26 February 2015 Insurance

Allianz profits rise; P&C achieves strong growth

Insurer Allianz has posted a growth in profits and revenues for 2014, as it benefitted from growth in its property and casualty (P&C) division.

Allianz’s total revenues surpassed the €120 billion mark for the first time, growing 10.4 percent to €122.3 billion in 2014, compared with €110.8 billion in 2013.

Its net income increased 4.1 percent to €6.6 billion in 2014, compared with €6.3 billion in 2013. Allianz also posted an increase in its operating profit of 3.3 percent to €10.4 billion in 2014, compared with €10.1 billion in 2013.

Within Allianz’s P&C insurance segment, operating profits grew 2.2 percent to €5.4 billion in 2014, compared with €5.3 billion in 2013, delivering more than half of the total group operating profit. This was driven mainly by a better underwriting result while the investment result remained stable. The combined ratio remained unchanged at 94.3 percent.

Gross written premiums in the division increased 3.7 percent to €48.3 billion in 2014, compared with €46.6 billion in 2013. Allianz said that premiums were driven by strong internal growth, in particular in the global insurance lines and the UK.

However, profits in the P&C segment fell 9.7 percent to €3.5 billion in the 2014, compared with €3.8 billion in 2013. Profits also fell in Allianz’s asset management division, but this was partially offset by 19.5 percent profit growth in its life and health division.

According to the insurer, operating profit and the combined ratio both benefitted in 2014 from a benign natural catastrophe environment, but were impacted by certain effects, including reserve strengthening in Brazil, at Fireman’s Fund and in Russia.

In the US, Allianz will realign the set-up of Fireman’s Fund by consolidating the corporate insurance activities and divesting the retail insurance line. Retail insurance business in Russia and Ukraine was readjusted in reaction to difficult economic conditions in those markets.

“Strong volume-driven internal growth in the property and casualty segment is supported by the continued high demand for our new modular products in the core markets,” said Dieter Wemmer, chief financial officer of Allianz. “Our acquisitions as well as the readjustments in the US, Russia and Brazil are important portfolio measures to continue the positive development of our property and casualty business.”

Michael Diekmann, chief executive officer of Allianz, added: “Geopolitical tensions, continued market volatility and a further decline in interest rates in 2014 led to lower global economic growth than expected. Despite these challenges, Allianz achieved very good results in revenues, operating profit and net income.”

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