Revenues and earnings rise substantially

In life insurance, premium income gained 6.1 percent, to reach 16.0 billion euros. The largest share of revenues, at 9.1 billion euros (+0.8 percent) once again came from recurring premiums. Non-recurring premiums increased a substantial 13.8 percent, to 6.9 billion euros. In new business with one-time premiums, the company substantially expanded its sales of classic retirement and life insurance. Another factor that contributed significantly toward the growth of the one-time premium business was the sales cooperation arrangement with Commerzbank, which started up in September. In September through December, new life insurance business grew more than 90 percent compared to the previous year's figure from Dresdner Bank. In contrast to its competition, Allianz Deutschland also increased new recurring premiums in life insurance (+2.1 percent). The main growth drivers were the IndexSelect product innovation and classic retirement insurance.

Premium income in property and casualty insurance decreased 2.4 percent from the year before, to 9.0 billion euros, primarily because of changes in car insurance. Premiums in car insurance decreased because of ongoing heavy price pressure, an ongoing reconstruction of the commercial fleet business, and disappointing results in customer-recruiting for 2009. The annual reclassification of customers to lower-premium accident-free categories also reduced premiums.

But Allianz Deutschland also saw successes in the car business: "Our customer-recruiting efforts went significantly better in 2010 than in previous years," Rieß explained. A three-level sales approach made a major contribution here, made up of the classic product range, sold through agents; the Allianz Auto Online Service (AAOS) Internet car rate plan, which offers personal service from an agent in addition to the typical features of an Internet rate plan; and a purely online rate plan, through direct provider AllSecur. At the end of 2010, AAOS had 110,000 policies (prior year: 16,000) and AllSecur had 276,000 policies (prior year: 222,000). Thus a total of 385,000 clients were signed up for an Allianz Internet automotive rate plan. In car insurance, Allianz Deutschland had 8,164 million policies as of December 31, 2010, with 14,305 million numbers of contracts and premium income of more than 3.133 billion euros.

Premium income in health insurance grew slightly, by 1.0 percent, to 3.2 billion euros. This growth resulted primarily from premium adjustments. Additionally, the number of terminations of full-coverage insurance decreased compared to the year before. Revenue performance also includes the refunds of the Tarifstrukturzuschlag (TSZ) rate plan structure surcharge that had been charged until mid-2010. In June, the Federal Administrative Court decided that TSZ surcharge could be charged when existing clients changed to the AktiMed® rate series. The total refund was in the mid-single-digit millions.

In the banking business², the operating profit grew 21.9 percent, to 346 million euros. Net interest income grew to 238 million euros (+15.5 percent). Major contributors here were organic growth in the lending business of OLB Regionalbank, lower refinancing costs, and better margins. Net commission income increased 45.9 percent, to 109 million euros. The Allianz Bank business continued to perform well in its first full fiscal year. Since the beginning of 2010, Allianz Bank has served not only its own clients, but an additional 242,000 clients who hold a fund deposit with Allianz Global Investors (AGI), who were won over by Allianz agents. Thus the total number of Allianz Bank clients has grown 279,000 since its founding, to 690,000. Business volume grew 73.1 percent, to about 5.3 billion euros.

In fiscal 2010, large losses from weather events resulted in substantially higher charges than the year before. These increased the loss and loss expense ratio, which in property and casualty insurance reflects the ratio of costs and loss expenses to premiums earned. It rose from 98.7 percent to 100.8 percent.

In spite of these large charges for weather losses, Allianz Deutschland's operating profit grew substantially, by 22.4 percent, to 1.8 billion euros. Significantly higher investment income and ongoing discipline on costs had a positive impact. Moreover, there were no further expenses to set up Allianz Bank, which had pulled down profits the year before. The net profit after taxes grew 32.0 percent, to 1.3 billion euros.

Last year, Allianz companies benefited from the ongoing recovery of the stock and bond markets. The upswing in the capital markets increased the valuation reserves in the insurance business by 10.2 percent, to 13.9 billion euros. Net investment income improved 19.7 percent from 2009, to 9.3 billion euros. Invested assets grew 6.2 percent, to 209.4 billion euros. Equity increased 5.7 percent, to 12.6 billion euros.

With an eye to the latest crisis in the financial market, Rieß noted: "Our customers trust in Allianz's financial strength. Our ability to come through well even in rougher times is a core competitive argument for us as a long-term partner."

In property and casualty insurance, Allianz Deutschland expects to attract more new business in 2011, which will then fully show up in revenues in 2012. To sustainably improve its position in the private auto business and improve its profitability, starting in May the company will reposition itself with a competitive, modular product concept in its agent business. "We will be offering clients a product precisely tailored to their needs", Rieß said.

In life insurance for recurring premiums, the company expects substantial growth in both the private and corporate business. But Rieß added a qualification: "In non-recurring premiums, it's unclear whether we can maintain the same level after the unusually large increases of the past few years."

Allianz Deutschland expects premium income in private health insurance to remain roughly the same in 2011. Here the former three-year waiting period for employees who are above the mandatory insurance ceiling and still covered by the public health insurance system, but want to transfer to private insurance, will be eliminated. "That's an opportunity to sell full-coverage insurance that we can gradually take advantage of," said Rieß.

In the banking business, the company expects moderate growth in business volume. Allianz Bank is expected to grow its lending and securities business further. Rising operating income, combined with roughly constant expenses, will increase operating profits further, which Allianz Deutschland expects to enable the banking business to break even in 2011 and show its first profit in 2012.

The operating profit of Allianz Deutschland and its net profit after taxes for 2011 should be higher than for the past fiscal year.

Allianz Deutschland plans to focus its operations even more consistently on clients and their needs. The CEO announced that starting in April, agency representatives will make a personal service and performance commitment based on the company's performance – which will also include claims handling. He said, "we're offering a clear guarantee – if we haven‘t settled a collision claim within five days after all the documentation is available, the client will get 30 euros. Without asking for it."

At the same time, Allianz Deutschland is also counting on further expanding its use of today's media and innovative applications for the Internet. In the second half, "Meine Allianz" will offer clients a new, digital interactive platform embedded at agents' websites. That will offer a full survey of an individual's financial and insurance status, and make it easier to communicate with Allianz.

 
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