Allianz posts record €11.5bn operating profit despite "strong market volatility"
German insurance giant Allianz posted a record operating performance in 2018, reaching the upper end of its target. It also expects to generate a larger profit in 2019, provided there are no unforeseen performance interruptions.
The group's 2018 full-year operating profit rose by 3.7 percent to €11.5 billion, which it said was the highest in its history. The growth was mostly attributable to its property/casualty business segment, which reported a strong rise in operating profit of 13.3 percent - due to an improved expense ratio, lower claims from natural catastrophes, and premium growth.
For 2019, the Munich-based company is aiming for operating profit of €11.5 billion, plus or minus 500 million euros, barring unforeseen events.
The company's net income grew 9.7 percent to €7.5 billion, compared with €6.8 in the previous year. Allianz said an increased operating profit and lower income taxes more than offset the decline in its non-operating result.
Allianz's Solvency II capitalisation ratio amounted to 229 percent at end-2018, unchanged compared to end-2017. The insurer has proposed to increase its dividend of €9 per share for 2018, up 12.5 percent compared to 2017. It has also announced a new share buy-back programme of up to €1.5 billion.
“I am very proud of the global Allianz family for delivering such a great set of results. We reached the highest net income of the past ten years despite strong market volatility, especially in the fourth quarter,” said Oliver Bäte, chief executive officer of Allianz. “Our customers continue to rely on us, and it’s with them in mind that we are focusing on simplicity in the next iteration of our strategy.”
CFO Giulio Terzariol added: “Allianz achieved excellent results in 2018 with operating profit of 11.5 billion euros, reaching the upper end of the Group’s announced target range of 10.6 to 11.6 billion euros. Our healthy and well-diversified business makes us confident that we will continue to deliver a strong financial performance again this year.”
In the P&C segment, the company's gross premiums written amounted to €53.6 billion in 2018, compared with €52.3 billion in the previous year. The combined ratio improved by 1.2 percentage points to 94 percent.
Terzariol said: “I am pleased by our strong internal growth and our good operating performance in the Property and Casualty business segment. We reached our goal of a 94 percent combined ratio by our consistently disciplined underwriting and moreover by a substantially improved expense ratio.”
“Asset Management revenues and operating profit increased in a challenging environment in 2018. Volatility in financial markets, especially in the fourth quarter, led to net outflows. However, the expansion of our margins clearly shows the good health of our business,” Terzariol added.
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