Alliance with new record result
Insurance giant Allianz boosts earnings and cushions natural disaster costs. The group even ends up with more than expected, benefiting shareholders with a triple-digit million stock buyback.
Despite the flooding in southern Germany, Allianz increased its first-half profit and achieved a record result. Operating profit rose by five percent to 7.9 billion euros, the Munich-based insurer announced. Analysts had expected 200 million euros less on average. Allianz was able to partially offset the burden of natural disasters in property and casualty insurance with higher prices, and rising profits in the life and health segment made up the rest. The group's business volume - premium income and fees from asset management - increased by six percent to 91 billion euros.
Floods in Bavaria and Baden-Württemberg caused insured losses of around 2.5 billion euros industry-wide, of which Allianz estimates it will bear around 292 million euros. With a market share of 14 percent in Germany, 11,500 customers reported damages, averaging 25,000 euros each.
"Our performance demonstrates the core strengths and resilience of our company," said CEO Oliver Bäte. "We are confident that we can achieve our targets for the full year." Allianz reaffirmed its target of an operating result of 13.8 to 15.8 billion euros this year. After six months, it is on track to reach the upper end of this range. The stock market should also welcome the share buyback, which Allianz is increasing by 500 million euros this year, as announced the day before.
First share buyback already completed
It can afford to do so: Net profit after minority interests jumped by 14 percent to five billion euros in the first half. The share buyback for one billion euros, started in February, was already completed two weeks ago.
Despite partial significant premium increases in the second quarter, Allianz had to accept a decline in profits in property and casualty insurance. However, the result was better than analysts had expected. Allianz also performed better than expected in life and health insurance. New business, adjusted for special effects, jumped by almost 15 percent.
From April to June, fund providers Pimco and Allianz Global Investors (AllianzGI) received a further 14.1 billion euros. At the end of June, they managed 1.81 trillion euros for external customers, the most since the beginning of 2022.
The success of Allianz in the first half of the year, despite natural disasters and floods, significantly contributed to its ability to announce a triple-digit million euro stock buyback for shareholders. The group's strong performance in the life and health segment also aided in offsetting the losses from natural disasters, leading to an increase in overall profit.
The buyback announcement comes after Allianz completed its initial billion euro share buyback program started in February, demonstrating the group's financial stability and confidence in its future growth prospects.
