Improved P/C insurance rates boost Allianz
A relatively benign year in terms of national catastrophe losses combined with an improved pricing environment helped the property/casualty unit of insurer Allianz post growth and greater profitability in the first quarter of 2014.
The insurer, which posted its Q1 results a week ago, has now revealed more detail around its first quarter earnings. Overall, the company posted record revenues of €34 billion, a small but significant increase on the €32 billion it posted in the same quarter a year earlier. Its net profit in the period was €1.64 billion compared with €1.71 billion in the first quarter of 2013.
In its latest announcement, it said in its property/casualty unit, operating profit grew strongly, benefitting from an improved underwriting result after a lower impact from natural catastrophes.
In the first quarter of 2014, gross premiums written in property/casualty insurance reached €15.22 billion, an increase of 0.1 percent year-on-year from €15.20 billion. Excluding foreign exchange and consolidation effects, internal growth was 1.9 percent. It said strong internal premium growth came especially from Germany and Turkey as well as from Allianz Global Corporate & Specialty and Allianz Worldwide Partners.
The segment’s operating profit rose 12.9 percent to €1.49 billion in the first quarter of 2014 from €1.32 billion over the same period last year. Growth in operating profit stemmed mainly from a better underwriting result of €705 million after €540 million euros in the first quarter of 2013. “This improvement was helped by lower natural catastrophe claims and a continued positive pricing environment,” the company said.
The quarterly combined ratio improved by 1.7 percentage points to 92.6 percent from 94.3 percent in the previous year’s first quarter. Impacts from natural catastrophes were mainly limited to winter storms in the US and floods in the UK. Germany, France and the corporate and credit insurance areas recorded lower claims than last year.
“Our property and casualty business has continued on last year’s successful course with very good results. The segment contributed more than half of the Allianz Group’s total operating profit this quarter,” said Dieter Wemmer, chief financial officer of Allianz. “Not every quarter will have this low of an impact from natural catastrophes, but claims are also down overall, so I am very confident.”
