Allianz takes rate to catch inflation & push Q2 P&C margins

Allianz increased profits from its P&C business by nearly 11% in the second quarter to some €1.98 billion as accelerating rate outpaced claims.

Allianz claimed an 8% growth in its preferred top-line measure of ‘total business volume’, a gain that would have been 11.4% were it not for FX headwinds.

Growth could be traced more to rate, a 7.1 point contributor to the headline pace, than to volume, offering 4.7 points of the total gain.

“We achieved strong rate increases and continue to take actions to successfully offset inflation,” management said in an accompanying statement. Allianz sees “solid pricing momentum” in commercial lines.

Allianz claimed 7.4% rate change on renewals after the first six months, up from a 5.6% gain at end-Q1, led by 17% growth in the UK and a range of 5% to 8% across most other European geographies.

The commercial lines at unit AGCS enjoyed a 7.3% rate gain. Allianz bragged of rate gain in middle market corporate across the group.

The combined ratio in the segment came down by 0.4 points to 92.2% on a similar decline in the loss ratio from lower nat cats, now at 0.9 ratio points from 3.0 points a year ago. A boost also came from IFRS17 discounting adjustments. Cleared of discounting, attritional loss ratios were up y/y.

Europe enjoyed largely stable or improving combined ratios, save for Italian floods. Australia suffered. Commercial insurance via unit AGCS took 5.2 points off its combined ratio to 88.3%.

Following a 41% increase in operating profits from the life segment, an 11% decline in asset management and a 48% gain in the investment earnings it can book by managing its own assets, the group ended with a 74% gain in Q2 net profits to €4.65 billion.

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