AGCS can hold newly attained profitability through inflation wave: CFO
The Allianz group's global corporate and specialty insurance unit AGCS can hold profitability gains taken from a recent turnaround through a pending inflation onslaught without worry, Allianz group CFO Giulio Terzariol (pictured) has insisted.
“Considering we are still getting rate increases which are ahead of inflation, I would expect this company to be able to keep this level of performance moving forward,” he said, admitting that current inflation constitutes “a headwind that was not there a few quarters ago.”
AGCS managed to take 2.0 percentage points off of its Q2 combine ratio to 95.2% despite a 1.5 pps increase in the nat cat load. A management presentation cited “higher nat cat and weather-related losses overcompensated by improvement in underlying loss ratios."
The move in the combined ratio towards 95% stands as “confirmation that the company is on a good trajectory,” Terzariol said. “There is quality around the combined ratio.”
The improved underwriting helped push operating profits at the AGCS unit up 60% year on year to €156 million.
On the top lines, AGCS claimed adjusted revenue growth of 11.0% to €2.72 billion in the second quarter and has booked renewals in the first half at rates 10% above prior year levels, the presentation indicated. Total revenue growth, fuelled in large part by FX gains, came to a heady 22%.
Energy & construction and financial lines were called out for fuelling the underlying growth.
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