Allianz Se · XETR:ALV
Allianz — Q1 2020 Earnings Presentation
52 slides from Allianz's earnings presentation, May 12, 2020
Slide 1: 1Q 2020 Analyst conference call
1Q 2020 Giulio Terzariol Chief Financial Officer Analyst conference call May 12, 2020
Slide 2: Content
CONTENT GROUP FINANCIAL RESULTS 1 1Q 2020 2 ADDITIONAL INFORMATION GLOSSARY DISCLAIMER © Allianz SE 2020
Slide 3: Group: good underlying result, negative impact from COVID-19
Group financial results 1Q 2020 Group: good underlying result, negative impact from COVID-19 Total revenues (EUR bn) Operating profit drivers (EUR mn) +5.7% -22.2% +3.7% Internal growth 2,962 40.3 42.6 +106 2,304 -423 -277 -63 -2 COVID-19 1Q 19 1Q 20 -0.4 -0.3 – – – -0.7 impact (bn) Shareholders’ ne
Slide 4: Group: good underlying result, negative impact from COVID-19 - comments
Group financial results 1Q 2020 Group: good underlying result, negative impact from COVID-19 Comments • Internal growth good at 3.7% • P/C – NatCat and COVID-19 Strong internal growth in AM (+9.7%) and L/H (+5.1%). OP declines mainly due to a lower underwriting Internal growth in P/C slows down to 1
Slide 5: Group: Solvency II ratio on good level
Group financial results 1Q 2020 Group: Solvency II ratio on good level Shareholders’ equity (EUR bn) Key sensitivities (EUR bn) -6.2% Equity markets -30% -3.5 74.0 69.4 Unrealized +50bps -4.9 17.7 11.7 gains/losses1 Interest rate Retained earnings2 27.4 28.8 -50bps +4.7 Paid in capital 28.9 28.9 on
Slide 6: Group: Solvency II ratio on good level - comments
Group financial results 1Q 2020 Group: Solvency II ratio on good level Comments • Shareholders’ equity – EUR 4.6bn decrease in • SII ratio – on a good level 1Q 2020 In 1Q 2020, our SII ratio declines versus FY 2019 In 1Q 2020, shareholders’ equity decreased by driven by a reduction in own funds and
Slide 7: Group: very negative market impact
Group financial results 1Q 2020 Group: very negative market impact Own funds +2.3 84.0 (EUR bn) -0.4 +2.0 78.1 +1.3 -7.9 +0.7 -1.8 +0.6 -0.4 P/C AM L/H CO/Conso. 31.12.19 Regulatory/ Operating SII Market Capital mgmt./ Tax/ 31.03.20 model changes earnings impact management other actions SII capitali
Slide 8: Group: very negative market impact - comments
Group financial results 1Q 2020 Group: very negative market impact Comments • SII capital generation • Business evolution SII capital generation – net of tax and dividend – P/C growth is the main driver. L/H new business amounts to ~2%-p in 1Q 2020. We anticipate a capital consumption is more than o
Slide 9: P/C: good price-driven growth, lower volume
Group financial results 1Q 2020 P/C: good price-driven growth, lower volume EUR mn Revenues YTD change on renewals 1Q 20 Total growth Internal growth 1Q 20 Momentum ∆ p.y. ∆ p.y. Total P/C segment 20,315 +4.2% +1.8% +3.9% n.a. Selected OEs Germany 4,762 +0.7% +0.7% +2.7% stable France 1,528 0.0% 0.0
Slide 10: P/C: good price-driven growth, lower volume - comments
Group financial results 1Q 2020 P/C: good price-driven growth, lower volume Comments • Growth impacted by COVID-19-related restrictions • Italy – volume and price lower Internal growth of +1.8%, with a positive price effect COVID-19 quarantine measures drive decline in MTPL partly offset by lower vo
Slide 11: P/C: a tough quarter
Group financial results 1Q 2020 P/C: a tough quarter Operating profit drivers (EUR mn) Combined ratio (in %) -29.1% +4.1%-p 1,455 97.8 93.7 +123 1,032 Loss ratio 65.9 70.4 -479 NatCat impact2 -66 1.1 3.6 (in %-p) Expense ratio 27.8 27.3 1Q 19 1Q 20 Operating Underwriting Investment1 Other Operating
