Allianz SE · XETR:ALV
Allianz — Q3 2018 Earnings Presentation
47 slides from Allianz's earnings presentation, Nov 9, 2018
Slide 1: 3Q 2018 Analyst conference call
3Q 2018 Giulio Terzariol Chief Financial Officer Analyst conference call November 9, 2018 © Allianz SE 2018
Slide 2: Content
CONTENT GROUP FINANCIAL RESULTS 1 3Q 2018 2 GLOSSARY DISCLAIMER © Allianz SE 2018 2
Slide 3: Group: strong results across the board
Group financial results 3Q 2018 Group: strong results across the board Group Property-Casualty Life/Health Asset Management Total revenues 9M 18 in EUR bn (internal growth vs. prior year in %) 97.8 (+6.8%) 41.9 (+5.9%) 51.1 (+7.2%) 5.0 (+10.4%) Operating profit 9M 18 in EUR mn (vs. prior year in %)
Slide 4: Group: strong results across the board - comments
Group financial results 3Q 2018 Group: strong results across the board Comments • Excellent internal growth • RoE (annualized) up 2.0%-p to 13.8% Internal growth accelerates from 3.5% to 6.8%. All segments with RoE ≥ 11%. Adverse impact from F/X (-3.0%) and consolidation • P/C – CR strongly improved
Slide 5: Group: 3Q operating profit at EUR 3bn
Group financial results 3Q 2018 Group: 3Q operating profit at EUR 3bn Total revenues (EUR bn) Operating profit drivers (EUR mn) +7.9% +20.6% +9.8% Internal growth +464 +62 +1 2,988 +0 28.3 30.5 -17 2,477 3Q 17 3Q 18 Shareholders’ net income (EUR mn) +23.6% 1,936 Operating P/C L/H AM CO Consoli- Oper
Slide 6: Group: 3Q operating profit at EUR 3bn - comments
Group financial results 3Q 2018 Group: 3Q operating profit at EUR 3bn Comments • Internal growth almost doubles to 9.8% • P/C – strong performance Excellent internal growth in L/H with +12.1% and OP rises strongly driven by a significantly improved AM +9.9%. Accelerating internal growth in P/C +6.1%
Slide 7: Group: SII ratio remains on excellent level
Group financial results 3Q 2018 Group: SII ratio remains on excellent level Shareholders’ equity (EUR bn) Key sensitivities (EUR bn) -0.3% Equity markets -30% -4.1 Unrealized 65.6 60.3 60.1 gains/losses1 12.2 +50bps -4.1 9.0 8.0 Interest rate Retained earnings2 24.5 22.4 23.2 -50bps +4.0 Paid in cap
Slide 8: Group: SII ratio remains on excellent level - comments
Group financial results 3Q 2018 Group: SII ratio remains on excellent level Comments • Shareholders’ equity – broadly flat, despite • SII ratio – remains excellent EUR 1bn capital return The SII ratio decreases 1%-p in 3Q 2018. While own In 3Q 2018, shareholders’ equity decreases by funds remain fla
Slide 9: Group: continued good capital generation
Group financial results 3Q 2018 Group: continued good capital generation Own funds +3.3 76.4 (EUR bn) 75.4 -0.3 75.4 -0.0 -2.0 -0.9 +1.7 +1.4 +0.6 -0.5 P/C AM L/H CO/Conso. 31.12.17 30.06.18 Regulatory/ Operating SII Market Capital mgmt./ Tax/ 30.09.18 model changes earnings impact management other
Slide 10: Group: continued good capital generation - comments
Group financial results 3Q 2018 Group: continued good capital generation Comments • Good capital generation • Market impact SII capital generation – net of tax and dividend – Immaterial impact on our SII ratio in 3Q 2018. A positive amounts to ~3%-p. 9M 2018 capital generation net of interest rate i
Slide 11: P/C: another quarter of strong internal growth
Group financial results 3Q 2018 P/C: another quarter of strong internal growth EUR mn Revenues YTD change on renewals 3Q 18 Total growth Internal growth 9M 18 Momentum ∆ p.y. ∆ p.y. Total P/C segment 11,961 +3.6% +6.1% +1.2% n.a. Selected OEs Germany 2,092 +4.3% +4.3% +2.0% stable France 1,036 +0.6%
Slide 12: P/C: another quarter of strong internal growth - comments
Group financial results 3Q 2018 P/C: another quarter of strong internal growth Comments • Strong internal growth continues • UK – price effect more than offset by lower volume Strong internal growth of +6.1% (1H: +5.9%; 9M: +5.9%) Continued growth in commercial motor and Petplan with volume (+4.3%)
