In the first half of 2011, Allianz remains on track for its retail insurance business in Asia Pacific. Gross written premiums in the first six months of 2011 amounted to 4 billion euros compared to 4.6 billion euros in the same period of last year. Operating profit was at 115 million in the first half of 2011, compared to 174 millions euros in the same period 2010.
On track in the first half year 2011, despite difficult market environment
Retail Life and Property & Casualty insurance business
Overall, operating profit was hit by one-off effects on the Property and Casualty business through regulatory induced reinforcements of loss reserves for commercial motor insurance in India, as well as technical reserves at the Life insurance operations in Taiwan and Korea. Excluding these one-off effects, the operating profit accounts for 178.2 million euros for the first half year of 2011, compared to 174 millions euros in the same period 2010.
"Overall, our retail insurance business in Asia Pacific is robust and demonstrated a stable performance despite various and very difficult market environments" commented Manuel Bauer, Member of the Board of Management of Allianz SE responsible for growth markets. "In 2010 we had seen exceptional growth that will not be repeated in this region this year."
With an expected GDP growth of over 7 percent in real terms for economies in the Asia Pacific region going forward, increasing wealth and the demographic development, many insurance markets in Asia Pacific indicate a rising demand for protection as well as provision and savings products. "We will further concentrate on our core business and on the growth potential that markets in South East Asia are offering," adds Manuel Bauer."
In Property and Casualty insurance (P&C) Allianz enjoys sustained growth by seizing more business opportunities and reinforcing its distribution network. A continued disciplined underwriting policy enabled an increase in total gross written premiums in the first half of 2011 by 10.2 percent to 565 million euros. Operating profit, excluding the one-off effects in 2011, increased to 55 million euros, compared to 35.2 million euros in the first half year 2010. Strongest contributor to growth was again India, followed by Malaysia and China. In the second quarter 2011, a strong increase in the commercial property business and continued strong volume in the Malaysian motor business were key drivers. P&C enhanced its profitable diversification into all levels of retail motor business and continues to build its distribution network beyond the main sales channel through agents.
Life Insurance business contributed 3.4 billion euros premiums in the first half of 2011, a decrease of 17 percent compared to the same period in 2010. To a large extent, this results from a negative market environment for Variable Annuities in Japan that affected the sales volume for these investment products. Gross written premium stayed below expectations, as lower premiums were generated from bancassurance channels. Operating profit, excluding one-off effects, decreased to 112 million euros in the first half year of 2011, from 139 million euros in the same period last year. In Taiwan, demand for savings products slowed down due to ceasing tax advantages for customers in 2011. In India, the market for Unit Linked life insurance products reacted to fundamental regulatory requirements in 2010 with an industry wide decrease in sales. On the other hand Indonesia and Thailand performed particularly well thanks to their successful multi distribution platform and their innovative products.
"It is important that we continue to listen to our customers and adapt to their needs for protection and provision," commented Kamesh Goyal, CEO of Allianz Asia Pacific. "Allianz can leverage on its international experience to constantly develop new suitable products. We ask for feedback from thousands of our customers every year, to establish the right service and channels to reach out to them.
Allianz serves over 20 million retail customers in Asia Pacific, which increased by 2.4 percent in the first half year of 2011 (over FY 2010) and this positive trend continues throughout the region. With this development, today more than 25 percent of Allianz Group customers are from the Asia Pacific region.
Kamesh Goyal: "It is important that we continue to listen to our customers and adapt to their needs for protection and provision"
Global Lines in Asia Pacific: Corporate & Specialty Insurance
Allianz' global line for Corporate & Specialty Insurance business (AGCS) played an important role in supporting their international customers affected by natural catastrophes in the first half 2011. From the reported 910 million euros that Allianz Group paid to customers for claims on natural catastrophes, AGCS bears about 150 million Euros. Two thirds of the natural catastrophes events took place in the Asia Pacific region.
Lutz Fullgraf, CEO AGCS Asia Pacific, stressed that the insurance industry plays an important role when it comes to those affected by natural catastrophes by helping customers maintain their cash flow so they can stay in business and resume operational activity." These events are what we're here for," he said, adding: "The unsustainable current soft market conditions, have placed pressure on top-line and bottom-line targets, but nonewithstanding our natural catastrophe exposures, AGCS Asia Pacific remains on track with its planned targets and continues to register healthy growth."
Reinsurance
The first half year of 2011 with its frequent and severe natural catastrophes in Australia, New Zealand and Japan was a challenge for Allianz Reinsurance and the re-insurance industry in Asia. Whilst the trace of the events is clearly visible in our results, there was no impact on our excellent capital base.
About 14 percent of Allianz Re's net earned premium continues to be generated from countries in Asia. Through the regional hub in Singapore, Allianz Re continues to be a committed reinsurer in Asia with excellent technical expertise and financial strength, servicing over 110 major clients across the Asia Pacific region.
Allianz Re was awarded Asia's General Reinsurer of the Year in 2009 and 2010 by the Asia Insurance Review. This accolade is recognition of our long term commitment, client focus strategy, consistent sound technical advice and tailor-made solutions.
Asset Management
Allianz Global Investors Asia Pacific continued to enjoy positive net inflows of 1.2 billion euros during the first half of 2011. While this is behind the efforts of the previous years, it has been achieved despite the difficult global and local markets. Operating earnings grew by 43 percent in the first six months of the year, reaching 14.3 million euros, with notable results in Hong Kong, South Korea and Taiwan.
"Our business is built upon global investment expertise supported by outstanding local client service," commented Douglas Eu, CEO of AllianzGI Asia Pacific. "We have consistently pursued this strategy over the years and are pleased with the success, as evidenced by the delivery of such strong results."
Most of Allianz' insurance markets are served by local Allianz companies, while selected business lines are run globally: Figures for retail insurance business comprise all Allianz entities of the Asia Pacific Region, including India, which is not consolidated under IFRS. Allianz Asia Pacific consists of entities in China, India, Indonesia, Japan, Laos, Malaysia, South Korea, Sri Lanka, Taiwan and Thailand.
Growth figures are internal growth, i.e. adjusted for F/X effects and consolidation effects.
Allianz Global Corporate & Specialty Insurance, Allianz Reinsurance and Allianz Global Investors are global lines.
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