVID-19 pandemic and a lower contribution from run-off. These effects were largely offset by lower claims from natural catastrophes.

“I am pleased by the resilience of our underwriting profitability,” said Giulio Terzariol, Chief Financial Officer of Allianz SE. “Excluding COVID-19 effects, we see good underlying improvements in the combined ratio. We have strong underwriting discipline and technical excellence embedded in our culture and continue to focus on productivity improvements.”