Allianz grows near double-digit in P&C Q4, margins dampened by nat cat
Allianz grew its fourth quarter P&C top-line at a nearly double-digit rate after adjusting for FX moves, but suffered an uptick in claims, notably nat cat, that held the segment's profit increase to a mild 1.6%.
Allianz cited “strong revenue growth, driven by healthy pricing and higher volumes" with gains visible across jurisdictions and segments. FX-adjusted total business volume was said to have growth 9.8% on a 7.6% price effect and 1.8% volume impact. Unadjusted reported revenue growth came in at a milder 7.3%.
Business volume growth should slow to 5-7% in 2024, rendering insurance revenue growth near the 5% mark, management said in fresh guidance.
For Q4 2023 growth, Allianz cited strength in markets such as Germany, Central and Eastern Europe and Italy, plus at the corporate risk unit AGCS, although percentage growth rates shot notably higher in select pockets. Of those, only CEE broke the double-digit growth hurdle at 12.2%.
AGCS was said to have offered 9.1% annual growth in business volumes in Q4 or 11.7% excluding fronting and captives. That led to a 3.8% gain in the IFRS17 measure of insurance revenue, well below rates for the group as a whole.
Margins slipped on a rise in nat cat claims, but Allianz bragged of having fended off claims cost threats. Claims rose fractionally faster than insurance revenues, part and parcel to a 2.4% y/y decline in the insurance service result.
"Our focus on technical excellence helped us to successfully mitigate the impact of inflation on our operating profit, which faced an above-average level of natural catastrophes," management said of the EBIT build.
The combined ratio rose 0.6 points to 94.9% on a 2.3 pint rise in the loss ratio driven by 2.6 point boost in the nat cat contribution to 4.2%, partially offset by a better run-off result.
Those margins should improve in 2024 towards the 93-94% range if nat cat impact can ease back towards 3 ratio points, management said of its new 2024 guidance.
On the larger Allianz earnings statement, creeping gains in P&C were overwhelmed by a 30% rise in life segment operating profit and a 13% rise for asset management. By the bottom line, shareholder net income had risen 46%d to €2.35 billion.
For the full year, Allianz group operating income rose 6.7% on the way to a 30.3% rise in shareholder core net income to €9.1 billion.
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