Allianz Group: Report for the First Half of Fiscal 2001
Allianz remains on profitable growth course / Rise in premium income and improvement of combined ratio
Headquarters of Allianz in Munich Photo: allianz.com news
The Allianz Group continued on its path of earnings-oriented growth in the first half of fiscal 2001. Worldwide premium income rose by 7.1 percent to 37.6 billion euros. As a consequence of a clearly reduced realization of capital gains in the first half of fiscal 2001 in comparison with the same period in the previous year, half-year net income fell by 7.8 percent from 1.5 to almost 1.4 billion euros. Profit forecasts for the whole of fiscal 2001 remain unaltered: net income is expected to rise by around 13 percent, calculated without including Dresdner Bank. This is based on a comparison with the previous year’s net income of 2.4 billion euros, after adjustment for the effects of tax changes.
Total premiums increased by 7.1 percent
Premium income up
Total premium income rose in the first half of the year by 7.1 percent, from 35.1 to 37.6 billion euros. After having accounted for the effects of consolidation and exchange rates, this translates into growth of 5.1 percent, noticeably higher that the 4.4 percent of the first quarter. IAS accounts showed gross premium income increasing by 7.9 percent from 29.1 to 31.4 billion euros.
Premium income from property and casualty insurance rose by 9.7 percent, from 20.3 to 22.3 billion euros. Measured as a proportion of group premium income, this represents a slight increase to almost 59 percent. After adjustment for the effects of consolidation and exchange rates, growth was 7.2 percent. This was primarily a result of tariff adjustments, which had a positive effect in particular on auto insurance in the majority of European countries.
This positive development, coupled with lower claims frequency in many countries and the absence of major storm damages led to a clearly improved combined ratio (the ratio of claims expenditure and costs to net premium income). The combined ratio improved by 2.8 percentage points, moving from 105 percent to 102.2 percent. The loss ratio fell by 2.6 percentage points from 77.4 percent to 74.8 percent. Improvements were seen in particular in Austria, France, Germany, Spain, and the UK.
For life and health insurance, total premium income rose by 3.4 percent from 15.1 to 15.6 billion euros. Just under 40 percent of this income resulted from investment-orientated products, sales of which went up only by 3.3 percent from 6 to 6.2 billion euros. As a result of strong volatility in capital markets, demand for these products in Europe lessened significantly, in particular in France and Italy. Adjusted for the effects of consolidation and exchange rates, growth of 2.3 percent was achieved. IAS accounts, which only record the risk and cost components of investment-oriented products, showed an increase in premium income of 3.4 percent, from 9.1 to 9.4 billion euros.
In the first half of fiscal 2001, the result before taxes and amortization of goodwill was 2.9 billion euros, thereby 0.8 billion euros less than in the first half of 2000. Amortization of goodwill leapt by 96 million euros to 318 million euros. Of this, 100 million euros were attributed to PIMCO, Nicholas Applegate and Zwolsche Algemeene. Tax expenditure reduced from 1.2 to 0.7 billion euros. Minority interests in the results fell from 789 to 545 million euros.
After taxation, amortization of goodwill and minority interests, the Allianz Group attained half-year net income of 1.4 billion euros. This constitutes a reduction of 7.8 percent as compared to the same period in the previous year. The reduction resulted principally from investment income having fallen significantly. After a large part of the anticipated investment income in fiscal 2000 was realized in the first half of that year, the current year is characterized by restraint in the realization of capital gains, in view of weak capital market development.
On June 30, 2001, assets under management totaled 780 billion euros. Of this amount, 369 billion euros constitute investments in insurance business, which climbed by 1.3 percent or 5 billion euros since year end fiscal 2000. This amount is divided between the Group’s own investments of 344.4 billion euros, and 24.6 billion euros of investment in connection with unit-linked life insurance products.
Investments for third parties (outside the consolidated balance sheet) reached 397.9 billion euros, having grown by 18 percent or 61.5 billion euros in the first six months of the year. 35 billion euros of this increase can be attributed to Nicholas Applegate. This company was consolidated for the first time in the first quarter of 2001.
During fiscal 2001, Allianz anticipates a rise in total premium income of at least 5 percent to slightly above 72 billion euros, based on the previous year's exchange rates. In addition, it is assumed that weaker figures concerning new life insurance business from the first half-year will be compensated for in the second six months. An increase of around 13 percent in net income is currently anticipated (before inclusion of Dresdner Bank). The basis used for comparison in this calculation is the profit of 2.4 billion euros made in fiscal 2000, after adjustment for the effects of changes in taxation.
As of June 30, 2001, the Allianz Group employed 122.432 employees worldwide, 2749 more than at the end of the previous year. This increase resulted primarily from new acquisitions.
