Allianz Posts $3.73 Bn Net Income; Hit by Cat Claims, Sovereign Debt, Banks

By Charles E. Boyle | February 24, 2012

Catastrophe claims and write downs on investments in sovereign bonds and banks were behind the profit fall revealed by Allianz, Europe’s biggest insurance group. On Thursday it reported net income of €2.804 billion [$$3.777 billion], missing estimates by almost half a billion euros. Net income for 2010 was €5.209 billion  [$7.0165 billion].

Total revenues were down slightly at €103.56 billion [139.5 billion] compared to €106.451 billion [$142.16 billion] in 2010. Operating profits dropped as well to €7.866 billion [$10.58 billion] from €8.243 billion [$11.103 billion] in 2010.

Allianz total revenues for the fourth quarter of 2011 were slightly lower at €25 billion [$33.675 billion], compared to €26 billion [$35.02 billion] in 2010. Operating profits were down by 7.1 percent to €2.0 billion [$1.7 billion] from €2.154 billion [$2.9 billion] , while net income dropped to €560 million [$754 million] from €1.181 billion [$1.59 billion].

The combined ratio from Allianz P&C sector for the quarter was 97.6 percent, compared to 94.9 percent in Q4 2010. For the full year the combined ratio in P&C was 97.8 percent, slightly higher than 2010′s 97.2 percent

Allianz SE CEO Michael Diekmann commented: “2011 was a tough year. But we maintained our stability throughout. That’s an extraordinary achievement. These results show the true strength of the Allianz business model.”

The earnings bulletin noted that “gross premiums written in Property and Casualty insurance rose to an all-time high of €44.8 billion [$60.24 billion]. This is an increase of 2.0 percent from 2010 and 2.3 percent in internal terms, adjusting for foreign exchange and consolidation effects. Revenues in the UK, South America, Australia and in the credit insurance business increased significantly. In key markets such as Germany, France and Italy, revenues remained stable.”

Looking at prospects for 2012, Diekmann stated: “We are expecting similar global economic conditions in 2012 with a moderate improvement in the second half of the year. The first steps to stabilize the euro zone have already been implemented successfully.

“In this environment, our ability to plan for risks and generate earnings will once again serve our customers, shareholders and employees well. We are confident about our strong business opportunities in 2012. Therefore, we are raising the operating profit outlook to 8.2 billion euros, plus/minus 0.5 billion euros.”

The full report, as well as additional and supplemental information and instructions for accessing the earnings conference call, may be obtained on the company’s web site.

Source: Allianz SE

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