Slide 1: 2Q 2018 Analyst conference call
2Q 2018 Giulio Terzariol Chief Financial Officer Analyst conference call August 3, 2018 © Allianz SE 2018
Slide 2: Content
CONTENT GROUP FINANCIAL RESULTS 1 2Q 2018 2 GLOSSARY DISCLAIMER © Allianz SE 2018 2
Slide 3: Group: on track to reach targets - 6M EPS up 5 percent
Group financial results 2Q 2018 Group: on track to reach targets - 6M EPS up 5 percent Group Property-Casualty Life/Health Asset Management Total revenues 6M 18 in EUR bn (internal growth vs. prior year in %) 67.3 (+5.6%) 30.0 (+5.9%) 34.2 (+4.9%) 3.3 (+10.9%) Operating profit 6M 18 in EUR mn (vs. p
Slide 4: Group: on track to reach targets - 6M EPS up 5 percent (comments)
Group financial results 2Q 2018 Group: on track to reach targets - 6M EPS up 5 percent Comments • Strong internal growth of 5.6% • RoE (annualized) up 2.0%-p to 13.8% Excellent internal growth in AM with +10.9%. All segments with RoE ≥ 10%. Strong internal growth in P/C +5.9% and L/H +4.9%. • P/C –
Slide 5: Group: strong 2Q operating profit at EUR 3bn
Group financial results 2Q 2018 Group: strong 2Q operating profit at EUR 3bn Total revenues (EUR bn) Operating profit drivers (EUR mn) +2.9% +2.3% +6.5% Internal growth 2,928 +9 +68 +28 +16 2,997 30.0 30.9 -52 2Q 17 2Q 18 Shareholders’ net income (EUR mn) -5.2% 1,994 1,891 Operating P/C L/H AM CO Co
Slide 6: Group: strong 2Q operating profit at EUR 3bn (comments)
Group financial results 2Q 2018 Group: strong 2Q operating profit at EUR 3bn Comments • Internal growth accelerates to 6.5% • P/C – positive underlying development Excellent internal growth in AM with +12.6%. OP on last year’s level. A higher investment result, Very strong internal growth in P/C +7.
Slide 7: Group: continued excellent capitalization
Group financial results 2Q 2018 Group: continued excellent capitalization Shareholders’ equity (EUR bn) Key sensitivities (EUR bn) -4.8% Equity markets -30% -3.8 Unrealized 65.6 63.3 60.3 gains/losses1 12.2 10.3 +50bps -4.1 9.0 Interest rate Retained earnings2 24.5 24.1 22.4 -50bps +3.9 Paid in capi
Slide 8: Group: continued excellent capitalization (comments)
Group financial results 2Q 2018 Group: continued excellent capitalization Comments • Shareholders’ equity – EUR 3.9bn capital returned • SII ratio – on excellent level to shareholders in 2Q The SII ratio increases 5%-p in 2Q. Own funds are flat In 2Q 2018, shareholders’ equity decreases by at EUR 75
Slide 9: Group: good capital generation
Group financial results 2Q 2018 Group: good capital generation Own funds +2.5 76.4 (EUR bn) 75.4 -0.2 75.4 0.0 -1.1 -1.3 +1.4 +1.0 +0.6 -0.5 P/C AM L/H CO/Conso. 31.12.17 31.03.18 Regulatory/ Operating SII Market Capital mgmt./ Tax/ 30.06.18 model changes earnings impact management other actions SII
Slide 10: Group: good capital generation (comments)
Group financial results 2Q 2018 Group: good capital generation Comments • Good capital generation • Capital management/management actions SII capital generation – net of tax and dividend – Combined impact of ~-2%-p. Dividend accrual amounts to ~+4%-p, in line with 2Q 2017. 1H capital of 50% of net i
Slide 11: P/C: very good internal growth across the board
Group financial results 2Q 2018 P/C: very good internal growth across the board EUR mn Revenues YTD change on renewals 2Q 18 Total growth Internal growth 6M 18 Momentum ∆ p.y. ∆ p.y. Total P/C segment 12,087 +3.4% +7.3% +1.3% n.a. Selected OEs Germany 1,912 +4.1% +4.1% +2.0% stable Italy 1,141 +0.2%
Slide 12: P/C: very good internal growth across the board (comments)
Group financial results 2Q 2018 P/C: very good internal growth across the board Comments • Growth accelerates further in 2Q • Spain – good growth in commercial Very strong internal growth of +7.3% (1Q: +4.9%; Commercial motor main contributor. 1H: +5.9%) with volume (+5.1%) and price (+2.2%) • UK –
Slide 13: P/C: good underlying performance
Group financial results 2Q 2018 P/C: good underlying performance Operating profit drivers (EUR mn) Combined ratio (in %) +0.7% +0.3%-p 1,446 +48 1,455 93.7 94.1 -31 -8 Loss ratio 64.9 66.3 NatCat impact2 1.0 1.3 (in %-p) Expense ratio 28.8 27.8 2Q 17 2Q 18 Operating Underwriting Investment1 Other Op
Slide 14: P/C: good underlying performance (comments)
