Allianz SE (ALV.XE), Europe's biggest insurer by market
capitalization and premium income, faces business challenges in the
euro area's peripheral countries Italy, Spain and Portugal, where
it expects operating profits to remain flat over the medium term,
according to an online investor presentation Wednesday.
By comparison, business prospects in France, Latin America and
Turkey look much better, where Allianz expects improvements both in
revenues and operating profits.
Allianz didn't provide any forecast figures for those regions.
In 2011, the three peripheral euro-zone countries together
contributed some 14% of Allianz's total revenue of 103.6 billion
euros ($127.2 billion) and about 17% of the group's operating
profit of EUR7.9 billion.
Addressing the current low interest rate environment, which
curbs life insurers' returns, Chief Financial Officer Oliver Baete
emphasized to investors the resilience of the profit margins in
Allianz's life insurance business.
"There are very strong buffers between what we are earning and
new money we are investing," Mr. Baete said.
He also reiterated that Allianz has consistently derisked its
investment portfolio, for instance by reducing its exposure to the
financial sector, which it will continue to do. For example, it has
gradually cut its stakes in Commerzbank AG (CBK.XE), UniCredit SpA
(UCG.MI) and Hartford Financial Services Group Inc. (HIG).
Allianz has also "dramatically reduced" exposure to sovereign
debt in peripheral euro zone countries, except for Italy, where it
carefully manages exposure and duration of the bonds it holds, Mr.
Baete said, citing figures that were released at the end of the
first quarter.
Write to Ulrike Dauer at ulrike.dauer@dowjones.com
(Alexandra Edinger contributed to this report.)
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