Net profit up: Allianz does surprisingly well thanks to Corona summer – share increases | Message

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However, the board of directors has not made a new earnings forecast for the current year. For example, CFO Giulio Terzariol expects further insurance losses due to new lockdowns in many countries, such as through restaurant closures. He also thinks that new turmoil on the financial markets is conceivable. But his concerns are not too great, he said in a conference call with reporters on Friday: “The second wave won’t hit us like it did in the first quarter.”

Allianz boss Oliver Bäte had withdrawn his original plan to reach an operating profit of between 11.5 and 12.5 billion euros this year at the end of April. Analysts had recently expected a whopping 10 billion euros. This accords with the fact that Allianz achieved operating income of just under € 7.8 billion in the first nine months, nearly 15% less than the previous year.

Terzariol also was unable to elicit an approximate prognosis. However, Allianz shareholders should not worry about the dividend for 2020. As for 2019, Allianz is expected to distribute € 9.60 per share to shareholders. The buy-back program, which has already been suspended, will however be definitively terminated.

Industry experts were consistently positively surprised by the quarterly data. JPMorgan analyst Ashik Musaddi found that Allianz is halting stock repurchases due to the second wave of pandemics.

In the third quarter, despite the crisis, Allianz earned 2.1 billion euros, about 6% more than the previous year. This was also due to good business with capital investments. Additionally, all business areas fared better than analysts expected. The group’s operating profit fell nearly 3% to 2.9 billion euros, but it also exceeded the expectations of industry experts. This is also because the Corona crisis weighed on the result by only about 100 million euros.

In the first nine months, however, the consequences of the pandemic hit Allianz with a total of 1.3 billion euros. Of these, approximately 900 million euros were represented by insurance claims, as detailed by the CFO Terzariol. The rest of the burden came from the koruna-related turmoil in financial markets.

Although the pandemic had little impact on Allianz’s profits in the summer months, the group clearly felt the reluctance of its customers. In Germany, the industry leader sold new life insurance policies with a new commercial value of € 117 million in the third quarter, down almost 39% from the previous year. In the United States and also in Italy the declines were equally high. There was only one advantage in the Asia-Pacific region.

Overall, Allianz’s premium income in the life / health division decreased by 9.4 percent to € 16.8 billion. Last year, however, the life insurance business did particularly well, Terzariol said. He is confident Allianz will see good figures here again in the future.

As a result, Allianz had to accept a 6% drop in sales across the group in the third quarter. However, the life and health insurance sector was the only one that was able to increase its operating profit, i.e. by around three percent to a whopping 1.1 billion euros.

In the largest division, real estate and casualty business, operating profit fell a good two percent to 1.3 billion euros. However, Allianz had experienced a much more marked decline in the first half of the year. Although insurance claims following the pandemic also negatively impacted the division during the summer, the insurer also had to settle fewer natural disaster claims.

Meanwhile, the alliance is trying to protect itself with new contractual clauses from having to be financially responsible for widespread business closure. “Either the policies have already been changed or they are still being changed,” Terzariol said. Since October, Allianz has been offering its customers new contracts. If you disagree, ongoing contracts will be terminated at the end of the term. According to Terzariol, other insurers are doing a similar thing. The future blocks would therefore have affected the sector much less severely than the first of this year.

The reason for the change is the numerous lawsuits against insurers following the closure of hotels and restaurants during the Corona crisis. Allianz alone is currently dealing with some 140 disputes of this type. It doesn’t consider covered cases, plaintiffs see it differently. In court, the terms of the insurance have sometimes been criticized as too unclear, not just to Allianz.

Meanwhile, things went well for the investment funds of the subsidiary Allianz Pimco. The California-based company raised a whopping 27 billion euros in fresh cash from investors in the third quarter. On the other hand, investors withdrew € 1.5 billion net from the second affiliate fund Allianz Global Investors (AGI). Despite the high overall inflow of funds, the operating profit of the entire business of the Allianz funds decreased by almost 4% to 677 million euros. Allianz explained this, among other things, with lower performance-related fees.

Given the latest results, Bäte said he was “confident that the Covid 19 crisis can be tackled well”. Due to the economic uncertainties surrounding the pandemic, however, the Board of Directors is currently pooling the Group’s money and halting the already pending share buyback. In fact, Allianz had wanted to give back 750 million euros to shareholders in this way.

At the peak of the day, the share rose to 171.80 euros. Finally, Allianz stock closed XETRA trading on Friday, with a 0.67% rise to EUR 168.06.

FRANKFURT (dpa-AFX)

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