info@businessghana.com
Group affirms full-year outlook
2Q 2023:
6M 2023:
Outlook:
Other:
Note: The financial results are based on the new IFRS 9 (Financial Instruments) and IFRS 17 (Insurance Contracts) accounting standards, which have been adopted as of January 1, 2023. Comparative periods have been adjusted to reflect the application of these new accounting standards.
"Allianz's excellent results in the first half of 2023 demonstrate the strength of our fundamentals as we capitalize on our global scale and diversified business mix for the benefit of our customers and our shareholders. With our double-digit growth in profits we are well on track to achieving our Group targets for the year.
I am particularly pleased by the strong performance in the Property & Casualty business where we have achieved a strong 92% combined ratio, by the continued volume and profit growth of our Life & Health business, as well as by the resilience of our Asset Management segment, which recorded positive third-party net inflows for the second quarter in a row despite cautious investor sentiment.
Our solid growth is a clear reflection of our customers' continued trust in us to support them through this agonizing period of inflation and polarization. These trends not only challenge our global economy, but also affect people deeply at an individual financial level. With our results and capital position, we demonstrate that Allianz is a company that unfailingly delivers relevant solutions that people need, especially in our turbulent age."
FINANCIAL HIGHLIGHTS
Total business volume
2Q 2023: Total business volume rose by 5.9 percent to 39.6 billion euros, driven by the Property-Casualty business segment which benefited from higher prices and volumes while the growth of the Life/Health business segment was primarily linked to strong single-premium volumes in the US. This growth was partially offset by a decrease in AuM-driven revenues in our Asset Management business segment.
Internal growth, which adjusts for foreign currency translation and consolidation effects, was strong at 8.7 percent, driven by the Property-Casualty business segment and supported by the Life/Health business segment.
6M 2023: Total business volume rose by 4.8 percent to 85.6 billion euros, driven by the Property-Casualty business segment, supported by the Life/Health business segment, and partially offset by a decrease in our Asset Management business segment.
Internal growth was strong at 6.4 percent, driven by the Property-Casualty business segment.
Earnings
2Q 2023: Operating profit increased 7.1 percent to 3.8 (2Q 2022: 3.5) billion euros. This is due to a higher result of our US operations in the Life/Health business segment, and a stronger insurance service result in the Property-Casualty business segment. This was partly offset by the Asset Management business segment due to lower AuM-driven revenues.
Shareholders' core net income was strong at 2.5 (2Q 2022: 2.0) billion euros due to a higher operating profit.
Net income attributable to shareholders was 2.3 (2Q 2022: 2.0) billion euros.
Core earnings per share (core EPS)3 was 11.40 (6M 2022: 5.77) euros.
The annualized core return on equity (RoE)3 was 16.7 percent (full year 2022: 12.7 percent).
6M 2023: Operating profit increased 14.9 percent to 7.5 (6M 2022: 6.5) billion euros. This is due to a higher operating investment result in our Life/Health business segment and a higher operating insurance service result in the Property-Casualty business segment. This was partly offset by the Asset Management business segment due to lower AuM-driven revenues.
Shareholders' core net income was 4.7 (6M 2022: 2.5) billion euros due to a higher operating profit and an improved non-operating result. Non-operating result in the prior year was impacted by a provision related to the AllianzGI US Structured Alpha matter.
Net income attributable to shareholders was 4.4 (6M 2022: 2.5) billion euros.
The Solvency II capitalization ratio was 208 percent at the end of 2Q 2023 compared with 206 percent at the end of 1Q 2023. Including the application of transitional measures for technical provisions, the Solvency II capitalization ratio was 235 percent at the end of the second quarter of 2023 compared with 232 percent at the end of the first quarter of 2023.
"Our strong results and consistency of delivery are showing once again the quality of our franchise.
We confirm our full-year outlook of operating profit of 14.2 billion euros, plus or minus 1 billion euros."
- Giulio Terzariol, Chief Financial Officer of Allianz SE
Property-Casualty insurance: Double-digit growth
2Q 2023: Total business volume rose by 8.0 percent to 17.6 (16.3) billion euros. Adjusted for foreign currency translation and consolidation effects, internal growth was strong at 11.4 percent due to a price effect of 7.1 percent and a volume effect of 4.7 percent, slightly offset by a service effect of -0.5 percent. The main contributors to the increase were Allianz Partners, Australia, Latin America and Germany.
Operating profit increased by 10.8 percent to 2.0 (1.8) billion euros, benefiting from a higher operating insurance service result as well as an improved operating investment result.
The combined ratio improved by 0.4 percentage points to 92.2 percent (92.6 percent). The loss ratio improved by 0.4 percentage points to 67.4 percent, benefiting from lower claims from natural catastrophes and a positive discounting impact. This was partly offset by higher claims inflation and a lower run-off result. The expense ratio increased slightly by 0.1 percentage points to 24.8 percent (24.7 percent).
