Revenues and operating profit rise substantially

In the first half of 2010, Allianz Deutschland AG increased revenues 6 percent, to 15.2 billion euros (14.3 billion euros), and thus continued its growth trend from the previous year. Life insurance especially saw another substantial rise in premium income. Said Markus Riess, CEO of Allianz Deutschland AG since July 1, 2010: "These figures reflect how much people trust Allianz's financial strength."

In life insurance, premium income increased 14.3 percent from the same period last year, to 7.9 billion euros (6.9 billion euros). The growth came from a substantial rise in one-time premiums; most notably, premium volume more than doubled in classic capital-forming pension and life insurance. Clients also showed a continuing strong demand for the IndexSelect protection concept.

In property and casualty insurance, premium income decreased as expected, by 3.0 percent, to 5.5 billion euros (5.7 billion euros). The principle remains the same: profitability ahead of revenues – especially in automotive insurance, where the Company's business has been systematically put back on a sounder footing. Premium income in automotive insurance was down 5.5 percent, to 2.2 billion euros (2.3 billion euros). Premium income in the other insurance lines declined a total of 1.5 percent, to 3.3 billion euros (3.4 billion euros).   

In health insurance, premium income was up 1.2 percent, to 1.6 billion euros (1.6 billion euros), primarily because of necessary premium adjustments as a result of higher costs in the healthcare system.

Operating income in the banking business (OLB Regional Bank and Allianz Bank) increased 24.3 percent in the first half, to 162 million euros (130 million euros), thanks to higher net interest income and higher net commission income. The growth in commission income resulted primarily from the first full-year inclusion of the figures for Allianz Bank.

Numerous storms, including Hurricane Xynthia and the Whitsun storm, pushed up the full-year loss expense figure in property and casualty insurance during the first half. The difference between loss provisions and loss expenses improved. On the cost side, there was a positive impact from the savings resulting from the reorganization of our German insurance business. All in all, the combined loss and loss expense ratio decreased to 100.1 percent (100.6 percent).

Thanks to its investment policy that focuses on the long term, Allianz not only weathered the financial crisis quite well, but is now profiting from the growth in the bond and stock markets. Since hardly any write-downs of securities were necessary compared to the same period last year, the net investment income in the insurance business grew 35.5 percent in the first half of 2010, to 4.7 billion euros (3.4 billion euros). Invested assets (not including receivables from banks and customers in the banking business) increased 4.7 percent, to 196.0 billion euros (187.3 billion euros at December 31, 2009).

Not least of all, strong net investment income also contributed to an increase in operating profit, which grew 41.9 percent, to 916 million euros (646 million euros). The profit for the half increased 24.8 percent, to 650 million euros (521 million euros).

Thanks to good business performance in the first half of 2010, the Company also expects that revenue will grow for the full year. Life insurance especially, as a reliable form of providing for retirement, is likely to remain attractive to customers in the future.

But the market environment in property and casualty insurance, especially in automotive insurance, remains difficult. The Company does not foresee a turnaround here yet.

In the first six weeks of the third quarter there were a number of additional exceptional losses due to weather. Storms and hailstorms in July led to a loss expense on the order of 65 million euros. The charge for claims from the floods in Saxony and Brandenburg in early August cannot be reliably estimated for another few days, until the water has receded and it is possible to get an overview of the scope of the damage.

The flooding affected several tens of thousands of clients. Agents on location are on the road around the clock, supporting their clients in this difficult situation. They are inspecting and recording damage, and where possible are already producing preliminary cost estimates. To get benefits to the victims as quickly and with as little red tape as possible, the Company is also bringing in additional claims adjusters from all over the country to the flooded region. It has added staff as well to its in-house telephone service. The Allianz Handwerker-Service, through its local contractors, is supporting clients in drying out and repairing buildings.

Health insurance is currently working on a recalculation of the AktiMed series of rate plans, since the Federal Administrative Court has ruled that policyholders who change rate plans cannot be charged a plan structure surcharge. The new rates are expected to become available in October.

Growth in the banking business (OLB Regional Bank and Allianz Bank) is likely to continue. Additionally, Allianz expects its new specialized agency sales concept to yield a further improvement in the quality of the advice it provides. 

Commerzbank will start selling Allianz insurance products in September. "We expect further growth impetus in our insurance business from this sales cooperation," said Riess. 

 
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