Group financial results 2Q 2018 P/C: good underlying performance Comments • Operating profit – stable • Expense ratio – on the right track OP on last year’s level as a slightly lower underwriting Widespread improvement in the ER leads to -1.0%-p result is offset by higher investment income. yoy redu
Slide 15: P/C: segment impacted by large losses, weather and NatCat
Group financial results 2Q 2018 P/C: segment impacted by large losses, weather and NatCat EUR mn Operating profit Combined ratio NatCat impact on CR 2Q 18 ∆ p.y. 2Q 18 ∆ p.y. 2Q 18 ∆ p.y. Total P/C segment 1,455 +0.7% 94.1% +0.3%-p +1.3%-p +0.3%-p Selected OEs Germany 255 +5.6% 94.4% -0.5%-p +3.1%-p
Slide 16: P/C: segment impacted by large losses, weather and NatCat (comments)
Group financial results 2Q 2018 P/C: segment impacted by large losses, weather and NatCat Comments • Germany – underlying improvement • UK – on good level Lower NatCat, improved underlying LR and higher ER improves (-1.1%-p), mainly related to run-off (∆ -0.9%-p) more than offset higher weather- one
Slide 17: P/C: investment income up on income from equities
Group financial results 2Q 2018 P/C: investment income up on income from equities Operating investment result1 Current yield Economic reinvestment yield (EUR mn) (debt securities; in %) (debt securities; in %) +6.4% 0.65 0.67 2.2 747 795 1.5 2Q 17 2Q 18 2Q 17 2Q 18 2Q 17 2Q 18 Total average asset ba
Slide 18: P/C: investment income up on income from equities (comments)
Group financial results 2Q 2018 P/C: investment income up on income from equities Comments • Interest & similar income • Current yield Higher income on equities more than offsets lower Current yield is positively impacted by special income on debt and other. Current income on equities distributions
Slide 19: L/H: 3% new business growth with NBM 3.5%
Group financial results 2Q 2018 L/H: 3% new business 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 1,075 (+2.8%) 4,629 (+21.7%) Protection & health 6.8 12% 13% 6.4 USA 2,567 (-2.2%) Unit-linked 24% 2.3 2.3 26% Asia Pacific w/o guarante
Slide 20: L/H: 3% new business growth with NBM 3.5% (comments)
Group financial results 2Q 2018 L/H: 3% new business growth with NBM 3.5% Comments PVNBP by line PVNBP by OE • New business growth of 4.5% excluding F/X • Germany Life – preferred lines grow 33% Adverse F/X impact leads to total growth of 3.2%. Sales benefit from enhanced product features, • Preferr
Slide 21: L/H: operating profit good at EUR 1.1bn
Group financial results 2Q 2018 L/H: operating profit good at EUR 1.1bn (EUR mn) Operating profit by source Operating profit by line -4.6% -4.6% 1,128 +32 1,128 +55 1,075 1,075 -86 -31 220 -22 227 97 103 220 204 592 541 Operating Loadings Investment Expenses Technical Impact of Operating 2Q 17 2Q 18
Slide 22: L/H: operating profit good at EUR 1.1bn (comments)
Group financial results 2Q 2018 L/H: operating profit good at EUR 1.1bn Comments • Operating profit at good level Operating profit by line Decline mainly driven by F/X (∆ EUR -31mn) and • Capital-efficient products driven by F/X higher PHP. Operating profit at 26% of FY outlook Lower contribution fr
Slide 23: L/H: VNB up 5%
Group financial results 2Q 2018 L/H: VNB up 5% EUR mn Value of new business New business margin Operating profit 2Q 18 ∆ p.y. 2Q 18 ∆ p.y. 2Q 18 ∆ p.y. Total L/H segment 491 +4.7% 3.5% +0.1%-p 1,075 -4.6% Germany Life 187 +22.5% 4.0% +0.0%-p 257 -10.1% USA 92 -2.1% 3.6% +0.0%-p 217 -17.0% Asia-Pacif
Slide 24: L/H: VNB up 5% (comments)
Group financial results 2Q 2018 L/H: VNB up 5% Comments New business Operating profit • NBM above target level of 3.0% • Germany Life – PHP up 1.4%-p For the 6th consecutive quarter NBM ≥ 3.0%. Lower net harvesting result and higher PHP. • VNB increases 7% excl. F/X • USA – unfavorable market develo
Slide 25: L/H: investment margin solid at 22bps
Group financial results 2Q 2018 L/H: investment margin solid at 22bps Investment margin Economic reinvestment yield (debt securities; in %) (Yields are pro-rata) 2Q 17 2Q 18 2.2 1.9 Based on Ø book value of assets1 (EUR bn) 516 529 Current yield 0.89% 0.88% Based on Ø aggregate policy reserves (EUR
Slide 26: L/H: investment margin solid at 22bps (comments)