Slide 12: P/C: a tough quarter - comments
Group financial results 1Q 2020 P/C: a tough quarter Comments • Operating profit – impacted by NatCat and COVID-19 • Run-off – on normal level OP of EUR 1.0bn well below prior year (∆ EUR -0.4bn). Run-off of 2.7% below 1Q 2019 level of 3.2% Main drivers are higher NatCat (∆ EUR 0.3bn) and (∆ -0.5%-p
Slide 13: P/C: widespread NatCat and COVID-19 impacts
Group financial results 1Q 2020 P/C: widespread NatCat and COVID-19 impacts EUR mn Operating profit Combined ratio NatCat impact on CR 1Q 20 ∆ p.y. 1Q 20 ∆ p.y. 1Q 20 ∆ p.y. Total P/C segment 1,032 -29.1% 97.8% +4.1%-p 3.6%-p +2.5%-p Selected OEs Germany 291 +7.7% 96.7% +3.9%-p 4.7%-p +1.5%-p France
Slide 14: P/C: widespread NatCat and COVID-19 impacts - comments
Group financial results 1Q 2020 P/C: widespread NatCat and COVID-19 impacts Comments • Germany – underlying improvements • Australia – strong NatCat impact CR primarily higher on increased AY LR (∆ +3.2%-p). Attritional LR improves by 4.6%-p. AY LR development driven by COVID-19 impact • Turkey – a
Slide 15: P/C: interest & similar income resilient, net harvesting & other down
Group financial results 1Q 2020 P/C: interest & similar income resilient, net harvesting & other down Operating investment result1 Current yield Economic reinvestment yield (EUR mn) (debt securities; in %) (debt securities; in %) -9.3% 0.63 1.7 0.59 1.4 711 645 1Q 19 1Q 20 1Q 19 1Q 20 1Q 19 1Q 20 To
Slide 16: P/C: interest & similar income resilient - comments
Group financial results 1Q 2020 P/C: interest & similar income resilient, net harvesting & other down Comments • Interest & similar income • Reinvestment yield Lower income from fixed income partly offset by Decline in reinvestment yield vs 1Q 2019 driven by real estate and alternatives. market move
Slide 17: L/H: new business margin solid at 2.7%
Group financial results 1Q 2020 L/H: new business margin solid at 2.7% PVNBP share by line PVNBP by OE (EUR mn) Other OEs Germany Life Total L/H segment 3.5 2.7 1,138 (-23.8%) 6,478 (+5.3%) USA Protection & health 2,673 (-1.4%) 3.9 20% 23% 3.3 Asia Pacific Unit-linked 1,376 (+11.6%) w/o guarantees 2
Slide 18: L/H: new business margin solid at 2.7% - comments
Group financial results 1Q 2020 L/H: new business margin solid at 2.7% Comments PVNBP by line PVNBP by OE • Preferred lines of business grow 18% • Germany Life – share of preferred lines at 85% New business volume in 1Q 2020 only marginally Capital-efficient business up 23%, P&H grows by 9%. affecte
Slide 19: L/H: operating profit affected by capital market turbulences
Group financial results 1Q 2020 L/H: operating profit affected by capital market turbulences (EUR mn) Operating profit by source1 Operating profit by line -25.3% -25.3% +57 1,096 1,096 +112 204 -135 819 819 -144 134 -168 190 170 120 98 588 410 Operating Loadings Investment Expenses Technical Impact
Slide 20: L/H: operating profit affected by capital market turbulences - comments
Group financial results 1Q 2020 L/H: operating profit affected by capital market turbulences Comments • OP declines by EUR 277mn Operating profit by line Better technical margin is more than offset by lower • Protection & health investment margin and higher DAC amortization. Decline mainly due to a
Slide 21: L/H: VNB down but still at good level
Group financial results 1Q 2020 L/H: VNB down but still at good level EUR mn Value of new business New business margin Operating profit 1Q 20 ∆ p.y. 1Q 20 ∆ p.y. 1Q 20 ∆ p.y. Total L/H segment 494 -18.9% 2.7% -0.7%-p 819 -25.3% Germany Life 216 -11.0% 3.3% -0.6%-p 250 -16.6% Asia Pacific 71 -0.4% 5.
