Allianz Se · XETR:ALV

Allianz — Q2 2016 Earnings Presentation

49 slides from Allianz's earnings presentation, Aug 5, 2016

  1. Slide 1: 2Q 2016 Media conference call

    2Q 2016 Oliver Bäte / Dieter Wemmer Media conference call August 5, 2016

  2. Slide 2: Agenda

    1 1 CEO assessment and outlook Oliver Bäte 2 Group financial results Dieter Wemmer 3 Glossary © Allianz SE 2016 2

  3. Slide 3: CEO assessment and outlook: Solid first half in difficult environment

    CEO assessment and outlook Solid first half in difficult environment Total revenues Operating profit S/h net income in EUR bn in % of full year outlook mid-point in % of full year 2015 6M 16 64.8 49% 50% 6M 15 67.9  Total revenues down 4.7%  Operating profit at EUR 5.1bn  S/h net income at EUR 3.

  4. Slide 4: Group financial results

    2 1 CEO assessment and outlook Oliver Bäte 2 Group financial results Dieter Wemmer 3 Glossary © Allianz SE 2016 4

  5. Slide 5: Group: solid first half in volatile environment

    Group financial results 2Q 2016 Group: solid first half in volatile environment Group P/C L/H AM AM Total revenues (EUR bn) vs. prior year 64.8 (-4.7%) 28.9 (-1.1%) 33.0 (-7.2%) 2.8 (-9.4%) Operating profit (EUR mn) vs. prior year 5,1091 (-10.3%) 2,539 (-16.2%) 1,9361 (-1.0%) 961 (-9.3%) S/h net inc

  6. Slide 6: Group: solid first half in volatile environment comments

    Group financial results 2Q 2016 Group: solid first half in volatile environment Comments  Revenues – selected growth  L/H – excellent Revenues driven by strategic product shift Strategic product shift results in significant in L/H (reduction of traditional product improvement of NBM. Operating pro

  7. Slide 7: Group: lackluster result overshadows strategic progress

    Group financial results 2Q 2016 Group: lackluster result overshadows strategic progress Total revenues Operating profit drivers (EUR mn) (EUR bn) -2.5%1 -17.2% 2,842 30.2 29.4 +156 +28 2,353 -7 -20 -646 2Q 15 2Q 16 Shareholders’ net income (EUR mn) -46.0% Operating P/C L/H AM CO Conso. Operating pro

  8. Slide 8: Group: lackluster result overshadows strategic progress comments

    Group financial results 2Q 2016 Group: lackluster result overshadows strategic progress Comments  Revenues – internal growth of +0.4%  Asset Management – back on track Internal growth in P/C accelerates to +3.7%. Adjusted for F/X effects operating profit stable L/H shows good growth in capital-eff

  9. Slide 9: Group: balance sheet in good shape

    Group financial results 2Q 2016 Group: balance sheet in good shape Shareholders’ equity Key sensitivities (EUR bn) (EUR bn) +0.5% Equity -30% -2.7 67.4 67.7 markets 63.1 Unrealized 13.8 16.6 +50bps -3.3 10.9 Interest gains/losses1 rate Retained earnings2 23.3 24.7 22.2 -50bps +3.1 on gov. bonds -4.0

  10. Slide 10: Group: balance sheet in good shape comments

    Group financial results 2Q 2016 Group: balance sheet in good shape Comments  Shareholders’ equity further up  Sensitivities – basically unchanged In 2Q 2016, net income (EUR 1.1bn), The sensitivity to a 50bps decrease of interest higher net unrealized gains (EUR 2.8bn) rates remained at -12%-p. Cr

  11. Slide 11: Group: solid pre-tax operating capital generation

    Group financial results 2Q 2016 Group: solid pre-tax operating capital generation 72.7 +1.7 0.0 +0.3 70.6 69.3 0.0 -0.7 +1.2 +0.4 +0.5 +0.2 +0.5 0.0 -0.5 -0.7 P/C AM Own funds L/H CO/Conso. (EUR bn) 31.12.15 31.03.16 Regulatory / Operating SII Market Dividends / Other 30.06.16 model changes earnings

  12. Slide 12: Group: solid pre-tax operating capital generation comments

    Group financial results 2Q 2016 Group: solid pre-tax operating capital generation Comments  Sale of Korea not considered  Market impact The expected positive effect of the sale of Conservative positioning in preparation for our Korean life entity on our SII ratio and its a potential Brexit helped

