Solid total premiums in recovering environment

Allianz in Central and Eastern Europe (CEE) reported solid results for 2010. Total premiums in CEE1 amounted 3.7 billion euros and remained on the same high level as in 2009. Adjusted for currency effects, premiums decreased by 3 percent. Operating profit in 2010 reached 119 million euros, which corresponds on a year-on-year basis to a 61 percent decrease.

"Our main priority is to protect our clients who rely on us. Last summer, we paid out more than 60 million euros to customers affected by floods and rain in CEE and responded with efficient and uncomplicated service, like advance payments to cover immediate expenses or the sending of emergency supplies to various catastrophe areas", commented Manuel Bauer, Member of the Board of Management of Allianz SE responsible for growth markets. "2010 proved to be a challenging year for Central and Eastern Europe. Several countries were affected by severe rain and floods such as Hungary, Poland, Slovakia and Czech Republic. In addition, the region had to adjust to unexpected political changes like the adjustment to the pension system in Hungary, which also affected our clients", added Manuel Bauer.

Manuel Bauer: "The region's growth path will continue"

In 2010 gross premiums written in the Property and Casualty business remained stable and reached 2.6 billion euros. Adjusted for currency effects, premiums from Property and Casualty insurance decreased by 4 percent.

Recovery of new car sales across the region, although still below the pre-crisis level, as well as a slight increase of demand for private retail insurance supported the top-line development.

Operating profit for the full year in CEE decreased by 76 percent and reached 56 million euros, compared to 231 million euros in 2009.
Natural catastrophes like heavy rains and floods, as well as the introduction of the crisis tax for financial institutions in Hungary, impacted operating profit. Furthermore an increase of VAT in Romania from 19 to 24 percent lead to an additional revaluation of claims reserves. In addition, a write-off of reinsurance receivables for 2009 on a large claim in Russia was a driver for the development of the operating profit in 2010.

Bruce Bowers, regional CEO of Allianz in CEE: "The Central and Eastern Europe region has great growth potential, and this naturally also concerns the insurance business. The crisis slowed down growth in the last years. But there is no doubt that business will again return to normal. The outlook for 2011 is positive as we expect economies in the region to grow by 3.7 percent on average".

In Slovakia, Allianz was voted again best insurer, and Allianz in Poland was named best Property-Casualty insurer in 2010. These awards are confirmation of Allianz's high quality and standards in CEE.

In 2010 the Life and Health business premiums in 2010 surpassed again 1.1 billion euros, which reflects an increase of 2 percent, compared to the same period in 2009. Adjusted for currency effects, premiums declined by 1 percent.

Revenues were supported by successful sales campaigns in Hungary, the Czech Republic and Poland. The focus of the campaigns was on traditional life products as well as single premium products. Also the new sales cooperations with bank partners showed first results, for example, in Russia, where premiums grew by 26 percent, compared to 2009.

Operating profit for 2010 reached 64 million euros, compared to 76 million euros in the previous year. This translates to a 16 percent decrease. Operating profit of 19 million euros in the fourth quarter remained stable compared to fourth quarter 2009. Drivers for the year-on-year decline in operating profit were the crisis tax for financial institutions in Hungary, which was introduced mid-2010, as well as an adjustment of the deferred acquisition cost in Slovakia.

"The Life/Health segment continues to grow. More and more people in CEE realize that they need to be financially prepared for retirement. We attract clients with new solutions but also as we are profitable and financially strong. This is the foundation for our customers and our other stakeholders", commented Bruce Bowers.

Allianz continued its success story in the Pension Fund and Asset Management business in CEE. By the end of December 2010, third-party assets under management had grown by 29 percent to 8.6 billion euros, compared to 6.7 billion euros at the end of 2009. This success is based on Allianz’s quality investment expertise as well as gains in market value in the capital markets.

For the second year in a row, Allianz in the Czech Republic was recognized with the prestigious award, "The Best Pension Fund of the Year 2010".

"From an economic point of view we are getting back to normal in all countries of the region this year. Even if growth may not be quite as steep as before the crisis, we conclude that the region's growth path will continue. We are aiming for growth of just above GDP across the board", commented Manuel Bauer.

1 Allianz is active in: Bulgaria, Croatia, Czech Republic, Hungary, Kazakhstan, Poland, Russia, Romania, Slovakia, Ukraine.

 
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