Allianz in Central and Eastern Europe (CEE) today reported its results for the first six months of 2010. Total premiums in CEE1 increased by 5 percent to 2.0 billion euros, from 1.9 billion euros in the first half of 2009. When adjusted for currency effects, premiums dropped by 1 percent. Operating profit in the first half year amounted to 100 million euros, corresponding to a 37 percent decrease compared to the first six months of 2009. On an adjusted basis, operating profit dropped by 39 percent.
First half year 2010 premiums remain stable
While the Life and Health business continued to grow, Property and Casualty insurance was impacted by weather-related losses during the second quarter, especially in Bulgaria, the Czech Republic, Hungary, Poland, Romania and Slovakia.
"Not only flooding, but also thunderstorms and prolonged rain showers plagued the region during the second quarter. I am very proud of my colleagues in the affected countries, who handled the claims of our customers both efficiently and with great service. Besides advance payments to cover immediate expenses or the sending of emergency supplies to various catastrophe areas, our services also included special teams who were dispatched to pre-identified policyholders based on claims predictions and weather forecasts. This was done even before our customers contacted us," said Werner Zedelius, Member of the Board of Management of Allianz SE responsible for growth markets.
Werner Zedelius: "I am very proud of my colleagues who handled the claims of our customers with great service"
Property and Casualty Insurance
In the Property and Casualty business, gross premiums written in CEE increased by 1 percent to 1.39 billion euros in the first half of 2010, compared to 1.38 billion euros in the respective period of 2009. Adjusted for currency effects, premiums from Property and Casualty insurance dropped by 5 percent.
Operating profit decreased by 54 percent in the first half year to 56 million euros. Adjusted for currency effects, the decrease amounted to 56 percent.
Besides weather-related losses in the region, the continuing decline of new car sales across the region, resulting in a further shrinking new business volume in motor, further impacts the results. Furthermore an increase of VAT in Romania from 19 to 24 percent lead to an additional revaluation of claims reserves.
In the countries affected by floods, storm and rain, Allianz recorded more than 91,000 claims in Q2 alone. Clients who were evacuated from their homes were offered immediate financial support to cover extra expenses. In addition to advance payments, the claims settlement procedure was enhanced. As one of several special services for our clients affected by the weather, Allianz in Hungary sent customers an SMS as soon as funds were transferred to their bank accounts.
Life and Health Insurance
Premiums in the Life and Health business in CEE increased by 18 percent in the first six months of 2010 to 607 million euros, compared to 514 million euros in the same period of 2009. Adjusted for currency effects, premiums increased by 11 percent. Half-yearly operating profit grew to 45 million euros, compared to 38 million euros in the first half of 2009. This translates to an 18 percent increase, or internal growth of 14 percent.
One of the drivers of the positive development throughout the first six months of the year was the stable demand for traditional life products accompanied by successful sales campaigns for single premium products in countries such as the Czech Republic and Hungary.
The Life and Health business saw some more remarkable positive developments. Allianz in Croatia achieved the market leader position based on revenues. Owing to successful sales channels diversification and significant corporate sales growth Allianz ROSNO Life recorded, on basis of adjusted currency effects, premium growth of 51 percent and aims for the top five position in the Russian market.
Manuel Bauer, regional CEO of Allianz in CEE: "Our Life/Health segment performed well during the first half of 2010. Our product offerings are broad, competitive and transparent and the life insurance penetration in the region is still quite low. In addition, the ageing of the population across the region will create a huge demand for private old-age provision across all age groups. Therefore I am confident that we will maintain our growth momentum in this segment."
Manuel Bauer: "Our Life/Health segment performed well during the first half of 2010"
Pension Fund and Asset Management
In the Pension Fund and Asset Management business, Allianz in CEE continues on its path of growth and remains at the forefront of the business. At the end of the second quarter of 2010, third-party assets under management had grown by 9.5 percent to 7.3 billion euros, compared to 6.7 billion euros at the end of 2009. Drivers for this development were the recovery of the capital markets in the region and continuing net inflows.
According to European statistics office Eurostat, the number of people approaching or entering retirement in CEE in 2011 will be around 142,000 higher than the number of school-leavers looking for work. As the baby boomer generation makes its transition into retirement, this "gap" is set to steadily widen over the next few years, rising to 2 million by 2018. "According to this development, it is crucial that the pension fund systems remain stable and reliable in the region and provide a solid contribution to old age provision," commented Manuel Bauer.
1 Allianz is active in: Bulgaria, Croatia, Czech Republic, Hungary, Kazakhstan, Poland, Russia, Romania, Slovakia, Slovenia, Ukraine.
As with all content published on this site, these statements are subject to our Forward Looking Statement disclaimer.
Link to the disclaimer