  13. Slide 13: P/C: internal growth accelerates to +3.7% in 2Q

    Group financial results 2Q 2016 P/C: internal growth accelerates to +3.7% in 2Q (EUR mn) 2Q 2016 Revenues Total Internal Price Volume growth growth effect effect Δ p.y. Δ p.y. Total P/C segment 11,611 -2.0% +3.7% +0.7% +3.0% Large OEs Germany 1,811 +3.2% +3.2% Italy 1,147 -4.7% -4.7% France 947 +3.7

  14. Slide 14: P/C: internal growth accelerates to +3.7% in 2Q comments

    Group financial results 2Q 2016 P/C: internal growth accelerates to +3.7% in 2Q Comments  Strong growth continues  AGCS – profitability over volume Internal growth of +3.7% driven by volume Re-underwriting initiatives impact top-line. (+3.0%) and price (+0.7%). F/X -3.8% and de-  AWP – accelerati

  15. Slide 15: P/C: underwriting result suffers from NatCat, weather & large losses

    Group financial results 2Q 2016 P/C: underwriting result suffers from NatCat, weather & large losses Operating profit drivers (EUR mn) Combined ratio (in %) -37.0% NatCat impact2 (in %-p) 1,745 +2.9%-p 93.5 96.4 -345 1,099 -77 -225 Loss ratio 65.7 68.1 1.1 4.4 Expense ratio 27.8 28.4 Operating Under

  16. Slide 16: P/C: underwriting result suffers from NatCat comments

    Group financial results 2Q 2016 P/C: underwriting result suffers from NatCat, weather & large losses Comments  Operating profit – strong NatCat impact  Run-off – very high and non-repetition of FFIC net gain Very high at EUR 750mn/6.5% with OP EUR -0.6bn lower driven by higher contribution spread

  17. Slide 17: P/C: high NatCat impact in many flagship OEs

    Group financial results 2Q 2016 P/C: high NatCat impact in many flagship OEs (EUR mn) 2Q 2016 Operating Δ p.y. Combined Δ p.y. NatCat Δ p.y. profit ratio impact in CR1 Total P/C segment 1,099 -37.0% 96.4% +2.9%-p 4.4%-p +3.3%-p Large OEs Germany 126 -67.3% 99.7% +13.4%-p 8.1%-p +8.4%-p Italy 221 -16

  18. Slide 18: P/C: high NatCat impact in many flagship OEs comments

    Group financial results 2Q 2016 P/C: high NatCat impact in many flagship OEs Comments  Germany – high NatCat and large losses  Australia – strong CR improvement AY LR increases +11.7%-p mainly as a result of Lower NatCat and large losses are main higher NatCat and large losses. Adjusted for reason

  19. Slide 19: P/C: interest & similar income lower

    Group financial results 2Q 2016 P/C: interest & similar income lower Operating investment result1,2 Current yield (debt securities; in %) (EUR mn) -9.1% 2Q 15 0.74 843 766 2Q 16 0.67 Total average asset base2,3 114.2 110.9 Reinvestment yield6 (debt securities; in %) (EUR bn) Economic 2Q 15 2.0 2.2 r

  20. Slide 20: P/C: interest & similar income lower comments

    Group financial results 2Q 2016 P/C: interest & similar income lower Comments  Interest and similar income  Economic reinvestment yield Current income down mainly driven by lower Alternative calculation methodology income on debt. This is primarily the result of incorporates long-term F/X costs. l

  21. Slide 21: L/H: new business strategy on track

    Group financial results 2Q 2016 L/H: new business strategy on track PVNBP share by line1 PVNBP by OE1 Operating entity PVNBP in EUR mn (Δ p.y.) NBM (in %) Other OEs Germany Life 1,096 (-10.6%) 3,772 (+18.5%) Total L/H segment 1.5 2.6 Spain 318 (-42.8%) 5.7 5.4 Protection & health 11% 11% Benelux 515

  22. Slide 22: L/H: new business strategy on track comments

    Group financial results 2Q 2016 L/H: new business strategy on track Comments PVNBP share by line PVNBP by OE  Continuing improvement of business mix  GER Life – Protection & health up 30% PVNBP of guaranteed savings & annuities was Market share in risk riders with 28% at new reduced by 24%, wherea

  23. Slide 23: L/H: operating profit strong at EUR billion

    Group financial results 2Q 2016 L/H: operating profit strong at EUR 1 billion (EUR mn) Operating profit by source1 Operating profit by line1 +18.3% +18.3% 1,009 +77 +134 1,009 853 +94 192 853 205 -21 -58 82 -70 94 190 187 545 462 -94 Operating Operating Loadings Investment Expenses Technical Impact

