After strong 1H results, ALLIANZ Group's operating result for 2017 expected to near EUR 10.8 billion
German ALLIANZ group achieved total revenues of EUR 30 billion, up by 2.0% y-o-y. All business segments contributed to this increase with the majority coming from the Life and Health business segment.
Operating profit amounted to EUR 2.9 billion, an increase of 22.9%, supported by all business segments, in particular by our Property and Casualty business. Net income attributable to shareholders increased by 83.4% to EUR 2.0 billion, driven by both the higher operating profit and improved non-operating result. The non-operating result in the prior year was burdened by the negative impact from our South Korean life business.
Basic Earnings per Share (EPS) amounted to EUR 4.45 (2.39). Annualized Return on Equity (RoE) was 13.4% (full year 2016: 12.3% according to the Group estimates. The Solvency II capitalization ratio rose to 219% at the end of the quarter, compared to 212% at the end of the first quarter of 2017, mostly driven by favorable market developments.
The first half of 2017 was also a success, with all business segments contributing. Total revenues increased in all segments in the first six months of 2017:
· operating profit in 1H rose 15.7% to EUR 5.9 billion, well past the middle point of the FY target set by the Group;
· net income attributable to shareholders increased by 17.9% to EUFR 3.8 billion. The strongest growth was achieved by the Life and Health business (78%)
Property and Casualty insurance: Strong profitability
· GWP amounted to EUR 11.7 (11.6) billion in Q2 2017. Adjusted for foreign exchange and consolidation effects, internal growth totaled 0.5. ALLIANZ Worldwide Partners, Spain and Germany were the main growth drivers.
· Operating profit increased by 28.0% y-o-y, to EUR 1.4 billion in Q2 2017. This increase was due to a higher underwriting result driven by lower losses from natural catastrophes and lower attritional losses.
· As a result of the lower loss ratio the combined ratio improved to 93.7% in Q2 2017, from 96.4% a year earlier.
Life and Health insurance: Abundant growth on rising customer demand
· Statutory premiums increased by 2.6%, to EUR 16.7 billion in Q2 2017 due to higher sales of capital-efficient products in Germany and growth in unit-linked premiums in Taiwan and Italy. Adjusted for foreign exchange and consolidation effects, statutory premiums rose by 4.3%.
· Operating profit grew by 12.0% to EUR 1.1 billion in Q2 2017, mainly because of a higher technical margin largely in France and an increased investment margin in line with growing reserves. All lines of business contributed with higher operating profit. Capital-efficient products showed the biggest jump with an increase of 16%.
· The value of new business (VNB) went up by 37.6% to EUR 469 million in Q2 2017 as a result of the continued shift to capital-efficient products.
· The new business margin (NBM) improved to 3.4 (2.6) percent in the second quarter of 2017, driven by our efforts to adjust products to the current market environment thereby improving the business mix.
"We're half way through our three-year Renewal Agenda plan, and at this stage it is clear that those efforts are bearing fruit for all our stakeholders," said Oliver BAETE, Chief Executive Officer of ALLIANZ SE. "The strong capitalization reinforces the resilience and flexibility of ALLIANZ. We can now say that we expect operating result for 2017 near the upper end of the target range of EUR 10.8 billion."
Author: Daniela GHETU
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