Allianz SE has released its first quarter (Q1) 2022 financial results.
The group said the results demonstrated that it was on track to meet its full-year targets.
Q1 2022:
- Total revenues rise 6.2 percent to 44.0 billion euros
- Operating profit remains strong at 3.2 billion euros. Slight decline of 2.9 percent reflects impact of higher claims from natural catastrophes
- Net income attributable to shareholders 0.6 billion euros, down 78.1 percent following an additional after-tax provision of 1.6 billion euros related to the AllianzGI U.S. Structured Alpha proceedings. Excluding the provision, net income was 2.2 billion euros, down 16.0 percent mainly due to a lower non-operating result
- Robust Solvency II capitalization ratio of 199 percent1
Outlook:
- 2022 operating profit target confirmed at 13.4 billion euros, plus or minus 1 billion euros2
Other:
- Share buy-back program of 1 billion euros on track: 2.4 million shares acquired for 500 million euros until the end of April 2022
Financial highlights
Revenues
1Q 2022: Total revenues rose by 6.2 percent to 44.0 billion euros. The Property-Casualty business segment benefited from higher prices and volumes while the Asset Management business recorded higher assets under management-driven revenues. Increased sales in the United States and Germany contributed to revenue growth in the Life/Health business segment.
Internal revenue growth, which adjusts for foreign currency translation and consolidation effects, increased to a strong 3.8 percent, driven by all business segments.
Earnings
1Q 2022: Operating profit 3.2 (1Q 2021: 3.3) billion euros, down 2.9 percent as claims from natural catastrophes nearly quadrupled, leading to a decline in the underwriting result in the Property-Casualty business segment. This was partly offset by a strong operating result in the Asset Management business segment due to higher average third-party assets under management (AuM). In the Life/Health business segment, operating profit remained stable.
Net income attributable to shareholders was 0.6 billion euros, down 78.1 percent. The decline reflects the impact of an additional pre-tax provision of 1.9 billion euros related to the AllianzGI U.S. Structured Alpha proceedings, which reduced the group’s first-quarter net income by 1.6 billion euros.
Annualized Return on Equity (RoE) was 3.5 percent (full year 2021: 10.6 percent).
Basic Earnings per Share (EPS) was 1.38 (6.23) euros, down 77.9 percent.
Solvency II Capitalization Ratio
The Solvency II capitalization ratio was 199 percent at the end of 1Q 2022 compared with 209 percent at the end of 4Q 2021. Including the application of transitional measures for technical provisions, the Solvency II capitalization ratio was 226 percent at the end of the first quarter of 2022 compared with 239 percent at the end of 2021.
Segmental highlights
“Even in a quarter marked by severe economic and geopolitical challenges, we maintained our first-quarter operating profit close to the strong level of the prior year. We have achieved nearly a fourth of our full-year target, which shows our operating performance remains on track.
- In our Property-Casualty business, we witnessed strong internal growth, driven by healthy pricing and robust volume growth as our business benefits from its solid position in a recovering economy. Our operating profit was affected by the highest level of claims from natural catastrophes for a first-quarter in a decade.
- In Life/Health, the strong improvement in our new business margin and value reflects an improved business mix and increase in volumes across most entities. This bodes very well for our future profitability.
- Our Asset Management business had a very strong first-quarter in terms of operating profit. The net income of the segment was impacted by a provision related to the Structured Alpha matter to address the remaining financial exposure in relation to compensation payments to investors and any resolution of governmental proceedings. The provision will not affect our dividend policy and payout.
We confirm our full-year outlook of operating profit of 13.4 billion euros, plus or minus 1 billion euros.” – Giulio Terzariol, Chief Financial Officer of Allianz SE
Property-Casualty insurance: Good underlying result
Q1 2022: Total revenues rose by 9.1 percent to 21.5 (19.7) billion euros. Adjusted for foreign currency translation and consolidation effects, internal growth was strong at 6.6 percent due to a price effect of 4.1 percent, a volume effect of 2.0 percent as well as a service effect of 0.4 percent. This increase reflected a healthy growth across entities and geographies.
Operating profit was 1.4 (1.5) billion euros, down by 9.0 percent from the year-earlier period due to a lower underwriting result, which was affected by considerably higher claims from natural catastrophes and to a lower extent by attritional losses. A favorable contribution from run-off result had a partially offsetting effect. The expense ratio increased slightly to 27.1 percent (27.0 percent) due to higher acquisition costs mainly from a change in business mix at Allianz Partners.
The combined ratio rose by 1.7 percentage points to 94.7 percent (93.0 percent). While the combined ratio in our retail business3 increased, mostly due to the impact of higher natural catastrophes and the normalization of motor claims frequency, it improved significantly in our commercial business3.
Life/Health insurance: Excellent new business margin
1Q 2022: PVNBP4, the present value of new business premiums, was stable at 19.4 (19.5) billion euros. Germany recorded lower sales volumes for capital-efficient products, while Italy had lower sales of unit-linked products. Higher sales volumes for fixed index annuities in the United States and for hybrid products in France mostly offset this development.
Operating profit remained unchanged at 1.2 (1.2) billion euros. The consolidation of the acquired Aviva operations in Poland had a positive contribution as did Taiwan, Spain and Germany Life. This was offset by a lower result in the United States.
The new business margin (NBM) jumped to 3.5 percent (2.9 percent), driven by an improved business mix. Favorable market developments also supported the improvement in margin. The value of new business (VNB) rose by a strong 20 percent to 671 (558) million euros also supported by higher volumes in most operating entities.
Asset Management: Strong operating profit
1Q 2022: Operating revenues increased by 12.5 percent to 2.1 billion euros as a result of higher AuM-driven revenues. Operating profit surged by 11.2 percent from the prior-year period to 831 (747) million euros. Adjusted for foreign currency translation effects, operating profit increased by 5.5 percent. The cost-income ratio (CIR) rose to 59.8 percent (59.3 percent).
Third-party assets under management were 1.878 trillion euros as of March 31, 2022, a decrease of 89 billion euros from the end of the fourth quarter of 2021. This was due to an unfavorable market impact of 110.0 billion euros and net outflows of 9.0 billion euros, partly offset by a positive impact of 30.1 billion euros from favorable foreign currency translation effects.
Total assets under management were 2.478 trillion euros at the end of the first quarter of 2022, reflecting the trend in the third-party assets under management.
