(new: Statements by the board members from the online press conference, updated course reaction)
MUNICH (dpa-AFX) – Last year, the insurer Allianz earned more in day-to-day business than ever before. While the multi-billion dollar investment scandal at the fund subsidiary AGI was still consuming the surplus, operating profit rose by almost six percent year-on-year to almost 14.2 billion euros, more than analysts had expected. For the new year, CEO Oliver Bäte envisages an operating profit of between 13.2 and 15.2 billion euros, as the group announced on Friday in Munich. However, the Allianz share went down significantly after the news.
In the morning, the paper temporarily lost more than three and a half percent to 213.10 euros. At noon, its price was still two and a half percent in the red and the share remained the biggest loser in the Dax (DAX 40). The price gain since the turn of the year was still around seven percent.
Analysts were positively surprised by the annual figures. However, analyst Michael Huttner from the private bank Berenberg had given investors hope for another major share buyback on Thursday. This has now not been fulfilled.
Allianz met analysts’ expectations with its profit target for 2023. On average, they expected an operating profit of 14.2 billion euros – the midpoint of the range now targeted by the board. Starting this year, large insurance companies will calculate their business figures for the first time according to the new IFRS 17 accounting standard. However, the bottom line is that the new standard has no impact on Allianz’s profit forecast, said CFO Giulio Terzariol in a video conference with journalists. Positive and negative effects cancel each other out.
CEO Oliver Bäte called 2022 a “really strong” year for Allianz, but “in a terrible environment”. He spoke of a “horror year”. Also, but not only because of the dangerous developments in the world, not everything went brilliantly at Allianz last year.
The bottom line is that the group earned a good 6.7 billion euros, just under two percent more than a year earlier. In both years, the group had to shoulder billions in damages and penalties as a result of the AGI investment scandal. The company had pleaded guilty to securities fraud in the US after large investors such as pension funds with AGI hedge funds suffered billions in losses at the beginning of the corona pandemic. As a result, the fund company had to part with most of its US business.
In addition, Allianz sold the majority of its Russian subsidiary due to Russia’s war of aggression in Ukraine and international sanctions and, as announced, booked a charge of around 400 million euros.
Meanwhile, the shareholders should not starve. For 2022 you can expect a dividend of 11.40 euros per share, 60 cents more than a year earlier. Allianz has continued to increase its payouts in recent years. In addition, the group repeatedly buys back its own shares from the market.
In the past year, Allianz increased its sales by almost three percent to almost 153 billion euros. While turnover in fund business and in life and health insurance fell, in property and casualty insurance it increased by 12.4 percent to 70 billion euros. If you factor out currency effects and the purchase and sale of parts of the company, the increase still amounted to 9.5 percent. According to the information, price increases contributed 5.7 percent to this.
The Group earned more in both insurance classes than in the previous year. In property and casualty business, operating profit rose by more than eight percent to 6.2 billion euros after suffering the consequences of the corona pandemic in 2020 and the devastating flood disaster in Germany in 2021. However, analysts had expected a stronger increase.
This was more than made up for by life and health insurance: Their operating profit surprisingly climbed by five percent to 5.3 billion euros. In the fourth quarter, Allianz benefited greatly from a higher margin on investments in Germany and positive results from pension contracts in the USA. The takeover of the Polish life insurance business of competitor Aviva also had a positive effect.
In the fund division, Allianz felt the effects of the general market development and the separation of AGI business units in the USA. For the year as a whole, investors withdrew more than 81 billion euros from the funds of the group’s subsidiaries Pimco and AGI. In particular, the transfer of AGI’s US business to business partner Voya caused the assets managed by the Allianz companies to shrink by a further 30 billion euros. At the end of 2022, the Allianz fund subsidiaries managed a total of around 1.6 trillion euros for third parties, 331 billion less than a year earlier.
The decline had negative financial consequences for the fund division: your sales fell by around two percent to 8.2 billion euros for the year as a whole. Operating profit shrank by eight percent to 3.2 billion euros. The penalties and damages from the investment scandal in the USA are not included in these figures./stw/cho/nas/stk
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