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Allianz achieved solid results in Latin America in 2014 despite a more modest growth environment. Total revenues amounted to 2.44 billion euros (2013: 2.68 billion euros).The decline of 9 percent was negatively impacted by a volume decrease in Brazil and exchange rate effects. In a difficult market environment internal growth reached 3.1 percent.
In the Property and Casualty insurance business, Allianz recorded revenues of 2.10 (2.35) billion euros, down 10.6 percent. Internal growth of 2.4 percent was mainly driven by growth in Argentina across all lines of business, but was partly offset by negative volume effects in Brazil.
Revenues in the life insurance business were up 2.8 percent to 338 (329) million euros. This growth was mainly driven by Mexico. Operating profit was 16 (8) million euros, an increase of 100 percent.
"We still see growth opportunities for our business in the region. Even if a mixed economic constitution in Latin America remains difficult, we expect insurance penetration to increase in 2015,"said Helga Jung, Member of the Board of Management of Allianz SE responsible for Insurance in Iberia and Latin America, M&A, Strategic Participations, Legal and Compliance.
Despite a challenging year 2014 in Argentina with an hyperinflationary environment, the failure of holdout negotiations and adverse international conditions reinforcing domestic fragilities, Allianz Argentina presented good results: Revenues climbed 27.6 percent to 381 (298) million euros. Operating profit grew to 20 (16) million euros in 2014, an increase of 22.0 percent year on year.
In 2014, Allianz Argentina was once more recognized by brokers as the best insurance company. Allianz improved its position in the highly fragmented insurance market and moved up from number eleven in 2007 to number four (4.8 percent of Property and Casualty market share in Argentina).
"Allianz achieved profitable growth in Argentina over the last decade. We are convinced that we can strengthen our competitive position and continue to gain market share," said Fabiana Castiñeira, CEO of Allianz Argentina.
At the start of 2014, Allianz implemented its IberoLatAm platform, which will further support the retail orientation through simplified processes and standardized products.
Negatively affected by instabilities of the system, particularly severe in the first half 2014, and the cool-down of overall economy in Brazilian market, revenues in the Property and Casualty as well as in the Health insurance business declined to 1.13 (1.44) billion euros. Operating profit dropped to minus 179 (plus 67) million euros. In this environment Allianz strengthened its capital by 105 million euros.
Following an initial stabilization phase, efficiency gains achieved through the platform should start taking off in the second half of 2015.
"2014 was a year of investments to enhance the company's technological capacity in order to enable us to compete with a differentiating edge when it comes to mass insurance in the country. Although sales and profits were adversely impacted in the period required for the stabilization of the system, we resumed growth in the volume of premiums in the second half of the year reaching the same levels as those recorded in 2013. Therefore, we are expecting significantly improved operating profit for the last quarter of 2015,"said Miguel Perez Jaime, CEO of Allianz Brazil.
Revenues in the Property and Casualty business increased 4 percent to 369 (355) million euros in 2014. Operating profit in this segment declined to minus 5 (plus 28) million euros in 2014, due to reserves strengthening particularly in the motor segment and a negative run-off.
Revenues in the Life insurance business decreased 20 percent to 61 (76) million euros for the full year 2014, as a result of portfolio restructuring in Group segment. Operating profit improved to 6.9 (0.8) million euros, positively leveraged by extraordinary events.
“Allianz is well positioned to further build its strategy, continue addressing the Colombian retail segment. With the commitment of our Staff, Agents & Brokers and our solid brand awareness we have a comfortable basis for healthy growth in the coming years ”Ignacio Borja, CEO of Allianz Colombia, said.
Revenues in Mexico totaled 496 (504) million euros in 2014. This marks a decrease of 1.7 percent, driven by exchange rate effects (internal growth reached 2.7 percent).Over the same period, operating profit declined 3 percent to 27 (28) million euros.
Revenues for the Property and Casualty business, which included health insurance, decreased by 13.2 percent and reached 218 (251) million euros in 2014 due to lower non-renewals of large accounts in corporate business. Operating profit in this segment fell slightly in 2014 to 17.2 (20.7) million euros, but the overall combined ratio remains at a solid level of 91.9 (90.0) percent.
Business in Mexico was strongly driven by Life insurance activities. Supported by retail savings, revenues reached 278 (253) million euros, an increase of 9.7 percent. Operating profit grew by 22 percent to 9.3 (7.6) million euros.
"Continuing to leverage our retail and SME business is part of our core strategy. To pursue this goal, Allianz Mexico will focus its efforts on launching and delivering innovative life, health and Property and Casualty products, with the aid of a broad sales network of more than 3,000 agents," said Sergio Ghibellini, CEO of Allianz Mexico.
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