Today, Allianz in Central and Eastern Europe reported solid results for the first quarter of 2011 despite a still challenging business environment in the region. Total premiums amounted to 1.057 billion euros compared to 1.115 billion euros in the first quarter of last year. The decline of 5 percent on an internal basis is mostly attributable to the Life/Health business, which last year benefitted from one-off effects in several markets.
Solid results in Q1 2011
In the first three months of the year, Allianz attracted more than 100,000 new customers now serving as many as 7.5 million clients in Central and Eastern Europe. Since the first quarter of last year, Allianz grew its customer base by even more than 5 percent. This underlines more and more people see Allianz as a trustworthy partner for protection against risk, for old-age provision and for asset management.
Operating profit remains almost on last year's level with 65 million euros, despite rising burdens through additional crisis tax regimes in several markets.
"The development of our companies in the first quarter is in line with our expectations. We see markets in the region slowly stabilizing after the financial crisis and customers looking for a reliable and solid partner. That's what we stand for, and we see it affirmed by our continuously growing customer base," commented Manuel Bauer, Member of the Board of Management of Allianz SE responsible for growth markets.
Manuel Bauer: "The development of our companies in the first quarter is in line with our expectations"
Property and Casualty Insurance
In Central and Eastern Europe, gross premiums written in the Property and Casualty insurance business amounted to 774 million euros in the first quarter of 2011, compared to 782 million euros in the respective quarter of 2010. Adjusted for currency effects, premiums from Property and Casualty insurance declined by 1.0 percent.
The slight decline in gross premiums was influenced especially by the still fierce competition in the motor markets resulting in a further drop of average premiums, especially in Hungary and Romania. Allianz subsidiaries in the Czech Republic, Poland and Russia managed to grow their overall Non Life business, with especially the Polish and Russian entities continuing their growth momentum from the fourth quarter of 2010.
With 46 million euros operating profit for the first three months of 2011 increased by 1.5 percent compared to the respective quarter of 2010. This result already includes the impact of the special tax burdens.
The combined ratio across the region improved to 95.6 percent in the first quarter of 2011 from 96.0 percent in the same period of 2010. "The positive development in the combined ratio shows that the initiatives implemented gain traction. Our strict underwriting discipline is leading to improved results, which is a sign for our customers that they can rely on a stable partner in market conditions that are still difficult." commented Bruce Bowers, regional CEO of Allianz in Central and Eastern Europe.
Life and Health Insurance
Premiums in the Life and Health business in Central and Eastern Europe declined by 15.1 percent in the first three months of 2011 and reached 283 million euros, compared to 333 million euros in the same period of 2010. Compared to the fourth quarter of 2010, the Life and Health business in the first quarter even grew by 25 percent.
This development was mainly driven by the entities in Poland and Hungary. In Poland, slightly higher unit-linked sales could only partially offset a drop in premiums from payment protection insurance and life deposit products. In Hungary, single premiums from investment-oriented products decreased significantly compared to last year's first quarter. This development is due to the postponement of an annual first quarter awareness campaign on old age provision which has been very successful in the past and will take place later this year.
Quarterly operating profit declined by 7 percent and amounted to 20 million euros, compared to 21 million euros in the first quarter of 2010.
Bruce Bowers: "The drive from the fourth quarter in 2010 continued in the first quarter 2011 and showed there is a clear need from customers. I am confident about the long-term trend in this business based on the awareness of aging societies and the need of old age provision, something not all welfare systems can guarantee at the current level."
Bruce Bowers: "Improved results show our customers that they can rely on a stable partner in market conditions that are still difficult"
Pension Fund and Asset Management
In the first quarter of 2011 the Allianz Pension Fund and Asset Management operations in Central and Eastern Europe have maintained their growth momentum. Assets under management increased to 9.1 billion euros at the end of March 2011, based on growth in all individual markets. The total increase of about 605 million euros represents an increase of 7 percent compared to the volumes at the end of 2010. Third-party assets grew by 6 percent in Pension Funds and by 18 percent in asset management operations, with net cash inflows being the strongest driver in both segments.
The number of pension client relationships at the end of the first quarter of 2011 was approximately 4.2 million clients compared to 4.7 million clients as of the end of 2010, hampered by a one-time effect from regulatory changes in Hungary, where the private, funded mandatory business was mostly transferred to the state.
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