Slide 13: P/C: operating profit increase driven by underwriting result
Group financial results 3Q 2018 P/C: operating profit increase driven by underwriting result Operating profit drivers (EUR mn) Combined ratio (in %) +44.6% -3.8%-p +471 +10 1,503 96.9 93.1 -17 1,039 Loss ratio 68.5 65.6 NatCat impact2 4.5 2.0 (in %-p) Expense ratio 28.4 27.6 3Q 17 3Q 18 Operating Un
Slide 14: P/C: operating profit increase driven by underwriting result - comments
Group financial results 3Q 2018 P/C: operating profit increase driven by underwriting result Comments • Operating profit – excellent • Run-off – lower than prior year OP rises strongly driven by a significantly improved Below prior year but above 10Y FY average of 3.8%. underwriting result. The unde
Slide 15: P/C: strong combined ratio
Group financial results 3Q 2018 P/C: strong combined ratio EUR mn Operating profit Combined ratio NatCat impact on CR 3Q 18 ∆ p.y. 3Q 18 ∆ p.y. 3Q 18 ∆ p.y. Total P/C segment 1,503 +44.6% 93.1% -3.8%-p +2.0%-p -2.5%-p Selected OEs Germany 335 +58.5% 89.5% -6.8%-p +0.9%-p -0.7%-p France 114 +1.0% 96.
Slide 16: P/C: strong combined ratio - comments
Group financial results 3Q 2018 P/C: strong combined ratio Comments • Germany – strongly improved • LatAm – good CR improvement in Brazil Lower weather-related claims (including NatCat) and OP Brazil EUR +8mn (∆ EUR +11mn). AY LR drives lower large losses main drivers of CR improvement. -7.4%-p CR r
Slide 17: P/C: resilient investment income
Group financial results 3Q 2018 P/C: resilient investment income Operating investment result1 Current yield Economic reinvestment yield (EUR mn) (debt securities; in %) (debt securities; in %) -2.4% 0.66 0.67 2.0 716 1.7 698 3Q 17 3Q 18 3Q 17 3Q 18 3Q 17 3Q 18 Total average asset base4 Duration5 (EU
Slide 18: P/C: resilient investment income - comments
Group financial results 3Q 2018 P/C: resilient investment income Comments • Interest & similar income • Current yield Lower income on debt & other. Income from equities Current yield is flat yoy and compared to 2Q 2018. broadly flat yoy. • Economic reinvestment yield • Net harvesting & other The 3Q
Slide 19: L/H: double-digit growth with NBM 3.5%
Group financial results 3Q 2018 L/H: double-digit growth with NBM 3.5% PVNBP share by line PVNBP by OE (EUR mn) Total L/H segment 3.4 3.5 Other OEs Germany Life 861 (-1.2%) 4,140 (+17.2%) Protection & health 6.6 13% 12% 6.5 USA 3,027 (+25.6%) Unit-linked 22% 2.3 2.4 22% w/o guarantees Germany Health
Slide 20: L/H: double-digit growth with NBM 3.5% - comments
Group financial results 3Q 2018 L/H: double-digit growth with NBM 3.5% Comments PVNBP by line PVNBP by OE • Preferred lines grow 21% with NBM 3.8% • Germany Life – preferred lines grow 29% New business with capital-efficient products is Strong demand for capital-efficient products (+32%). up 31%. La
Slide 21: L/H: operating profit in line with full-year outlook
Group financial results 3Q 2018 L/H: operating profit in line with full-year outlook (EUR mn) Operating profit by source Operating profit by line -1.6% -1.6% 1,069 +33 +23 +21 1,052 1,069 1,052 -29 226 183 -66 97 145 203 201 543 524 Operating Loadings Investment Expenses Technical Impact of Operatin
Slide 22: L/H: operating profit in line with full-year outlook - comments
Group financial results 3Q 2018 L/H: operating profit in line with full-year outlook Comments • Operating profit at good level Operating profit by line Operating profit in line with full-year expectation. • Protection & health • L/H RoE 9M 2018 (annualized) at 11.4% Lower contribution from our US bu
Slide 23: L/H: VNB growth accelerates to 16%
Group financial results 3Q 2018 L/H: VNB growth accelerates to 16% EUR mn Value of new business New business margin Operating profit 3Q 18 ∆ p.y. 3Q 18 ∆ p.y. 3Q 18 ∆ p.y. Total L/H segment 476 +16.0% 3.5% +0.1%-p 1,052 -1.6% Germany Life 169 +19.8% 4.1% +0.1%-p 258 -8.4% USA 105 +44.7% 3.5% +0.5%-p
