By Ulrike Dauer
Germany's Allianz SE (ALV.XE) Friday said net profit rose 27% in
the second quarter, buoyed by higher revenues, improvements in the
property/casualty insurance and asset management businesses,
moderate insurance claims from storms and floods and a lower tax
rate.
Allianz also said it is well on track to reach the top end of
the range of its 2013 target of operating profit of 8.7 billion
euros to EUR9.7 billion ($11.53 billion to $12.9 billion).
"In view of our good half-year results, we are maintaining our
operating profit outlook for 2013 of 9.2 billion euros, plus or
minus 500 million euros, although based on our current projections
we see the figure more toward the upper end of this range," said
Chief Executive Michael Diekmann.
The insurer cautioned however that it sees no need to lift the
guidance, due to volatile capital markets and low interest rates,
the latter of which already weighed on operating profit in the
life/health insurance business.
Allianz is Europe's biggest insurer by market value and premium
revenues, followed by France's Axa SA (CS.FR) and Italy's
Assicurazioni Generali SpA (G.MI).
Axa reported a 14% rise in net profit for the first six months
to EUR2.58 billion. In that period, Allianz' half-year operating
profit was up 13% to EUR5.16 billion. Generali Thursday reported a
74% rise in second-quarter net profit to EUR478 million, which the
company said was the best quarterly result in the past five
years.
Allianz's quarterly net profit jumped to EUR1.59 billion from
EUR1.25 billion, beating a Dow Jones Newswires average consensus of
EUR1.35 billion.
Total revenues were up 6.3% to EUR26.8 billion, slightly above
the forecast EUR26.77 billion.
Operating profit marked a 5.2% increase in the quarter to
EUR2.37 billion from EUR2.25 billion, also above the forecast
EUR2.36 billion.
The main quarterly profit driver was the property/casualty
insurance business, which contributed operating profit of EUR1.18
billion, above the analyst forecast of EUR1.11 billion. This
includes a claim of EUR330 million for floods that swamped Europe
in June.
Still, the asset management business, with a 40% increase in
operating profit to EUR804 million, posted the biggest quarterly
jump and topped expectations. The business benefited from overall
revenue gains, despite some fund outflows in June, and the
continued extremely competitive cost-income ratio. Allianz owns
Pimco, the world's biggest bond fund manager.
On the downside, the operating profit in life/health insurance
fell 18% to EUR669 million.
"Life insurance remains under pressure from two sides: low
interest rates and increased regulatory demands that are limiting
our investment options. The environment is very difficult for
savers," said Chief Financial Officer Dieter Wemmer.
In the insurance business, companies are currently plagued by
the protracted low interest rate environment in Europe and other
regions, which makes it extremely challenging for the sector to
generate the substantial investment yield needed to pay competitive
returns to policy holders.
Insurers increasingly look for yields in areas such as renewable
energy, infrastructure, real estate and have also discovered the
direct lending business to some extent--outside the traditional
asset classes of bonds and stocks.
Write to Ulrike Dauer at ulrike.dauer@dowjones.com
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