AGCS posts strong underlying results on back of 13% rate increases

Allianz Global Corporate & Specialty (AGCS) reported strong premium growth in the first half the year on the back of average rate increases of 13%. A further improvement in claims activity attributed to the “portfolio pruning” carried out since the market turn in 2017/2018 and level natural catastrophe losses compared with H1 2021, delivered an improved underwriting result and operating profit for the business. Allianz Group also reported strong revenue growth and an improved operating profit for the first half of this year. But its net profit attributable to shareholders was hammered by the provision booked in the first quarter related to the US Structured Alpha proceedings and lower non-operating investment income because of the difficult market conditions since Russia’s invasion of Ukraine. In the first half of 2022, AGCS increased its gross written premiums year-on-year by €572m, or 11%, to €5.7bn compared with €5.2bn at the same point last year. The Munich-based group said that this was driven by higher rates on renewals of 13% including adjustment for terms and conditions, a higher renewals base, new business and favourable foreign exchange effects. Most lines of business experienced year-on-year growth, especially financial lines, energy and construction, and property, said AGCS. Its combined ratio for the first half of 2022 stands at 95.1% against 97.8% at the same point last year. “The improvement versus prior year is mainly driven by a favourable current accident year loss ratio due to lower claims activity resulting from portfolio improvements,” said AGCS. It experienced a similar impact from natural catastrophes compared to last year. The most significant loss was from the floods in Australia and a major hailstorm in France. AGCS therefore delivered an operating profit of €290m at the half year point of this year compared with €179m at the same point in 2021. This is an increase of €111m mainly attributed to a better underwriting performance in the second quarter. Allianz Group confirmed its full year operating profit outlook of €13.4bn, plus or minus €1bn, despite heightened inflation and market volatility in the first half of 2022. Allianz CFO Giulio Terzariol said: ”We remain confident about our long-term growth trajectory." Total group revenues jumped by 7.2% to €81.2bn in the first half of this year. Operating profit increased by 1.2% to €6.7bn. Net income attributable to shareholders was, however, €2.3bn, down from €4.8bn at this point last year mainly because of the provision booked in the first quarter for the Structured Alpha proceedings. The group said that its P&C insurance segment showed “robust” growth. Total revenues surged by 12.1% to €37.7bn. “Adjusted for foreign exchange and consolidation effects, internal growth was strong at 8.5% supported by volume and price effects,” said Allianz. P&C operating profit rose by 5.2% to reach €3bn largely driven by a significantly higher operating investment result. The combined ratio was 94.1% up from 93.4% at the half year point in 2021 “reflecting higher natural catastrophe and weather claims,” said Allianz.

AGCS posts strong underlying results on back of 13% rate increases

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