Germany’s Allianz apologized for releasing its first half 2006 earning figures a week earlier than scheduled (Due, it said, to German share trading regulations), but it had no need to apologize for the numbers the giant insurer put up.
Highlights included the following:
— Q2 operating profit up 19.1 percent to €2.794 billion [$3.6 billion]
— Q2 net income up by 64 percent to €2.279 billion [$2.93 billion]
— H1 operating profit up29.2 percent to €5.471 billion[$7.04 billion]
— H1 net income up 49.5 percent to €4.058 billion [$5.226 billion]
— Dresdner Bank and Asset Management undergo higher growth
— Further improvement in all operational segments
Allianz noted that the profitable growth shown by the preliminary figures for the second quarter of 2006 “significantly exceed market expectations.”
Other figures included the following:
— Q2 total revenues rose 1.9 percent to €24.1 billion [$31 billion].
— H1 total revenues of €53.7 billion [$69.15 billion – up 3.4 percent
— P/C combined ratio improved to 91.9 percent – 92.1 percent in Q2 2005.
— Life insurance posted double-digit growth in operating profit despite a slight dip in sales.
— Shareholders’ equity of Allianz Group rose by 2.1 percent from €39.5 billion as at December 31, 2005 to €40.3 billion [$51.8 billion].
“The very good performance clearly indicates that the initiatives introduced in the context of the 3+One Program already show their impact. This is the result of a profound process of change,” noted CEO Michael Diekmann. “All projects are being consistently and systematically implemented by the operating companies. Also, we have achieved a significantly more even regional distribution of revenues and operating profits across the globe than has been the case in the past. Our performance has become considerably more robust as a result of stronger diversification within the Group.”
The results were so encouraging that Allianz has raised its full year earnings forecasts. “Based on the very good performance over all operational segments, we expect higher earnings for 2006,” commented Helmut Perlet, Allianz board member. “We are anticipating operating profits in excess of €9 billion [$11.57 billion] for the fiscal year 2006, with net income between €5.5 and €6.0 billion [$7.07 and $7.71 billion],” he explained.
Diekmann stressed that the next few years would be shaped by ongoing work on the growth initiatives. “In Germany, restructuring of our insurance business has initiated a process that will again allow us to set benchmarks in customer service and the quality of our products and advice.” Unfortunately that “restructuring” will be accompanied by the loss of 5000 jobs at Allianz and another 2480 at Dresdner Bank (See IJ Website June 23). Allianz’ 21 offices in Germany will be consolidated into 10.
Despite the pain, Diekmann said the initiatives would enable the Group to “continue to expand our position as market leader.” He also pointed out that the positive performance enables Allianz to provide effective support for staff during the forthcoming changes – “by waiving notices of termination based on operational reasons, members of staff have eighteen months until the end of 2007 to adjust to the changes. We are a fair and reliable partner for our employees and we are supporting them in many different ways during this phase.”
The preliminary report (the official one will be released as scheduled on Friday, August 11) may be obtained on the Group’s Website at: www.allianz.com, along with a replay of the teleconference held Friday, August 4.
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