Allianz bullish despite drop in net income

GERMAN insurer Allianz said it was on course to hit the upper end of its full-year profits target despite a fall in net earnings in the third quarter.

It said third quarter net income fell 8.8 per cent to €1.3bn (£1.1bn) as a result of higher tax liabilities.

However, Allianz said revenue in the third quarter grew by 11.4 per cent to €24.5bn compared to €22bn a year earlier, while operating profit grew by 2.3 per cent to €2.1bn from €2bn. Operating profit for the nine months to 30 September stood at €6.1bn, up 19.8 per cent on the year before.

Michael Diekmann, chief executive of Allianz, said: “I expect our full-year operating profit to trend towards the upper end of our target range of around €7.2bn plus or minus €500m. Also, for the first time since 2005 we are likely to end the year with total revenues above €100bn.”

Gross premiums written in Allianz’s property and causality business in the third quarter increased by 3.6 per cent to €10.6bn, compared to €10.2bn a year before.

Adjusted for currency effects, premiums decreased by 1.1 per cent.

But operating profit grew by 8.8 per cent to €1.1bn in the third quarter compared to €1bn the previous year as a result of improved underwriting and higher investment income.

The insurer’s life and health business saw revenue grow by 16.4 per cent to €12.6bn in the third quarter, compared to €10.8bn the previous year as a result of continued demand for unit-linked as well as traditional life insurance products.

Operating profit in Allianz’s asset management business for the third quarter stood at €521m a 41.6 per cent increase on the previous year’s €368m. Total assets under management (AUM) grew by 25.5 per cent to €1.4trn to 30 September, compared to €1.15 trillion a year ago, Allianz added.