Perlet: "We want to outperform our targets"
Allianz.com News spoke to CFO Helmut Perlet about the results for the third quarter of 2005. He explains why Allianz is making profits despite the severe natural catastrophes and indicates where the Group is experiencing particularly strong growth.
Allianz.com News: 2004 was already the most costly year ever for the insurance industry. However, major claims from 2005 might exceed even that…
Perlet: The hurricanes Katrina and Rita, floods in India and Europe - this was an extraordinary sequence of natural catastrophes. Overall, they exerted a negative burden totaling 753 million euros on our profits before taxes. Virtually all of our claims expenditure on natural catastrophes during the first nine months relates to this third quarter.
Helmut Perlet: "We want to grow"
? How much will this affect the result?
Perlet: We can be satisfied with the third quarter even in the property and casualty business, given the claims. A combined ratio of 97 percent is still very good in view of this unusual burden. During the first nine months, the combined ratio was 93 percent, significantly better than our target ratio of below 95 percent. I am therefore optimistic that we will achieve this target, even though the autumn and winter storms are still to come.
The diversification of our portfolio has also paid off. The three other segments cushion the burden for property and casualty business.
The diversification of our portfolio has also paid off. The three other segments cushion the burden for property and casualty business.
? To pursue the issue of property and casualty business further: Why is it profitable in spite of the immense damage caused by storms and flooding?
Perlet: Although this extreme sequence of natural catastrophes is very unusual, it doesn’t come entirely as a surprise. In cooperation with WWF, we had already published a report on climate change in June. The report concluded that natural catastrophes are becoming more frequent and getting more intense in their ferocity.
We’re tailoring our business to this situation. This means that we react flexibly to opportunities for growth in some markets, but we are also prepared to reject business if prices are not commensurate with the risk.
We’re tailoring our business to this situation. This means that we react flexibly to opportunities for growth in some markets, but we are also prepared to reject business if prices are not commensurate with the risk.
? Allianz is particularly keen to grow in the European pension provision market. Is this strategy already paying off?
Perlet: In line with our plans, life insurance and asset management are driving growth in Europe. In our core markets Italy, France and Germany, life insurance business has undergone double-digit growth.
The BVI comparison (Association of Investment and Asset Management) demonstrated that net inflows put Allianz Dresdner Global Investors at the top of the rankings in Germany during the first nine months. Our position as an integrated financial services provider played a major role in achieving this – our sales agents are an important channel for managed funds and banking products.
The BVI comparison (Association of Investment and Asset Management) demonstrated that net inflows put Allianz Dresdner Global Investors at the top of the rankings in Germany during the first nine months. Our position as an integrated financial services provider played a major role in achieving this – our sales agents are an important channel for managed funds and banking products.
? And what is the international perspective for asset management?
Perlet: Our Assets under Management for third parties rose by 21.5 percent to 711 billion euros. In the first nine months, we recorded net inflows totaling 48 billion euros. Moreover, continuing favorable capital markets contributed to a revenue increase to 1.93 billion euros. We made particularly strong advances in Germany and the USA.
Nevertheless, we won’t stand still. Quite the contrary: these successes show us what is possible in the future.
Nevertheless, we won’t stand still. Quite the contrary: these successes show us what is possible in the future.
? Does rapid growth come at the expense of profits?
Perlet: Quite the opposite. We are not simply experiencing strong growth; we’re becoming more profitable at the same time. Allianz Global Investors has continued to improve its cost-income ratio to an outstanding 57.8 percent. And in the life insurance segment, we have more than doubled quarterly net income to 376 million euros.
? How do you assess performance at Dresdner Bank?
Perlet: The big success story of the IRU is noteworthy here. The IRU was able to reduce the non-strategic and non-performing loan portfolio much faster and more successfully than was thought possible three years ago.
All in all, Dresdner Bank was able to stabilize its revenues, significantly reduce its loan loss provisions and moreover profit from a clearly improved business portfolio.
All in all, Dresdner Bank was able to stabilize its revenues, significantly reduce its loan loss provisions and moreover profit from a clearly improved business portfolio.
? Are there any new developments on the conversion of Allianz AG to a European company and on restructuring in Germany?
Perlet: The Ras transaction is on schedule.
By the end of the year, we want to be able to provide more information on the German holding company, including details of when and how the individual restructuring stages will take place. Our project groups are working very hard and I'm confident that it will be a success.
By the end of the year, we want to be able to provide more information on the German holding company, including details of when and how the individual restructuring stages will take place. Our project groups are working very hard and I'm confident that it will be a success.
? Are there any concrete figures regarding a possible job reduction in Germany?
No specific numbers exist within the company. Just how the new structures in Germany will affect jobs will be carefully analyzed by the beginning of 2006 and then reviewed by the relevant bodies. Any figure at this time lacks a serious basis.
? What is your forecast for the year?
Perlet: Despite natural catastrophes, we are well on track to exceeding all our operating targets.
As with all content published on this site, these statements are subject to our Forward Looking Statement disclaimer, provided on the right.
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