ALLIANZ, 1Q2019: Operating profit close to EUR 3.0 billion
Key figures (compared to 1Q2018):
- Total revenues: EUR 40.3 billion (+9.1%), of which:
- P&C: EUR 19.5 billion (+6.3%)
- L&H: EUR 19.3 billion (+12.9%)
- Asset Management: EUR 1.6 billion (+1.0%)
- Operating profit: EUR 2,962 million (+7.5%), of which:
- P&C profit: EUR 1,455 million (+14.2%)
- L&H profit: EUR 1,096 million (+2.5%)
- Asset Management profit: EUR 573 million (-3.7%)
- Net income: EUR 2,051 million (+1.0%)
- Return on equity: 13.7% (+0.5 pp.)
- P&C Combined ratio: 93.7% (-1.1 pp.)
- L&H New business margin: 3.5% (+0.2 pp.)
- Asset Management cost-income ratio: 63.7% (+1.8 pp.)
- Solvency II capitalization ratio: 218% (-11.0 pp.)
Internal revenue growth was 7.5 percent and total revenues grew by 9.1 percent to EUR 40.3 billion. Operating profit increased by 7.5 percent to 3.0 (2.8) billion euros, mostly due to Property-Casualty business segment.
Property and Casualty (P&C) revenues increased by 6.3 percent to EUR 19.5 billion in the first quarter of 2019. Operating profit increased by 14.2 percent to EUR 1.455 billion euros, primarily due to premium growth in combination with fewer losses from natural catastrophes, improvements in expense ratio and the operating investment result. The combined ratio improved by 1.1 percentage points to 93.7 percent.
Life/Health present value of new business premiums, increased to EUR 17.6 billion in the first quarter of 2019, mainly driven by higher sales in the German and U.S. life insurance business. Allianz registered a higher new-business margin of 3.5% (compared to 3.3% in 1Q2018), the value of new business (VNB) increased by 25 percent to EUR 609 million. Operating profit grew slightly to EUR 1.096 billion.
Third-party assets under management (AuM) increased by EUR 112 billion to EUR 1,548 billion in the first quarter of 2019, compared to December 31, 2018, reaching an all-time high. The drivers were positive market effects of EUR 60.9 billion and solid net inflows of EUR 17.8 billion. Total assets under management rose to EUR 2,101 billion, also reaching an all-time high.
The Solvency II capitalization ratio stood at a comfortable level of 218 percent at the end of the first quarter 2019, compared to 229 percent at year-end 2018, driven primarily by the effects of the current share buy-back program (minus 4 percentage points) and following previously announced regulatory and model changes (minus 4 percentage points).
Basic Earnings per Share (EPS) increased 4.5 percent to 4.65 (4.46) euros. Annualized Return on Equity (RoE) amounted to 13.7 percent (full year 2018: 13.2 percent). Net income attributable to shareholders grew 1.6 percent to 2.0 (1.9) billion euros. Higher operating profit was largely offset by lower non-operating investment income and, to a lesser extent, higher taxes.
"Allianz achieved strong results in the first quarter putting the group on track to meet its 2019 full-year targets. (...) Our customers continue to seek quality and service, both of which we are consistently focusing on. Despite economic and political volatility, we are very well positioned to further develop our franchise."
"I am pleased by the healthy revenue growth of the Property-Casualty business segment in the quarter, which reflects the good positioning of our global franchise. (...) The strong combined ratio is well supported by our ongoing efforts to improve productivity.
Growth in our Life and Health business was excellent and with continued strong new business margins. (...) Increasing value of new business and operating profit show that we are on track to meet our full-year targets.
Our Asset Management business segment has shown good resilience also underpinned by our positive net inflow development. (...) I am pleased that total assets under management reached the highest level ever at the end of the quarter since this bodes well for a strong revenue development."