A special gain in U.S. Life insurance gave europe’s largest insurer allianz a surprising increase in profits in the second quarter.
Chairman of the board of management oliver bate now sees allianz "well on the way" to achieving an operating profit of between 11 and 12 billion euros this year as planned, as he announced in munich on friday. In the first half of the year, the dax group achieved more than half this amount, at 6.1 billion euros.
In the second quarter, allianz benefited mainly from its life and health insurance business. As a result, operating profit for the group as a whole rose by a good five percent compared with the same period last year to just under 3.2 billion euros. Allianz increased its revenues by six percent to 33.2 billion euros in the second quarter. Bottom line: 2.1 billion euros, around 13 percent more profit than a year earlier.
Operating profit in the life and health insurance segment grew by almost 15 percent to 1.2 billion euros. However, this was mainly due to a change in the amortization period for certain annuity contracts in the united states, which boosted earnings by 156 million euros.
In its largest business segment, property and casualty insurance, allianz suffered a five percent drop in operating profit to 1.4 billion euros, as investments yielded less than in the previous year. However, expenses for claims, administration and distribution also absorbed somewhat more of the premium income. Good performance in the fund business of allianz’s u.S. Subsidiary pimco. Customers contributed the equivalent of an additional 23 billion euros to the funds of the u.S. Company.
However, the news received a mixed reception on the financial market. Allianz share price fell sharply at the start of trading. In the current year, however, it has already gained around one-fifth in value.
Allianz chief bate wants to further increase sales in property-casualty business. For customers and employees, the business is set to become much easier as a result of greater digitization. The board of management wants to develop more insurance products centrally for many countries, thus reducing costs and complexity. The group is also launching allianz direct, a new direct insurer that will offer digital car insurance in germany and other countries in 2019.
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