Cautionary Note Regarding Forward-Looking Statements
Certain of the statements contained herein may be statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, the words "may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential, or continue” and similar expressions identify forward-looking statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (i) general economic conditions, including in particular economic conditions in the Allianz Group's core business and core markets, (ii) performance of financial markets, including emerging markets, (iii) the frequency and severity of insured loss events, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) interest rate levels, (vii) currency exchange rates including the Euro – U.S. dollar exchange rate, (viii) changing levels of competition, (ix) changes in laws and regulations, including monetary convergence and the European Monetary Union, (x) changes in the policies of central banks and/or foreign governments, (xi) the impact of our acquisition of Dresdner Bank, including related integration issues, and (xii) general competitive factors, in each case on a local, regional, national and / or global basis.
The matters discussed in this release may also involve risks and uncertainties described from time to time in Allianz AG’s filings with the U.S. Securities and Exchange Commission. Allianz AG assumes no obligation to update any forward-looking information contained in this release.
Premium income from property and casualty insurance rose by 9.7 percent, from 20.3 to 22.3 billion euros. Measured as a proportion of group premium income, this represents a slight increase to almost 59 percent. After adjustment for the effects of consolidation and exchange rates, growth was 7.2 percent. This was primarily a result of tariff adjustments, which had a positive effect in particular on auto insurance in the majority of European countries.
This positive development, coupled with lower claims frequency in many countries and the absence of major storm damages led to a clearly improved combined ratio (the ratio of claims expenditure and costs to net premium income). The combined ratio improved by 2.8 percentage points, moving from 105 percent to 102.2 percent. The loss ratio fell by 2.6 percentage points from 77.4 percent to 74.8 percent. Improvements were seen in particular in Austria, France, Germany, Spain, and the UK.
For life and health insurance, total premium income rose by 3.4 percent from 15.1 to 15.6 billion euros. Just under 40 percent of this income resulted from investment-orientated products, sales of which went up only by 3.3 percent from 6 to 6.2 billion euros. As a result of strong volatility in capital markets, demand for these products in Europe lessened significantly, in particular in France and Italy. Adjusted for the effects of consolidation and exchange rates, growth of 2.3 percent was achieved. IAS accounts, which only record the risk and cost components of investment-oriented products, showed an increase in premium income of 3.4 percent, from 9.1 to 9.4 billion euros.
In the first half of fiscal 2001, the result before taxes and amortization of goodwill was 2.9 billion euros, thereby 0.8 billion euros less than in the first half of 2000. Amortization of goodwill leapt by 96 million euros to 318 million euros. Of this, 100 million euros were attributed to PIMCO, Nicholas Applegate and Zwolsche Algemeene. Tax expenditure reduced from 1.2 to 0.7 billion euros. Minority interests in the results fell from 789 to 545 million euros.
After taxation, amortization of goodwill and minority interests, the Allianz Group attained half-year net income of 1.4 billion euros. This constitutes a reduction of 7.8 percent as compared to the same period in the previous year. The reduction resulted principally from investment income having fallen significantly. After a large part of the anticipated investment income in fiscal 2000 was realized in the first half of that year, the current year is characterized by restraint in the realization of capital gains, in view of weak capital market development.
On June 30, 2001, assets under management totaled 780 billion euros. Of this amount, 369 billion euros constitute investments in insurance business, which climbed by 1.3 percent or 5 billion euros since year end fiscal 2000. This amount is divided between the Group’s own investments of 344.4 billion euros, and 24.6 billion euros of investment in connection with unit-linked life insurance products.
Investments for third parties (outside the consolidated balance sheet) reached 397.9 billion euros, having grown by 18 percent or 61.5 billion euros in the first six months of the year. 35 billion euros of this increase can be attributed to Nicholas Applegate. This company was consolidated for the first time in the first quarter of 2001.
During fiscal 2001, Allianz anticipates a rise in total premium income of at least 5 percent to slightly above 72 billion euros, based on the previous year's exchange rates. In addition, it is assumed that weaker figures concerning new life insurance business from the first half-year will be compensated for in the second six months. An increase of around 13 percent in net income is currently anticipated (before inclusion of Dresdner Bank). The basis used for comparison in this calculation is the profit of 2.4 billion euros made in fiscal 2000, after adjustment for the effects of changes in taxation.
As of June 30, 2001, the Allianz Group employed 122.432 employees worldwide, 2749 more than at the end of the previous year. This increase resulted primarily from new acquisitions.
Cautionary Note Regarding Forward-Looking Statements
Certain of the statements contained herein may be statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, the words "may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential, or continue” and similar expressions identify forward-looking statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (i) general economic conditions, including in particular economic conditions in the Allianz Group's core business and core markets, (ii) performance of financial markets, including emerging markets, (iii) the frequency and severity of insured loss events, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) interest rate levels, (vii) currency exchange rates including the Euro – U.S. dollar exchange rate, (viii) changing levels of competition, (ix) changes in laws and regulations, including monetary convergence and the European Monetary Union, (x) changes in the policies of central banks and/or foreign governments, (xi) the impact of our acquisition of Dresdner Bank, including related integration issues, and (xii) general competitive factors, in each case on a local, regional, national and / or global basis.
The matters discussed in this release may also involve risks and uncertainties described from time to time in Allianz AG’s filings with the U.S. Securities and Exchange Commission. Allianz AG assumes no obligation to update any forward-looking information contained in this release.
