Allianz Suffers Major Losses from Severe Storms in Slovenia, Austria, and Italy

The severe storms in Slovenia, Austria and Italy cost Allianz dearly in the summer. The consequences of natural disasters cost the insurer almost 1.3 billion euros in the third quarter, almost four times as much as a year earlier, as the DAX group announced on Friday in Munich. As a result, operating profit fell by 15 percent to 3.5 billion euros.

CEO Oliver Bäte sees Allianz on track to generate an operating profit of between 13.2 and 15.2 billion euros this year as planned. After the first nine months it is almost 11 billion euros.

In Germany, the storms “Denis”, “Erwin” and “Bernd” caused a lot of damage with hail and heavy rain in the summer, as CFO Giulio Terzariol explained in a telephone conference with journalists. A spokesman put the burden in this country at almost 600 million euros. In addition, there were storms in Italy with around 400 million euros and the devastating floods in Austria, Slovenia and Croatia.

The devastating floods in Austria, Slovenia and Croatia as well as the storms in northern Italy cost Allianz dearly. Operating profit in property and casualty business fell by a quarter to just over 1.4 billion euros. Damage from natural disasters amounting to almost 1.3 billion euros consumed 7.3 percent of the division’s income – more than in a decade. Even after the severe flood disaster in Germany in July 2021, this rate was 4.9 percent.

Things went better for Allianz in life and health insurance. Operating profit fell by around five percent to 1.3 billion euros. However, this was mainly due to changes in exchange rates and transition effects as a result of new accounting.

Meanwhile, the funds of the group subsidiaries Pimco and Allianz Global Investors (AGI) collected additional money from customers. In the third quarter they recorded net cash inflows of 10.5 billion euros. The entire fund division kept its operating profit practically stable at 788 million euros. Although operating income fell by almost three percent, the division collected higher performance-related commissions.

The bottom line is that Allianz shareholders received a surplus of over two billion euros in the third quarter, almost 30 percent less than in the same period last year. At that time, the group had made a special profit because it had transferred assets from AGI in the USA to a business partner. The reason for this, however, was an investment scandal worth billions: AGI had to give up most of its US business at the behest of the authorities.