  24. Slide 24: L/H: operating profit strong comments

    Group financial results 2Q 2016 L/H: operating profit strong at EUR 1 billion Comments  Korean 2Q results reclassified  Technical margin – France Total 2Q 2016 result of Korea considered as Lower result from France (EUR -48mn) non-operating since Korea has been classified impacted by one-off charg

  25. Slide 25: L/H: VNB up percent

    Group financial results 2Q 2016 L/H: VNB up 62 percent (EUR mn) 2Q 2016 VNB1 Δ p.y. NBM1 Δ p.y. Operating Δ p.y. profit Total L/H segment 341 +62.2% 2.6% +1.0%-p 1,009 +18.3% Large OEs Germany Life 105 +257.4% 2.8% +1.9%-p 261 +174.1% USA 79 +21.9% 2.3% -0.2%-p 234 -21.3% Italy 36 +24.1% 1.9% +0.8%-

  26. Slide 26: L/H: VNB up percent comments

    Group financial results 2Q 2016 L/H: VNB up 62 percent Comments  Management actions lead to better NBM  Germany Life – better investment margin Impact from business mix change accounts Investment margin improved by EUR 169mn for +0.6%-p. 4th consecutive quarter with due to higher result of fixed i

  27. Slide 27: L/H: healthy investment margin of 25bps

    Group financial results 2Q 2016 L/H: healthy investment margin of 25bps (yields are pro-rata) Reinvestment yield1,6 Based on Ø book value of assets2 2Q 151 2Q 161 (debt securities; in %) Current yield3 1.0% 0.9% Economic reinvestment yield Based on Ø aggregate policy reserves 2.8 2.3 Current yield3

  28. Slide 28: L/H: healthy investment margin comments

    Group financial results 2Q 2016 L/H: healthy investment margin of 25bps Comments  Current yield decline as expected  Investment margin > EUR 1bn Current yield based on aggregate policy 3% higher reserve base and 5% better reserves down 10bps due to lower income investment margin lead to a plus of

  29. Slide 29: AM: 3rd party AuM up percent

    Group financial results 2Q 2016 AM: 3rd party AuM up 5 percent (EUR bn) ∆ total AuM +3.8% +4.6% 1,830 1,763 1,750 +5.2% Allianz Group 487 524 assets 507 +2.5% 1,307 +2.3% 1,242 +1.9% -0.1% -1.4% 3rd party AuM 1,276 1,242 1,307 31.12.15 31.03.16 30.06.16 31.03.16 Net flows Market & F/X Other 30.06.16

  30. Slide 30: AM: 3rd party AuM up percent comments

    Group financial results 2Q 2016 AM: 3rd party AuM up 5 percent Comments  Segment – 3rd party AuM up 5%  PIMCO – net outflows Increase driven by first time consolidation 3rd party net outflows (EUR 18bn) reduced of Rogge Global Partners, appreciation of versus 2Q 2015 (EUR 29bn), but increased the

  31. Slide 31: AM: 2Q margin below PY, but slightly better than in 1Q

    Group financial results 2Q 2016 AM: 2Q margin below PY, but slightly better than in 1Q 2016 (EUR mn) Revenues development1 Internal growth PIMCO3 Internal growth -7.0% -5.8% -8.9% -7.1% 1,548 1,108 24 1,010 Performance fees 52 1,440 35 Other net fee and 74 commission income (AuM driven fees) 39.6 38

  32. Slide 32: AM: 2Q margin comments

    Group financial results 2Q 2016 AM: 2Q margin below PY, but slightly better than in 1Q 2016 Comments  Segment – lower operating revenues  PIMCO – 3rd party AuM margin up versus Compared with 2Q 2015, lower average 3rd 1Q 2016 party AuM (-7%) and reduced 3rd party AuM Current margin (38.7 bps) high

  33. Slide 33: AM: stable operating profit

    Group financial results 2Q 2016 AM: stable operating profit Internal growth Operating profit drivers (EUR mn) -0.1% CIR -1.4% 5051 +30 4981 364 +57 AllianzGI +12 -2 AllianzGI 139 +24 -8 137 68.7% -66 69.4% -53 PIMCO PIMCO 396 2,740 64.3% 384 62.0% Operating Revenues Expenses F/X Operating profit Per

