Allianz Group once again increased its profitability in the first quarter of 2007. Total revenues amounted to 29.3 billion euros, thereby reaching the previous year’s level after adjustment for currency effects. The operating profit increased by 7.2 percent from 2.7 billion euros to around 2.9 billion euros. Quarterly net income exceeded 3.2 billion euros, representing 82.1 percent year-on-year increase. This performance was driven by realized gains from investments amounting to 2.0 billion euros as well as solid growth of operating profit. As a result of the claims costs from storm Kyrill totaling 340 million euros, the operating profit in the Property and Casualty business declined by 119 million euros compared to the previous year’s quarter. Operating profit of all other segments improved.
Allianz benefited from the excellent performance of the capital markets and realized gains of 2.0 billion euros from investments. The proceeds will mainly be dedicated to financing the AGF transaction.
Shareholders’ equity of Allianz Group increased by 3.6 percent to 52.3 billion euros from 50.5 billion euros as at December 31, 2006.
Strong start to the fiscal year
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Property and Casualty insurance business
Thanks to its clear focus on profitability and a consistent underwriting policy the Property and Casualty business posted another strong quarter. In spite of the claims burden due to the winter storm Kyrill amounting to 340 million euros, the operating profit fell by a mere 119 million euros or 8.6 percent to just under 1.3 billion euros. Gross premiums written, at 14.1 billion euros, were almost at the same level as for Q1 of 2006. At 96.8 percent, the combined ratio was only 2.1 percentage points above the previous year’s level, in spite of the burden due to natural catastrophes.
Life and Health insurance business
In Life and Health business operating profit increased by 3.7 percent from 723 million euros to 750 million euros. On the other hand, total premium income decreased, in line with expectations, by 3.9 percent to 12.3 billion euros. Besides a significant recovery in Italy, the US market also registered a first positive trend. "Developments at Allianz Life show that sales have bottomed out and premium slide has been brought to a halt. With a new management, new product lines and a strengthened distribution network we will be able to generate further growth in the future", explained Helmut Perlet, CFO of Allianz SE.
Banking business
Dresdner Bank lifted its operating revenues by 7.4 percent to over 2.0 billion euros compared with the strong first quarter of 2006. Here the key driver was net interest income, which increased by 55.7 percent to 900 million euros. This includes a one-off equity pick-up of 171 million euros from the sale of subsidiaries at an associated company. The operating profit rose by 28.0 percent from 529 million euros to 677 million euros. Ongoing efficiency improvements and a higher portfolio quality have paid off. In the traditionally strong first quarter the cost-income ratio improved from 73.7 to 66.9 percent.
Asset Management
In Asset Management, third party assets under management increased from 764 billion euros to 781 billion euros compared to previous year’s end. At 12 billion euros, net inflows were once more at a high level. Internal growth of third party assets under management amounted to 3.3 percent. The operating profit improved by 2.6 percent to 312 million euros. At 60.0 percent, the cost-income ratio was almost at previous year’s level.
"In view of the non-operating factors influencing the first quarter it would be a mistake to project the result for the first three months to the year as a whole. However, with this excellent start we have a firm footing to achieve our targets for 2007", said Helmut Perlet.
Cautionary Note Regarding Forward-Looking Statements
The statements contained herein may include statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements.
In addition to statements which are forward-looking by reason of context, the words "may", "will", "should", "expects", "plans", "intends", "anticipates", "believes", "estimates", "predicts", "potential", or "continue" and similar expressions identify forward-looking statements.
Actual results, performance or events may differ materially from those in such statements due to, without limitation, (i) general economic conditions, including in particular economic conditions in the Allianz Group's core business and core markets, (ii) performance of financial markets, including emerging markets, (iii) the frequency and severity of insured loss events, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) the extent of credit defaults, (vii) interest rate levels, (viii) currency exchange rates including the euro / US dollar exchange rate, (ix) changing levels of competition, (x) changes in laws and regulations, including monetary convergence and the European Monetary Union, (xi) changes in the policies of central banks and/or foreign governments, (xii) the impact of acquisitions, including related integration issues, (xiii) reorganization measures, and (xiv) general competitive factors, in each case on a local, regional, national and/or global basis. Many of these factors may be more likely to occur, or more pronounced, as a result of terrorist activities and their consequences.
The matters discussed herein may also be affected by risks and uncertainties described from time to time in Allianz SE’s filings with the US Securities and Exchange Commission. The company assumes no obligation to update any forward-looking statement.
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