Q2 profits at Allianz hit by South Korean life and health business sale

A mixture of flood and storms in Europe and the classification of Allianz’s life and health business in South Korea as held for sale had a negative impact on the German insurer’s profits in the second quarter of 2016.

Furthermore, negative foreign-currency effects and the sale of its personal insurance business hit Allianz’s growth.

Allianz reported a net income of €1.2 billion for the second quarter of 2016, a decrease of 43.9 percent from €2.1 billion for the same period in 2015.

The company attributed the impact to the classification of its life and health business in South Korea as held for sale and higher damages from heavy floods and storms in Europe this spring.

The overall business shrank slightly as well.

Total revenues in the second quarter of 2016 fell by 2.5 percent to €29.4 billion, driven by all business segments, in particular by life and health.

Allianz's gross premiums written for its property/casualty insurance segment decreased by 2 percent for the second quarter to €11.6 billion.

Allianz attributed this to negative foreign-currency effects as well as the sale of the Fireman's Fund personal insurance business in 2015.

Allianz's underwriting result was negatively impacted by an increase in claims from natural catastrophes and weather losses, with a combined ratio of 96.4 percent, up 2.9 percentage points from the previous year.

“Internal growth was strong in the second quarter, demonstrating the strength of our business. However, operating profit was burdened by European floods and storms, wildfires in Canada, hailstorms in the United States, as well as lower investment income,” said Dieter Wemmer, chief financial officer of Allianz SE.