Allianz Group delivered 10.8 billion euros in operating profit in 2016, near the upper end of its target range and the fifth consecutive increase in annual operating results. Net income attributable to shareholders rose 4.0 percent compared to 2015, leading Allianz to raise its dividend further to 7.60 euros. Allianz will also launch a 12-month share buy-back plan worth up to 3 billion euros, representing around 4.2 percent of its share capital. Allianz, Europe’s largest insurer by market value, saw further progress in implementing its Renewal Agenda in 2016, putting the company well on track to achieve its 2018 targets.
The Life and Health segment saw the strongest rise in operating profit – up 9.3 percent to 4.1 billion euros – with rising investment results as the key driver. The new business margin rose to 2.7 percent in 2016 compared to 2.2 percent in 2015, demonstrating Allianz’s ability to implement strategic changes swiftly and profitably in response to the low interest rate environment.
The Property and Casualty segment saw operating result ease 4.2 percent in the year mainly due to weaker investment results, even as its underwriting performance improved. The segment’s combined ratio, which measures underwriting profitability, improved 0.3 percentage points to 94.3 percent due in part to lower claims from natural catastrophes.
The Asset Management segment marked an important milestone as PIMCO generated two consecutive quarters of third-party net inflows in the second half of 2016. A 6.1 percent increase of total assets under management (AuM) to 1,871 billion euros at year-end was mainly due to positive market effects. A decline in AuM driven fees and performance fees, however, led to a 4.0 percent decrease in operating profit. Cost discipline led to an improvement in the cost-income ratio to 63.4 percent from 64.5 percent for the segment.
“Allianz had a great year in 2016, with efforts invested in our Renewal Agenda starting to bear fruit. All segments delivered well, thanks to the engagement of our excellent people, and our robust capital base puts us in a position of strength,” Oliver Bäte, Chief Executive Officer of Allianz SE, said.
“The year was filled with surprises, not all of them welcome, that challenged many assumptions, fueled geopolitical uncertainty and market volatility, and that make 2017 difficult to predict. Nevertheless, we feel confident enough to raise our operating profit target range. The group aims to achieve an operating result of 10.8 billion euros, plus or minus 500 million euros, in 2017, barring unforeseen events, crises or natural catastrophes,” Oliver Bäte stated.