Slide 24: L/H: VNB growth accelerates to 16% - comments
Group financial results 3Q 2018 L/H: VNB growth accelerates to 16% Comments New business Operating profit • NBM above target level of 3.0% • Germany Life – quarterly volatility For the 8th consecutive quarter NBM ≥ 3.0%. 9M 2018 operating profit stable at EUR 849mn. • 89% of VNB from preferred lines
Slide 25: L/H: investment margin at 21bps
Group financial results 3Q 2018 L/H: investment margin at 21bps Investment margin Economic reinvestment yield (debt securities; in %) (Yields are pro-rata) 3Q 17 3Q 18 2.1 2.3 Based on Ø book value of assets1 (EUR bn) 518 535 Current yield 0.83% 0.81% Based on Ø aggregate policy reserves (EUR bn) 42
Slide 26: L/H: investment margin at 21bps - comments
Group financial results 3Q 2018 L/H: investment margin at 21bps Comments • Investment margin down 3% (EUR mn) • Investment margin down 2bps (in %) Lower investment margin (-2bps) largely Decrease by 2bps to 21bps mainly due lower result compensated by higher reserve base (+5%). from harvesting and o
Slide 27: AM: EUR 2 trillion total AuM
Group financial results 3Q 2018 AM: EUR 2 trillion total AuM (EUR bn) Total assets under management 3rd party assets under management development +1.1% +1.6% 1,960 1,993 2,015 Allianz Group 512 528 528 1,464 +5.4 +10.0 +2.9 +4.1 +0.6 1,487 assets 3rd party AuM 1,448 1,464 1,487 31.12.17 30.06.18 30.
Slide 28: AM: EUR 2 trillion total AuM - comments
Group financial results 3Q 2018 AM: EUR 2 trillion total AuM Comments • 3rd party AuM segment: +2% • 3rd party AuM development 9M 2018: +3% Slight increase of 3rd party AuM driven by 3rd party EUR 27.1bn net inflows, EUR +35.0bn F/X effect net inflows at PIMCO and AllianzGI. primarily due to USD str
Slide 29: AM: strong revenue growth and increased margins
Group financial results 3Q 2018 AM: strong revenue growth and increased margins (EUR mn) Revenues development PIMCO AllianzGI +12.3% +7.6% +22.9% Internal growth +9.9% +6.6% +17.3% 1,734 1,158 576 123 1,076 13 1,544 469 111 24 70 46 Performance fees AuM driven & other revenues1 1,474 1,611 1,052 1,1
Slide 30: AM: strong revenue growth and increased margins - comments
Group financial results 3Q 2018 AM: strong revenue growth and increased margins Comments • Segment revenues +12% • AM segment 9M 2018 – revenues and margin up AuM driven revenues rise by 8% due to higher Revenues increase by 7%, primarily due to higher average 3rd party AuM (+6%) and margin increase
Slide 31: AM: double-digit profit growth
Group financial results 3Q 2018 AM: double-digit profit growth (EUR mn) Operating profit drivers PIMCO +10.6% +3.2% +9.8% Internal growth 449 463 +53 +124 +5 6501 5881 58.3 60.0 CIR (in %) -120 61.9 62.5 CIR (in %) 3Q 17 3Q 18 AllianzGI Operating AuM driven & Performance Expenses F/X Operating profi
Slide 32: AM: double-digit profit growth - comments
Group financial results 3Q 2018 AM: double-digit profit growth Comments • Segment – excellent OP • AllianzGI – best quarterly OP ever Operating profit increases by 11% mainly due to AuM Operating profit increases by 26% due to significantly and margin growth. higher performance fees mainly from stru
Slide 33: CO: stable development
Group financial results 3Q 2018 CO: stable development (EUR mn) Operating loss development and components 0 0 0 0 -211 -210 -0.2% Operating Holding & Banking Alternative Consoli- Operating result Treasury Investments dation result 3Q 17 3Q 18 ∆ 3Q 18/17 3Q 18 -235 12 13 0 © Allianz SE 2018 3Q 17 -23
Slide 34: CO: stable development - comments
Group financial results 3Q 2018 CO: stable development Comments • Operating loss in line with FY target Operating loss in CO/Consolidation of EUR -0.2bn at 24% of FY outlook midpoint of EUR -0.9bn. 9M 2018 operating loss of EUR -0.6bn at 65% of FY outlook midpoint. © Allianz SE 2018 34
Slide 35: Group: s/h net income up 24%
