Allianz achieved very good results in the second quarter of 2017. Total revenues grew by 2.0 percent to 30.0 (second quarter of 2016: 29.4) billion euros. All business segments contributed to this increase with the majority coming from our Life and Health business segment. Operating profit amounted to 2.9 (2.3) billion euros, an increase of 22.9 percent, supported by all business segments, in particular by our Property and Casualty business. Net income attributable to shareholders increased by 83.4 percent to 2.0 (1.1) billion euros, driven by both the higher operating profit and improved non-operating result. The non-operating result in the prior year was burdened by the negative impact from our South Korean life business.
Basic Earnings per Share (EPS) amounted to 4.45 (2.39) euros. Annualized Return on Equity (RoE) was 13.4 percent (full year 2016: 12.3 percent). Annualized figures are not a forecast for full year numbers. The Solvency II capitalization ratio rose to 219 percent at the end of the quarter, compared to 212 percent at the end of the first quarter of 2017, mostly driven by favorable market developments.
The first half of 2017 was also a success, with all business segments contributing. Total revenues increased in all segments in the first six months of 2017. Operating profit in the half-year period rose 15.7 percent to 5.9 billion euros, well past the middle point of our earnings target for the full year. During the first half of the year, net income attributable to shareholders increased by an impressive 17.9 percent to 3.8 billion euros. The strongest growth was achieved by our Life and Health business, which alone saw a 78 percent increase in net income attributable to shareholders in the six-month period to 1.5 billion euros. Just as importantly, the Asset Management segment saw a 19.5 percent increase to 700 million euros while the Property & Casualty insurance segment saw a 7.7 percent increase in net income attributable to shareholders to 1.98 billion euros.
"We’re half way through our three-year Renewal Agenda plan, and at this stage it is clear that those efforts are bearing fruit for all our stakeholders,” said Oliver Bäte, Chief Executive Officer of Allianz SE. “We had a very good half-year with double-digit growth in operating profit and net income. Our diversified portfolio across business segments and regions can clearly deliver outstanding results. The strong capitalization reinforces the resilience and flexibility of Allianz. We can now say that we expect operating result for 2017 near the upper end of the target range of 10.8 billion euros, plus or minus 500 million euros.”
“We made excellent progress in underwriting and by stabilizing investment income in the property and casualty segment. The jump in quarterly operating profit growth is a clear sign that our efforts are paying off,” said Dieter Wemmer, Chief Financial Officer of Allianz SE.
In the first half-year of 2017, gross premiums written increased slightly to 29.4 (28.9) billion euros. Adjusted for foreign exchange and consolidation effects, internal growth amounted to 1.2 percent, mostly driven by positive developments at Allianz Worldwide Partners, in Germany and Spain. Operating profit improved 5.2 percent to 2.7 billion euros compared to the same period of the prior year due to a higher underwriting result. The combined ratio for the first half-year improved by 0.2 percentage points to 94.6 percent.
“The Life and Health business segment has experienced ample growth in this difficult environment. Because we are shifting to a new product mix that offer customers the chance of higher returns without overly burdening our balance sheet, our new business margin is well ahead of target and the value of new business jumped by more than a third in the second quarter alone,” said Dieter Wemmer.
In the first half year of 2017, operating profit increased to 2.3 (1.9) billion euros. Statutory premiums amounted to 33.6 billion euros, a growth of 2.0 percent. The new business margin for the first six months reflects the targeted shift toward capital-efficient products, bringing it to 3.3 (2.6) percent. As a result, the value of new business (VNB) increased by 29.9 percent to 922 million euros compared to the first half year of 2016.
“PIMCO saw 33 billion euros in net inflows across a broad customer base plus a single, 19 billion euro mandate. This brought PIMCO’s total third party net inflows to a record 52 billion euros for the quarter. PIMCO has become a performance engine again,” said Dieter Wemmer.
In the first half of 2017, operating revenues increased by 10.1 percent to 3.1 billion euros, mainly due to a large increase in average third-party assets under management. As operating expenses only went up 4.9 percent, the cost-income-ratio decreased by 3.2 percentage points to 62.9 percent. Furthermore, strong third-party net inflows and positive market effects outweighed negative foreign currency effects, resulting in 1,915 billion euros of total assets under management – an increase of 44 billion euros compared to year-end 2016.
Technical Note: Prior-year figures have been adjusted due to an updated operating profit definition and an accounting policy change, as already described in the first quarter of 2017.
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The Allianz Group is one of the world's leading insurers and asset managers with more than 86 million retail and corporate customers. Allianz customers benefit from a broad range of personal and corporate insurance services, ranging from property, life and health insurance to assistance services to credit insurance and global business insurance. Allianz is one of the world’s largest investors, managing over 650 billion euros on behalf of its insurance customers while our asset managers Allianz Global Investors and PIMCO manage an additional 1.3 trillion euros of third-party assets. Thanks to our systematic integration of ecological and social criteria in our business processes and investment decisions, we hold a leading position in the Dow Jones Sustainability Index. In 2016, over 140,000 employees in more than 70 countries achieved total revenue of 122 billion euros and an operating profit of 11 billion euros for the group.
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