Allianz Back in the Black; Posts $498 Million Net for Nine-months

Germany’s Allianz Group bounced back from a series of losing quarters to record a 421 million euro ($498 million) overall group profit for the first nine months of 2003. Total premium income rose 9.1 percent during the period -adjusted for currency effects and consolidation.

“Total gross premium income in insurance business went up during the first nine months of 2003 (compared with the equivalent period for 2002) by 4.5 percent to 64.2 billion euros. [$75.44 billion],” said a company announcement. Allianz also reported good third quarter gains, posting a profit of 372 million euros ($437 million), while its combined ratio fell to 96.9 percent for the first nine months.

“Our 3 Plus 1 Program is paying off more and more. We anticipate that the positive trend in operating business will continue until the close of the fiscal year,” commented Helmut Perlet, responsible for controlling on the on the Allianz Board of Management. “It is likely that we will also be able to report the proceeds arising from the sale of the stake in Beiersdorf already during the fourth quarter. We will continue to drive restructuring forward at full speed and force the pace of reducing risk weighted assets at Dresdner Bank. That shows: We are gaining momentum and are back on track for profitability.”

The bulletin noted: “The turnaround programs at Dresdner Bank, Allianz Global Risks, AGF (See related article) and Fireman’s Fund made good progress. Banking showed a significant improvement in operating result from minus 1.5 billion euros [$1.76 billion] (after the first nine months of 2002) to minus 69 million euros [$81 million]. Loan-loss provisions were eased back significantly. Risk-weighted assets came down at Dresdner Bank – primarily as a result of the successful activity of the Institutional Restructuring Unit – from 142.8 billion euros [$167.8 billion] at the start of the year to 121.9 billion euros ($143 billion].

“Write-downs on investments available for sale at the Group again totaled 0.7 billion euros [$822.5 million] in the third quarter. This contrasted with write-ups amounting to 0.5 billion euros [$587.5 million] on securities written down in previous accounting periods. The balance of write-ups/write-downs was minus 2.3 billion euros [$2.7 billion] in the first nine months.”

P/C premiums rose by 600 million euros ($705 million) to 34.2 billion euros ($40.2 billion) compared with the equivalent year-earlier period, mainly from growth in Europe, particularly in Germany, France and Spain. Allianz also indicated that its “claims ratio improved by 7.6 percentage points to 71.7 percent compared with the equivalent period for 2002. Restructuring undertaken on the portfolios in France and the USA, the reduction in claims arising from natural forces, and the more favorable situation for major claims contributed to this result. The expense ratio fell from 27.4 to 25.2 percent. The combined ratio continued to improve and was 96.9 percent after the first nine months of 2003.

“Significant progress was made in all turnaround cases. The combined ratio in ongoing business at Fireman’s Fund was 92.0 percent. At Allianz Global Risks, i.e. business with international industrial customers, the ratio of claims and expenses to premiums earned was improved since the start of the year from 126.3 to 94.5 percent. French AGF Group achieved a combined ratio of 103.5 percent in the P/C business, coming very close to the goal of 103 percent for the year.”