Allianz profit rises on life insurance as Pimco sees inflows

Allianz SE, the owner of bond manager Pacific Investment Management Co., saw second-quarter profit rise on stronger earnings from the life-health insurance and asset management businesses.

Group operating profit climbed 3.8% to €3.93 billion ($4.3 billion), which beat analysts’ expectations, the Munich-based company said today (August 8). Life and health earnings, driven by all regions, helped offset weaker property and casualty results which were impacted by events including flooding in Germany.

Pimco benefited from clients’ returning appetite for bonds, with €13.4 billion from outside clients in the quarter.

Allianz aims to generate an operating profit of between €13.8 billion and €15.8 billion this year, a target it confirmed today. It also plans to expand this year’s share buybacks to as much as €1.5 billion, according to an earlier statement on Wednesday.

“Even when we look deeper into the results, almost all key items are ahead of consensus,” analysts at Jefferies said in a note.

Allianz shares were up 1.8% at 10:37 am in Frankfurt.

“Allianz delivered strong results in the first six months of the year and we are confident in our ability to achieve our full-year ambitions.

Our performance demonstrates the core strengths and resilience of our company, particularly as our results were achieved amid significant natural catastrophe activity in the second quarter – and notably in our home market. The way that Allianz responded to our customers affected by the floods in Germany reflected the best possible blend of compassion, speed, and expertise. Teams enabled by digital claims processing tools visited nearly all affected properties within two weeks of the event, which reassured our customers and limited damages.

These excellent property and casualty outcomes were complemented by strong delivery in our life/health, and asset management segments, demonstrating how we translate our customer-centric strategy into resilient earnings growth,” said CEO Oliver Bäte.

Bäte is expected to lay out new targets for the company at a capital markets day in December, after increasing the dividend payout ratio and stepping up deals activities in recent months. Allianz in July revealed plans to buy a majority stake in Singapore’s Income Insurance Ltd., three months after announcing the sale of some US insurance businesses.

Allianz’s second-quarter operating profit from life-health insurance jumped 14.7%, while earnings in property-casualty insurance fell 3.4% on high natural disaster claims. Profit in the asset management business, which also includes Allianz Global Investors, rose 5.6%.

Germany, the company’s home market, experienced some severe flooding in the quarter that cost insurers at least €2 billion, according to data from an industry lobby group. Globally, natural catastrophes caused about $62 billion of insured losses in the first half of 2024, roughly 70% above the 10-year average, Munich Re said separately in a report last week, according to Bloomberg.

Allianz currently estimates the losses from flooding in Southern Germany to be about €300 million, according to an investor presentation.

Pimco’s inflows in the second quarter were driven by fixed income, alternative and equity strategies. Bäte said that clients added more money in July. Allianz Global Investors saw third-party inflows of about €700 million in the second quarter.

“We look with confidence to the second half of 2024 and affirm our outlook for an operating profit of 14.8 billion euros plus or minus 1 billion euros for the full year,” commented CFO Claire-Marie Coste-Lepoutre.

• Read more under:
• Announcements
• InsurTech