Group financial results 2Q 2018 L/H: investment margin solid at 22bps Comments • Yield decline within expected range • Investment margin (EUR mn) at good level Current yield based on aggregate policy reserves Negative F/X impact of EUR -41mn. Support down by -2bps. from higher reserve base (+3%). •
Slide 27: AM: total AuM at highest level ever
Group financial results 2Q 2018 AM: total AuM at highest level ever (EUR bn) Total assets under management 3rd party assets under management development +1.9% +2.5% 1,960 1,956 1,993 +53.8 +0.3 1,464 Allianz Group 512 527 528 1,429 assets -1.3 -7.9 -9.7 3rd party AuM 1,448 1,429 1,464 31.12.17 31.03
Slide 28: AM: total AuM at highest level ever (comments)
Group financial results 2Q 2018 AM: total AuM at highest level ever Comments • 3rd party AuM segment – beneficial F/X impact • 3rd party net flows segment: EUR -9bn Rising 3rd party AuM (+2.5%) driven by strengthening Net inflows in mutual funds, net outflows from of USD versus EUR during 2Q 2018, m
Slide 29: AM: strong internal growth and better margin
Group financial results 2Q 2018 AM: strong internal growth and better margin (EUR mn) Revenues development PIMCO AllianzGI +9.0% +8.1% +11.1% Internal growth +12.6% +16.5% +3.3% 1,179 1,696 517 1,091 28 1,556 115 28 466 88 86 59 Performance fees AuM driven & other revenues1 1,468 1,582 1,063 1,151 4
Slide 30: AM: strong internal growth and better margin (comments)
Group financial results 2Q 2018 AM: strong internal growth and better margin Comments • Revenues segment – internal growth +13% • Revenue margins increase AuM driven revenues up 6% (+13% excluding F/X) 3rd party AuM margin of the segment increases to due to higher average 3rd party AuM (+3%) and 41.
Slide 31: AM: OP increases double-digit
Group financial results 2Q 2018 AM: OP increases double-digit (EUR mn) Operating profit drivers PIMCO +11.6% +12.1% +18.8% Internal growth 504 +216 +31 450 6521 5841 -138 58.8 57.2 CIR (in %) -41 62.5 61.6 CIR (in %) 2Q 17 2Q 18 AllianzGI Operating AuM driven & Performance Expenses F/X Operating pro
Slide 32: AM: OP increases double-digit (comments)
Group financial results 2Q 2018 AM: OP increases double-digit Comments • Segment – OP significantly up • AllianzGI – strong OP F/X adjusted operating profit increases by 19% F/X adjusted operating profit rises by 13%. (nominal profit growth +12%) mainly due to higher Higher AuM driven revenues are t
Slide 33: CO: improving
Group financial results 2Q 2018 CO: improving Operating loss development and components +25 +20 0 -196 -224 -17 +12.4% Operating Holding & Banking Alternative Consoli- Operating result Treasury Investments dation result 2Q 17 2Q 18 ∆ 2Q 18/17 2Q 18 -230 10 25 0 © Allianz SE 2018 2Q 17 -255 26 5 0 33
Slide 34: CO: improving (comments)
Group financial results 2Q 2018 CO: improving Comments • Operating loss in line with FY target Operating loss of EUR -0.2bn at 22% of FY outlook midpoint of EUR -0.9bn. • Holding & Treasury Main driver is higher net interest result (∆ EUR +15mn). • Banking Change is driven by disposal of Oldenburgis
Slide 35: Group: s/h net income of EUR 1.9bn
Group financial results 2Q 2018 Group: s/h net income of EUR 1.9bn EUR mn 2Q 17 2Q 18 Change Operating profit 2,928 2,997 +69 Non-operating items -43 -313 -270 Realized gains/losses (net) 337 377 +40 Impairments (net) -59 -103 -44 Income from financial assets and liabilities carried at fair value (n
Slide 36: Group: s/h net income of EUR 1.9bn (comments)
Group financial results 2Q 2018 Group: s/h net income of EUR 1.9bn Comments • S/h net income driven by non-OP result • Tax expenses benefit from US tax reform Higher operating profit (∆ EUR +69mn) and benefit Tax rate in line with expectations. Allianz Group tax from lower tax rate (∆ -2%-p) more th
Slide 37: Status quo and ambitions
Group financial results 2Q 2018 Status quo and ambitions 6M 18 2018 6M 18 2018 Businesses with 6.8%1 5%1 EPS Growth NPS above market 60%2 75% SII interest rate 13.8% 13% RoE Allianz Group 10%-p <11%-p sensitivity 94.4% 94% P/C CR PIMCO CIR 56.9% 60% L/H OEs with 93% 100% RoE ≥10% IMIX 72%2 72% Share
Slide 38: Content
CONTENT GROUP FINANCIAL RESULTS 1 2Q 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