Slide 22: L/H: VNB down but still at good level - comments
Group financial results 1Q 2020 L/H: VNB down but still at good level Comments New business Operating profit • NBM with 2.7% at solid level • Germany Life – good level NBM decline mainly due to unfavorable market Less investment margin and higher DAC amortization. movements (-0.9%-p) partially offse
Slide 23: L/H: capital markets volatility weighs on investment margin
Group financial results 1Q 2020 L/H: capital markets volatility weighs on investment margin Investment margin Economic reinvestment yield (debt securities; in %) 1Q 19 1Q 20 1.9 1.6 Based on Ø book value of assets1 (EUR bn) 552 605 Current yield 0.80% 0.77% Based on Ø aggregate policy reserves (EUR
Slide 24: L/H: capital markets volatility weighs on investment margin - comments
Group financial results 1Q 2020 L/H: capital markets volatility weighs on investment margin Comments • Investment margin declines by EUR -135mn • Investment margin at 15bps Lower investment margin (∆ -4bps to 15bps) partially Lower gross investment margin and higher PHP lead offset by higher reserve
Slide 25: AM: EUR 2.1tn total AuM
Group financial results 1Q 2020 AM: EUR 2.1tn total AuM (EUR bn) Total assets under management 3rd party AuM split -5.9% Asset classes Regions Multi-assets Europe 2,268 2,134 EUR 137bn (-14.4%) EUR 486bn (-13.7%) Equities Asia Pacific Allianz Group 582 EUR 117bn (-19.4%) EUR 181bn (-4.1%) assets -0.
Slide 26: AM: EUR 2.1tn total AuM - comments
Group financial results 1Q 2020 AM: EUR 2.1tn total AuM Comments • Total AuM: -6% • Business highlights Decrease to EUR 2.1tn driven by 3rd party assets. After the transfer of Allianz Real Estate with a Supportive F/X effects do not compensate for adverse property portfolio of more than EUR 70bn, PI
Slide 27: AM: 3rd party AuM down driven by markets
Group financial results 1Q 2020 AM: 3rd party AuM down driven by markets (EUR bn) 3rd party assets under management development 3rd party net flow split -7.6% Asset Fixed income -44.1 1,686 classes Equities +0.5 -3.4 +25.1 1,557 -43.0 Multi-assets -3.7 -107.6 Alternatives +0.9 Regions America -27.4
Slide 28: AM: 3rd party AuM down driven by markets - comments
Group financial results 1Q 2020 AM: 3rd party AuM down driven by markets Comments • 3rd party AuM: -8% • 3rd party net flows PIMCO: EUR -43bn Decrease driven by capital markets and 3rd party After EUR 83bn 3rd party net inflows in FY 2019, net outflows; F/X effects contribute positively net inflows
Slide 29: AM: revenues up 12%
Group financial results 1Q 2020 AM: revenues up 12% (EUR mn) Revenues development PIMCO AllianzGI +12.5% +18.4% -1.1% Internal growth +9.7% +15.0% -2.3% 1,773 1,318 30 1,576 11 465 460 Performance fees 25 50 1,113 19 AuM driven & other revenues1 26 1,526 1,744 1,087 1,307 441 442 © Allianz SE 2020 3
Slide 30: AM: revenues up 12% - comments
Group financial results 1Q 2020 AM: revenues up 12% Comments • Segment revenues – higher AuM driven revenues • PIMCO margin and favorable F/X Margin at 37.3bps (1Q 2019: 36.1bps). Increase of Revenues increase by 12% due to higher average 1.2bps mainly due to non-repetition of one-off 3rd party AuM
Slide 31: AM: OP increases 19%
Group financial results 1Q 2020 AM: OP increases 19% (EUR mn) Operating profit drivers PIMCO +18.6% +23.5% +15.7% Internal growth 559 +154 6791 452 +16 5731 8 Performance fee impact2 -63 OP excl. performance 59.4 57.6 CIR (in %) 19 fee impact2 554 +21.1% 671 1Q 19 1Q 20 63.7 61.7 CIR (in %) Operatin
Slide 32: AM: OP increases 19% - comments
Group financial results 1Q 2020 AM: OP increases 19% Comments • Segment – OP increases 19% • PIMCO – OP up 24% Higher average 3rd party AuM / AuM driven revenues, Increase predominantly driven by higher average supportive F/X and a moderate increase in expenses 3rd party AuM / higher AuM driven reve
Slide 33: CO: in line with expectations
Group financial results 1Q 2020 CO: in line with expectations (EUR mn) Operating loss development and components -164 +1 -60 -2 -2 -228 +38.4% Operating Holding & Banking Alternative Consoli- Operating result Treasury Investments dation result 1Q 19 1Q 20 ∆ 1Q 20/19 © Allianz SE 2020 1Q 20 -247 10 9
Slide 34: CO: in line with expectations - comments
Group financial results 1Q 2020 CO: in line with expectations Comments • Operating loss at EUR -0.2bn Operating loss slightly above normal run rate due to a negative F/X impact and a donation to a COVID-19 solidarity fund – all reflected in result from Holding & Treasury. © Allianz SE 2020 34
Slide 35: Group: shareholders' net income at EUR 1.4bn