Group financial results 3Q 2018 Group: s/h net income up 24% EUR mn 3Q 17 3Q 18 Change Operating profit 2,477 2,988 +511 Non-operating items -142 -329 -187 Realized gains/losses (net) 171 145 -26 Impairments (net) -50 -189 -139 Income from financial assets and liabilities carried at fair value (net)
Slide 36: Group: s/h net income up 24% - comments
Group financial results 3Q 2018 Group: s/h net income up 24% Comments • Operating profit drives s/h net income • Tax expenses benefit from US tax reform Higher operating profit (∆ EUR +511mn) and a better 3Q 2018 tax rate at the high end of expectations due result from non-controlling interests (∆ E
Slide 37: Status quo and ambitions
Group financial results 3Q 2018 Status quo and ambitions 9M 18 2018 9M 18 2018 Businesses with 7.1%1 5%1 EPS Growth NPS above market 60%2 75% SII interest rate 13.8% 13% RoE Allianz Group 7%-p <11%-p sensitivity 94.0% 94% P/C CR PIMCO CIR 58.0% 60% L/H OEs with 93% 100% IMIX 71% 72% RoE ≥10% Share o
Slide 38: Content
CONTENT GROUP FINANCIAL RESULTS 1 3Q 2018 2 GLOSSARY DISCLAIMER © Allianz SE 2018 38
Slide 39: Glossary (1)
Glossary Glossary (1) AFS Available-for-sale: Non-derivative financial assets which have been acquired neither for sale in the near term nor to be held to maturity. Available-for-sale investments are shown at fair value on the balance sheet. AGCS Allianz Global Corporate & Specialty AllianzGI Allian
Slide 40: Glossary (2)
Glossary Glossary (2) Bps Basis points. 1 Basis point = 0.01%. CEE Central and Eastern Europe excluding Russia and Ukraine CIR Cost-income ratio: Operating expenses divided by operating revenues CO (The business segment) Corporate and Other CR Combined ratio: Represents the total of acquisition and
Slide 41: Glossary (3)
Glossary Glossary (3) FIA Fixed-index annuity: Annuity contract whereby the policyholder can elect to be credited based on movements in equity or bond market indices with protection of principal. FV Fair value: The price that would be received to sell an asset or paid to transfer a liability in an o
Slide 42: Glossary (4)
Glossary Glossary (4) L/H (The business segment) Life and Health insurance L/H lines of business Guaranteed savings & annuities: Guaranteed savings and annuities are life insurance products that always relate to the length of human life. These products offer life and / or death coverage of the insur
Slide 43: Glossary (5)
Glossary Glossary (5) LatAm Latin America: South America and Mexico LoB Line of business LR Loss ratio: Represents claims and insurance benefits incurred (net) divided by premiums earned (net). The calendar year (c.y.) loss ratio includes the results of the prior year(s) reserve development in addit
Slide 44: Glossary (6)
Glossary Glossary (6) OP Operating profit: Earnings from ordinary activities before income taxes and non-controlling interests in earnings, excluding, as applicable for each respective business segment, all or some of the following items: income from financial assets and liabilities carried at fair
Slide 45: Glossary (7)
Glossary Glossary (7) RfB Reserves for premium refunds (“Rückstellungen für Beitragsrückerstattung”): Part of the surplus that is to be distributed to policyholders in the future. These reserves are established based on statutory, contractual or company by-law obligations, or at the insurer’s discre
Slide 46: Glossary (8)
Glossary Glossary (8) Statutory premiums Represents gross premiums written from sales of life and health insurance policies, as well as gross receipts from sales of unit-linked and other investment-oriented products, in accordance with the statutory accounting practices applicable in the insurer’s h
Slide 47: Disclaimer
Disclaimer Disclaimer These assessments are, as always, subject to the disclaimer provided below. Forward-looking statements The statements contained herein may include prospects, statements of extent of credit defaults, (vii) interest rate levels, (viii) currency exchange future expectations and ot