After a short period of economic recovery, the recent increase in infection rates has led many governments to intensify containment measures again to limit the spread of COVID-19. As the challenging socio-economic conditions persist, Allianz Group demonstrated its resilience again in the third quarter of 2020 and recorded a solid performance in all business segments nine months into the year.
Internal revenue growth, which is adjusted for currency and consolidation effects, declined 6.0 percent in the third quarter of 2020, mostly driven by our Life/Health business segment. Total revenues decreased 6.1 percent to 31.4 (3Q 2019: 33.4) billion euros in the third quarter of 2020, whereas operating profit decreased merely 2.6 percent to 2.9 (3.0) billion euros. Our Life/Health business segment operating profit increased, supported by an improved investment margin. In our Property-Casualty business segment, operating profit fell only slightly despite further COVID-19-related losses and a lower contribution from run-off. Our Asset Management business segment’s operating profit decreased following declining operating revenues. Net income attributable to shareholders increased 5.9 percent to 2.1 (1.9) billion euros in the third quarter of 2020 due to a higher non-operating investment result, partly offset by higher restructuring and integration expenses as well as the lower operating profit.
Basic Earnings per Share (EPS) increased 7.2 percent to 5.01 (4.68) euros in the third quarter of 2020. Annualized Return on Equity (RoE) amounted to 11.3 percent (full year 2019: 13.6 percent). The Solvency II capitalization ratio was at 192 percent at the end of the third quarter of 2020, compared to 187 percent at the end of the second quarter 2020. 1
In the first nine months of 2020, total revenues declined by 1.9 percent. Operating profit dropped by 14.6 percent to 7.8 (9.1) billion euros, mostly due to the adverse impacts from COVID-19 amounting to 1.3 billion euros. Our Property-Casualty operating profit fell as a result of both a lower underwriting result and operating investment result. After a favorable one-off profit in 2019 and pressure on the investment margin, the operating profit in our Life/Health business decreased. On the other hand, operating profit from our Asset Management business increased due to higher AuM-driven revenues. The overall decrease in operating profit led to a drop in the net income attributable to shareholders.
In light of the ongoing economic uncertainties related to the COVID-19 pandemic, the Board of Management of Allianz SE has decided to discontinue the previously suspended Share Buyback Program 2020 and to no longer execute the outstanding part of the program amounting to 750 million euros.
“We have delivered solid results in an environment that will remain challenging. Not just our financial performance has been resilient, but we have also enjoyed strong support from our fantastic staff around the world. And Allianz has once again been recognized by Interbrand as #1 insurance brand globally,” said Oliver Bäte, Chief Executive Officer of Allianz SE. “Therefore, we remain confident to not just weather the COVID-19 crisis well, but to build an even stronger Allianz for the benefit of all stakeholders.”
Full report link https://www.allianz.com/en/press/news/financials/business_results/201106_Allianz-3Q-2020-earnings-release.html