Allianz has reported that its operating profit dropped 14.6% to €3.5 billion in Q3, driven by the Property/Casualty business segment affected by a 7.3 percentage point impact by natural catastrophes on the combined ratio, the highest in a decade.
The firm’s income in Q3 was €2.1 billion, down by 29.3%, though total business volume increased 4.5% to €36.5 billion.
In the Property-Casualty insurance segment in Q3, total business volume increased by 6.1% to €17.2 billion.
However, operating profit in the segment softened 25% to €1.4 billion, due to a lower operating insurance service result driven by an “exceptionally high level of natural catastrophes, that was partly offset by a higher operating investment result.”
Allianz disclosed that the combined ratio in the Property-Casualty segment in Q3 rose by 3.7 percentage points to 96.2%.
The loss ratio went up 3 percentage points to 71%, reflecting “exceptionally higher claims from natural catastrophes.” The expense ratio also increased by 0.7 percentage points to 25.1% mainly because of a higher administrative expense ratio.
Allianz’s natural catastrophe losses in the third-quarter amounted to €1.284 billion, which the firm said was significantly above the prior year and around 2.5% above budget. The biggest drivers were a series of catastrophe events that affected Central Europe and Italy.
As for the Life/Health insurance segment, Allianz noted that the present value of new business premiums, increased to €14.4 billion in Q3, driven by higher volumes in Italy and the United States, partially offset by foreign currency translation effects in the United States, Asia Pacific, and Türkiye, as well as unfavorable economic impacts primarily from discounting in Germany, France, and Italy.
Operating profit in this segment in Q3 was down slightly to €1.3 billion, which Allianz said was primarily driven by foreign currency translation effects and transitional impacts linked to the adoption of IFRS 17 in the United States in the prior year.
For 9M 2023, Allianz’s total business volume rose by 4.7% to €122.1 billion, “driven by the Property-Casualty business segment, supported by the Life/Health business segment, and partially offset by the development in our Asset Management business segment.”
Operating profit for the first 9M increased 3.6% to €11 billion, primarily driven by the Life/Health business segment. Meanwhile, shareholders’ core net income at 9M was €6.8 billion, up by 25.5%.
Oliver Bäte, Chief Executive Officer of Allianz SE, commented, “In the first nine months of this year, we have seen robust growth in our business volume, operating profit as well as core net income.
“We have also further strengthened our solvency position at 212%. Our focus on execution and operational efficiency is enabling our profitable growth with healthy margins, and this places Allianz on an excellent trajectory to achieve our targets.
“We confirm with confidence our operating profit target of 14.2 billion euros, plus or minus 1 billion euros.
“Our resiliency as a company reflects the distinctive advantages of our global scale, diversified business mix, and the industry-leading levels of trust and engagement that we have earned with our stakeholders.”