Allianz ‘copes’ with financial crisis as profit dips to £1.2bn

Allianz Group’s operating profit dropped in the first quarter of this year by €0.8bn to €1.4bn (£1.2bn) compared with the first quarter of 2008, writes Angelique Ruzicka.

The group’s quarterly revenues increased slightly to €27.7bn from the €27bn it reported in 2008.

Allianz said its capital position remained strong with a solvency ratio of 159% as at 31 March.

“Allianz continues to cope successfully with the impact of the financial crisis . . . We are strongly capitalised, our investment portfolio is of high quality and liquid and our operating profitability proves resilient,” said Helmut Perlet, chief financial officer of Allianz SE.

The group’s property and casualty insurance business gross written premiums increased to €13.9bn in the first quarter of 2009 from the €13.7bn it reported in the same quarter of last year. Operating profit was €1bn, down from €1.5bn. Allianz said this dip was due to a lower underwriting result. The combined operating ratio declined to 98.5%, from the 84.8% in the first quarter of 2008.

“Our accident year loss ratio has been rising but the trend continues to stay below claims inflation,” said Perlet. “Underwriting discipline remains important, as well as our efficiency programmes that continue to focus on consistent claims management. We also see renewal prices starting to rise after almost three years of soft markets.”

Allianz said life and health insurance showed “signs of recovery” during the first quarter of 2009. Premium income rose to €13bn from €12.3bn. Operating profit for these lines was down to €0.4bn compared with the €0.6bn of the first quarter of last year. But this was an improvement to the operating loss of €0.3bn in the last quarter of 2008.

“In life insurance, demand continued to shift to participating products with minimum guarantees. Operating profit of €400m and top-line growth indicate first signs of recovery in the life business,” said Perlet.