Allianz Finalizes 2001 Net Profit at $1.42 Billion, Defends Dresdner Acquisition

April 19, 2002

Germany’s Allianz Group had an off year in 2001, along with most of the rest of the insurance industry. The company announced its definitive results yesterday, showing a net profit of €1.6 billion ($1.42 billion), a drop of more than 50 percent over 2000’s results, and slightly less than its preliminary estimate released last February.

Allianz has set aside € 1.5 billion ($1.34 billion) to cover claims from the Sept. 11 attacks, and recently wrote down €100 million($89.1 million) from its investment in Fairchild Dornier when the company filed for bankruptcy. Standard & Poor’s, while reaffirming Allianz’ ‘AA+’ ratings, changed its outlook to negative last month. (See IJ Website March 21)

The WTC losses and the decline in equity valuations have affected insurers across the board, and mask some positive results achieved last year. Allianz announcement noted that “Total gross premium income for the insurance business at the Allianz Group increased by 9.4 percent from 68.7 to 75.1 billion euros [$61.3 billion to $70 billion] by comparison with the previous year. This significantly exceeded the 5 percent growth originally projected. The spurt in growth mainly came from property and casualty insurance.”

The WTC attacks also played havoc with combined ratios. Allianz c/r rose to 108.8 percent last year, but without Sept. 11 it would have declined slightly to 104.4 percent. Its target this year is to get it down “to under 100 percent within the next three years.”

Allianz Chairman, Dr. Henning Schulte-Noelle, strongly defended the company’s takeover of Dresdner Bank at the Financial Press Conference in Munich. “The Allianz Group has completed the decisive steps necessary for integration of Dresdner Bank and is now operatively implementing the concept of the integrated financial services provider,” said the announcement. Schulte-Noelle stated that “I am very satisfied with the progress of our integration work to date. We are well on schedule and I firmly believe that we will attain our goals for each year between 2002 and 2006.”

While acquiring Dresdner has been criticized by many analysts because of the bank’s poor performance, which is at least partially explained by the ongoing downturn in the German economy. “Like all banks, Dresdner Bank was also affected by an extraordinarily difficult financial year. Overall, banking business in 2001 closed with a loss of 220 million euros [$196 million],” said the announcement.

Allianz, however, foresees a number of benefits from the link with Dresdner, and indicated that “clients have accepted the model of the integrated financial services provider.” The bulletin said that the synergies already in place meant that “at Dresdner Bank alone, more than 100,000 clients have already received advice from Allianz experts.”

It also stated that “During the first quarter of 2002, the group sold four times more life insurance policies (24,000) through banking branches than via this sales channel during the previous year. Around 16 percent of all Riester [pension] contracts were sold through the bank. In the field of fund-linked annuity insurance the figure even exceeded 50 percent. More than 6,500 insurance policies were sold during the first three months of 2002 and this means that property insurance began the year well right from the start.”

Schulte-Noelle indicated that, “In the current year, the company intends to return to the continuous growth of previous years and to achieve earnings in excess of 3 billion euros [$2.67 billion].”|”allianz, finalizes, 2001, net, profit, $1.42, billion,, defends, dresdner, acquisition

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