Life products, Asset Mgmt. Buoy Allianz, Generali, Aegon, Ageas in Q1

By and | May 13, 2010

European insurers were buoyed by strong sales of life insurance and asset management products on the back of a reviving economy in the first quarter, offsetting big disaster damage claims.

Germany’s Allianz, Italy’s Assicurazioni Generali, The Netherlands’ Aegon and Belgium’s Ageas, formerly known as Fortis, all reported strong first quarters as consumers’ fears began to ease after the financial crisis.

“People are more willing to store money at insurance companies. We see that strongly in the United States and also in the Netherlands,” Aegon Chief Financial Officer Jan Nooitgedagt told Reuters.

“It is a bit less so in Britain and Spain but you should also not forget that in Asia, where economies have rebounded earlier, demand has increased.”

Insurers’ better-than-expected earnings on Wednesday echoed those of rivals over the past two weeks, when UK firms such as Aviva and Standard Life and U.S. peers MetLife and Prudential Financial Inc reported increasing investment income and demand for savings products.

Brightening insurance prospects also provided fuel for the market debut of Poland’s top insurer, PZU, whose $2.7 billion flotation on Wednesday was the biggest in Europe in two years. Its share rose 13 percent.

Shares of insurance companies rose, with the STOXX 600 Europe Insurers index up 2.3 percent, helped by a 4.3 percent rise at Allianz, Europe’s biggest insurer, by 1355 GMT.

“Life and health as well as asset management had an extremely strong start in the year,” DZ Bank Thorsten Wenzel said in a research note.

Ageas rose 1.2 percent but Aegon fell 2.5 percent, and analysts cited the Dutch insurer’s lower-than-expected underlying operating profit and present value of new premium income as negative items.

Allianz booked net profit of €1.59 billion ($2 billion), compared with just €424 million ($534 million) a year earlier when fallout from the financial crisis weighed.

Like other insurers, however, Allianz faced a bigger-than-expected hit from natural catastrophe claims in the first quarter and said its full-year profit target could be threatened if there is no let up in disaster-linked losses.

Chief Financial Officer Oliver Baete told a conference call with journalists that he would need to see how such claims will develop at least through the second quarter before being able to say if the group’s full-year goal of generating €7.2 billion ($9.07 billion) in operating profit would be affected. “Naturally, if we were to have further high natural catastrophe burdens, it would be difficult to stick to it,” he said.

Allianz did not expect Greece’s sovereign debt crisis to derail economic recovery, and neither Allianz nor Aegon significantly changed their Greek exposure, as opposed to Ageas, which sold €4 billion ($5.04 billion) worth of southern European bonds.

Italy’s Generali, Europe’s third-largest insurer, posted a five-fold increase in net profit, beating expectations, and said it sees a rise in full-year operating margins and its net result.

Ageas’ insurance business made four times more profit than a year ago at €85 million ($107 million)

(Additional reporting by Phil Blenkinsop, Editing by Hans Peters and Erica Billingham)

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