  34. Slide 34: AM: stable operating profit comments

    Group financial results 2Q 2016 AM: stable operating profit Comments  Segment – OP 8% above 1Q 2016  AllianzGI – OP 15% above 1Q 2016 OP 8% above level in 1Q 2016 and, F/X OP significantly better than in previous quarter, adjusted, 0.2% higher than in 2Q 2015. which was adversely impacted by turbu

  35. Slide 35: CO: operating result in line with expectations

    Group financial results 2Q 2016 CO: operating result in line with expectations (EUR mn) Operating loss development and components +3 -230 0 -14 -8 -249 +8.5% Operating Holding & Banking Alternative Consoli- Operating result Treasury Investments dation result 2Q 15 2Q 16 Δ 2Q 16/15 © Allianz SE 2016

  36. Slide 36: CO: operating result comments

    Group financial results 2Q 2016 CO: operating result in line with expectations Comments  Operating profit 1H result, adjusted for one-offs, leaves us fully in line with full year outlook.  Holding &Treasury – slightly down Main drivers are slightly higher administrative expenses and a lower net in

  37. Slide 37: Group: shareholders' net income and non-operating result

    Group financial results 2Q 2016 Group: shareholders’ net income and non-operating result (EUR mn) Total impact Korea on net income: EUR -352mn 2Q 15 2Q 16 Change Operating profit 2,842 2,353 -489 Non-operating items 137 -573 -710 Realized gains/losses (net) 424 267 5 -157 Impairments (net) -43 -383

  38. Slide 38: Group: shareholders' net income and non-operating result comments

    Group financial results 2Q 2016 Group: shareholders’ net income and non-operating result Comments  Korea distorts result  Tax rate Following the sales-agreement for our Lower tax exempt capital gains and higher non- Korean Life Insurance subsidiary tax deductible equity impairments than in (subjec

  39. Slide 39: Status quo and ambitions for 2018

    Group financial results 2Q 2016 Status quo and ambitions for 2018 6M 16 2018 6M 16 2018 Businesses with -0.8%1 5%1 EPS Growth 50%5 75% NPS above market 12.0%2 13% SII interest rate 12%-p <11%-p RoE Allianz Group sensitivity 94.9% 94% P/C CR PIMCO CIR 63.1% 60% L/H OEs with 34%2,3 100% IMIX 68%5 72%

  40. Slide 40: Glossary

    3 1 CEO assessment and outlook Oliver Bäte 2 Group financial results Dieter Wemmer 3 Glossary © Allianz SE 2016 40

  41. Slide 41: Glossary (1)

    Glossary (1) AFS Available-for-sale: Securities 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 Allianz Global Investors AM Asset Ma

  42. Slide 42: Glossary (2)

    Glossary (2) CIR Cost-income ratio: Operating expenses divided by operating revenues CO Corporate and Other – CO segment CR Combined ratio: Represents the total of acquisition and administrative expenses (net), excluding one-off effects from pension revaluation, and claims and insurance benefits inc

  43. Slide 43: Glossary (3)

    Glossary (3) FV Fair value: The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FVO Fair value option: Financial assets and liabilities designated at fair value through income are measured at

  44. Slide 44: Glossary (4)

    Glossary (4) L/H Life and health insurance – L/H segment L/H lines of business Guaranteed savings & annuities: Guaranteed savings and annuities are life insurance obligations that always relate to the length of human life. Life obligations may be related to guarantees offering life and / or death co

  45. Slide 45: Glossary (5)

    Glossary (5) LatAm Latin America: South America and Mexico LoB Line of business LR Loss ratio: Claims and insurance benefits incurred (net) divided by premiums earned (net). Loss ratio calendar year (c.y.) includes the results of the prior year reserve development in contrast to the loss ratio accid

  46. Slide 46: Glossary (6)

    Glossary (6) OP Operating profit: Earnings from ordinary activities before income taxes and non-controlling interests in earnings, excluding, as applicable for each respective segment, all or some of the following items: Income from financial assets and liabilities carried at fair value (net), reali

  47. Slide 47: Glossary (7)

    Glossary (7) RoE Return on equity Group: Represents net income attributable to shareholders divided by the average shareholders’ equity excluding unrealized gains/losses on bonds (net of shadow DAC) at the beginning and at the end of the period. Return on equity L/H OE: Represents net income divided

  48. Slide 48: Glossary (8)

    Glossary (8) UFR Ultimate forward rate: The estimate of the ultimate forward rate is defined in line with the EIOPA methodology and guidelines. An extrapolation is needed past last available market data points. The UFR is determined for each currency using macro-economic methods, the most important

  49. Slide 49: 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 other forward

Allianz — Q2 2016 Earnings Presentation on 6ix