insurances
Allianz reports record results in “horror year”
A flag with the Allianz logo and lettering is to be seen. photo
© Alexander Heinl/dpa/archive image
Germany’s largest insurer has so far survived last year’s inflation largely unscathed. The company passes on increased costs to customers in the form of price increases.
Despite inflation and a mood of crisis, Allianz insurance achieved record results last year. Operating profit rose by almost six percent compared to the previous year to almost 14.2 billion euros, as the Dax group announced on Friday. “We had a really strong 2022 in a terrible environment,” said CEO Oliver Bäte, speaking of a “horror year”.
The Munich company owes this, among other things, to very good business in its everyday business with property and casualty policies. This means that Germany’s largest insurer was even able to compensate for losses in asset management, because the second major business area was hit hard by the turbulence on the capital market. Part of the “horror year” were also billions in payments after an investment scandal at the subsidiary AGI in the USA, as a result of which it had to withdraw from the US market.
The Allianz Group’s net profit attributable to shareholders nevertheless increased by 1.9 percent to 6.7 billion euros. CFO Giulio Terzariol spoke – as almost always when presenting new Allianz business figures – of an “overall very strong performance”.
In the new year, however, CEO Bäte does not want to raise excessive hopes with what he says is a very conservative forecast: Allianz is aiming for an unchanged operating profit of 14.2 billion euros, with the usual range of plus/minus one billion.
In the insurance industry, inflation is causing concerns about a corresponding “claims inflation”. This means rising costs, because in the course of the general rise in prices, the repairs paid for by insurers – for example for car accidents or storm damage to buildings – are rapidly becoming more expensive.
Allianz has reacted to this with price increases: In the property and casualty line, for example, sales increased by 12.4 percent to 70 billion euros, after factoring out currency effects and acquisitions and sales, it was still 9.5 percent. According to Allianz, the “price effect” contributed to this with 5.7 percent. Although sales fell in health and life insurance, operating profit rose by 5.4 percent to 5.3 billion euros.
The past year was difficult for asset management. With its subsidiaries Pimco and AGI, Allianz is one of the world’s largest companies in this field. At the end of 2022, customers had invested 1.6 trillion euros in the group, 331 billion less than a year earlier. Operating profit fell by 1.9 percent to 8.2 billion euros.
Allianz explained this essentially by “unfavorable market influences”. Aside from that, customers also withdrew money. The company put the net outflow of funds at 81.4 billion euros. This effect also hit other asset managers in 2022.
Otherwise, CEO Bäte promised that the company would want to downsize its offices in Germany because of the trend towards working from home and that apartments could be built there. “Germany needs apartments,” said the manager.
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