6M 2023: Total business volume surged 9.8 percent to 41.7 (38.0) billion euros. Adjusted for foreign currency translation and consolidation effects, internal growth was very strong at 11.8 percent, supported by a price effect of 6.4 percent as well as a volume effect of 5.4 percent and a service effect of 0.1 percent. While many entities added to that growth, the primary contributors were Allianz Partners, Turkiye, AGCS and Germany. In the first half of 2023, AGCS Total Gross Premium Written of €6.583 billion is +10% above prior year, adjusted for foreign exchange effects (6M 2022: €5.923 billion). Core Gross Net Premium Written (GNPW/premium net of fronting and facultative reinsurance) increased year- over-year by +16% to €4.586 billion (6M 2022: €3.949 billion), mainly driven by MidCorp and Property reflecting inflation- driven increase of insured values and rates, as well as strong new business and high retention. Liability, too, benefited from the significant rate momentum carried over from second half 2022 and showed a strong renewal performance.
Operating profit rose 16.3 percent to 3.9 (3.3) billion euros, driven by a significantly higher operating insurance service result and an improved operating investment result. The AGCS Operating Profit for 6M 2023 of €479 million (6M 2022: €351 million) is €129 million better than prior year mainly due to a better insurance service result.
The combined ratio improved by 1.1 percentage points to 92.0 percent (93.2 percent). The loss ratio improved by 0.9 percentage points to 67.2 percent due to lower claims from natural catastrophes and a favorable impact from discounting. This was partially offset by higher claims inflation and a less favorable run off result. The expense ratio improved by 0.2 percentage points to 24.8 percent (25.0 percent). The AGCS Core Combined Ratio for 6M 2023 stands at 90.8% and is better than prior year (6M 2022: 93.3%). The improvement in both the loss ratio and the expense ratio is only partially offset by a higher reinsurance ratio. Main drivers are a benign current accident year claims development in short-tail lines as well as a higher favourable discounting effect due to higher yields in the second half of 2022. The profitable underwriting performance allowed for an additional build-up of reserves, mainly to address inflation risks.
Life/Health insurance: Strong operating profit
2Q 2023: PVNBP, the present value of new business premiums, amounted to 17.7 (16.5) billion euros, driven primarily by increased volumes in the United States from fixed index annuities sales promotion. Economic impacts in Germany and Italy, primarily due to discounting, had an offsetting effect.
Operating profit increased to 1.2 (1.0) billion euros mainly driven by a higher result in the United States due to a prior year negative hedge result on variable annuities turning positive. The release of the Contractual Service Margin (CSM) remained stable at 1.2 (1.2) billion euros.
Contractual service margin (CSM) is stable at 52.9 (52.4) billion euros. New business and expected in-force return were offset by the CSM release and economic variances. Normalized growth was 1.5 percent in the second quarter.
The new business margin (NBM) reached 6.2 percent (6.3 percent). The value of new business (VNB) increased slightly to 1.1 (1.0) billion euros.
6M 2023: PVNBP declined to 36.2 (37.6) billion euros, as increases in the United States and Allianz Reinsurance were offset by a lower contribution from Germany and Italy.
Operating profit jumped to 2.5 (1.8) billion euros due to an increase in operating investment result in the United States caused by prior year negative hedge result on variable annuities turning positive. The release of the Contractual Service Margin (CSM) increased slightly to 2.5 (2.4) billion euros and is in line with expectations.
Contractual service margin (CSM) at 52.9 (52.2) billion euros, is driven by strong new business in the United States and Germany, and expected growth due to unwinding. The normalized growth was 2.7 percent.
The new business margin increased to 5.8 percent (5.5 percent), driven by favorable economics across entities. The value of new business remained stable at 2.1 (2.1) billion euros, due to offsetting results in France and Germany.
Asset Management: Stable third-party party assets under management
2Q 2023: Operating revenues were 1.9 billion euros, down 2.0 percent adjusted for foreign currency translation effects. Higher performance fees were more than offset by lower AuM-driven revenues.
Operating profit was 703 (773) million euros, down 9.0 percent from the prior-year period. Adjusted for foreign currency translation effects, operating profit decreased by 7.3 percent. The cost-income ratio (CIR) rose to 62.5 percent (61.7 percent).
Third-party assets under management were 1.662 trillion euros as of June 30, 2023, down by 6 billion euros from the end of the first quarter 2023. Positive net inflows of 2.7 billion euros and favorable market impacts of 2.0 billion euros were offset by negative foreign currency translation effects of 10.5 billion euros.
Total assets under management were 2.163 trillion euros at the end of the second quarter of 2023, down 11 billion euros from the end of the first quarter 2023, including net outflows of 5.9 billion euros.
6M 2023: Operating revenues decreased by 7.5 percent to 3.8 billion euros as a result of lower AuM-driven revenues. Operating profit was 1.4 (1.6) billion euros, down 11.1 percent from the prior-year period. Adjusted for foreign currency translation effects, operating profit was down 11.8 percent. The cost-income ratio (CIR) rose to 62.3 percent (60.7 percent). Third-party assets under management were 1.662 trillion euros as of June 30, 2023, up by 27 billion euros from the end of 2022.
