Property and Casualty segment grows operating profit despite natural catastrophes
Gross premiums written in Property and Casualty insurance reached 10.7 billion euros in the third quarter, 6.5 percent below the previous year’s figure of 11.4 billion euros. The decline stems mainly from the reduction of crop business in the US. Unfavorable foreign exchange effects also added to this development. At the same time, premiums grew significantly in Central and Eastern Europe as well as for the industrial insurer Allianz Global Corporate & Specialty (AGCS). Acquisitions in France and Belgium as well as in Turkey also added to revenues.
Operating profit increased 6.4 percent to more than 1.2 billion euros in the third quarter of 2013 from just under 1.2 billion euros, especially due to positive developments in Italy, in the US and at AGCS. The underwriting result rose to 501 million euros from 351 million euros.
The combined ratio improved during the reporting period by 1.4 percentage points to 94.8 percent from 96.2 percent in the third quarter of 2012. Natural catastrophes, especially storms in Germany and Ireland in July and August, added 4.3 percentage points to the combined ratio. The net impact amounted to a total of 464 million euros. The combined ratio benefited from a better underlying loss development.
“This is the second quarter in a row that saw major natural catastrophes. And yet, we were able to increase profits. After the first nine months in 2013, the Property and Casualty business is very much on track,” said Dieter Wemmer, CFO of Allianz SE.
Revenues increase in Life and Health insurance
Statutory premiums in Life and Health insurance rose in the third quarter to 12.7 billion euros from 11.9 billion euros. This represents an increase of 6.6 percent from the previous year’s third quarter. Demand was especially healthy in Germany and Italy.
Operating profit was 769 million euros, a decrease of 5.6 percent from 815 million euros for the same quarter the year before. A lower investment result in Germany and investment de-risking in Italy were the largest drivers for this development. At the same time, operating profit grew in France, Spain and the US.
The new business margin increased to 2.3 percent in the third quarter of 2013 from 1.6 percent for the same period in the previous year. The value of new business increased by 44.3 percent to 215 million euros from 149 million euros.
“Growth in revenues and new business margin in the third quarter makes me confident about our Life and Health insurance segment,” said Dieter Wemmer. “Our products clearly remain appealing to our customers. This is not least because we combine attractive returns with high security in the ongoing low interest rate environment.”
Asset Management achieves good results in difficult markets
Developments in Asset Management in the third quarter reflected capital market volatility. Operating revenues reached 1.7 billion euros. They were thus 7.7 percent below the previous year’s level of 1.8 billion euros. Lower performance fees and negative foreign currency effects contributed to this development.
Operating profit fell 11.1 percent to 754 million euros from 848 million euros. The cost-income ratio was 55.7 percent, compared to 54.0 percent in the third quarter of 2012.
On September 30, 2013, total assets under management were 1,811 billion euros, 2.2 percent lower than 1,852 billion euros at the end of 2012. At the end of the third quarter, third-party assets under management amounted to 1,404 billion euros, compared to 1,438 billion euros at the end of the year. The development in assets under management mainly reflects the impact of a weaker US dollar.
The third quarter saw third-party net outflows of 26.7 billion euros, compared to net inflows of 31.5 billion euros in the previous year’s third quarter. Outflows came mainly from traditional fixed-income products. Overall, however, third-party net inflows for the first nine months amounted to 22.8 billion euros.
“Our Asset Management business produced good results under difficult conditions. This shows the importance of our broad geographic presence and product diversification,” said Dieter Wemmer.