Group financial results 1Q 2020 Group: shareholders’ net income at EUR 1.4bn EUR mn 1Q 19 1Q 20 Change Operating profit 2,962 2,304 -658 Non-operating items -235 -412 -177 Realized gains/losses (net) 110 448 +339 Impairments (net) -65 -509 -444 Income from financial assets and liabilities carried at
Slide 36: Group: shareholders' net income at EUR 1.4bn - comments
Group financial results 1Q 2020 Group: shareholders’ net income at EUR 1.4bn Comments • Shareholders’ net income down by EUR 0.6bn • Interest expenses from external debt Decline due to lower operating and non-operating profit. Lower interest expenses mainly as a result of lower Support from lower ta
Slide 37: Summary: robust performance in challenging environment
Group financial results 1Q 2020 Summary: robust performance in challenging environment 43bn 2.3bn 4.0bn Facts Revenues Operating profit Dividend paid and figures 1Q 2020 (EUR) 1.4bn 190% 750mn Shareholders' Solvency II ratio Share buy-back net income © Allianz SE 2020 37
Slide 38: Content
CONTENT GROUP FINANCIAL RESULTS 1 1Q 2020 2 ADDITIONAL INFORMATION GLOSSARY DISCLAIMER © Allianz SE 2020
Slide 39: Investments: well balanced with high quality
Group financial results 1Q 2020 – additional information Investments: well balanced with high quality 1Q 20 26% Allianz Group • 27% of debt portfolio 19% • Diversified investment portfolio BBB rated EUR 754bn (2019) BBB 33% • Managed mainly by PIMCO credit • 82% held in L/H EUR 1Q 20 • Low share in
Slide 40: ESG at Allianz (1/3)
Group financial results 1Q 2020 – additional information ESG at Allianz (1/3) Ratings & commitments Governance ESG ratings ESG Board 2018 2019 Defines ESG standards, decides on ESG relevant business SAM Industry leader Industry leader 3 members of Group Board of Management, responsible for ESG topic
Slide 41: ESG at Allianz (2/3)
Group financial results 1Q 2020 – additional information ESG at Allianz (2/3) Insurance Investments Revenues from sustainable solutions 3rd party sustainable investments EUR mn 2018 2019 EUR bn 2018 2019 Sustainable insurance solutions 881.0 927.8 Allianz Global Investors 40.9 56.1 Insurance solutio
Slide 42: ESG at Allianz (3/3)
Group financial results 1Q 2020 – additional information ESG at Allianz (3/3) Human resources Footprint Diversity Greenhouse gas emissions Share of total employees – core business 2018 2019 2018 2019 Women in Allianz SE Supervisory Board 33.3% 33.3% Scope 1 – direct GHG emissions (t CO2) 46,734 42,0
Slide 43: Glossary & Disclaimer
GLOSSARY & DISCLAIMER © Allianz SE 2020
Slide 44: Glossary (1)
Glossary Glossary (1) AFS Available for sale: Available-for-sale investments are non-derivative financial assets which have been acquired neither for sale in the near term nor to be held to maturity. They are shown at fair value on the balance sheet. AGCS Allianz Global Corporate & Specialty Allianz
Slide 45: Glossary (2)
Glossary Glossary (2) Bps Basis points: 1 Basis point = 0.01%. CEE Central and Eastern Europe CIR Cost-income ratio: Operating expenses divided by operating revenues CO (The Allianz business segment) Corporate and Other CR Combined ratio: Represents the total of acquisition and administrative expens
Slide 46: Glossary (3)
Glossary Glossary (3) FIA Fixed index annuity: Annuity contract under which the policyholder can elect to be credited based on movements in equity or in bond market indices, with the principal remaining protected. FV Fair value: The price that would be received to sell an asset or paid to transfer a
Slide 47: Glossary (4)
Glossary Glossary (4) L/H (The Allianz business segment) Life and Health insurance L/H lines of business Guaranteed savings & annuities: Life insurance products linked to life expectancy, offering life and / or death benefits in the form of single or multiple payments to beneficiaries and possibly i
Slide 48: Glossary (5)
Glossary Glossary (5) LoB Line of business LR Loss ratio: Represents claims and insurance benefits incurred (net), divided by premiums earned (net). The calendar year (CY) loss ratio includes the results of the prior year’s reserve development in addition to the accident year (AY) loss ratio. MCEV M
Slide 49: Glossary (6)
Glossary Glossary (6) Operating SII earnings Operating SII earnings represent the change in own funds, before tax and dividend accrual, that is attributable to the Allianz Group’s ongoing core operations. As such, operating SII earnings comprise: expected return from existing business, new business
Slide 50: Glossary (7)
Glossary Glossary (7) Reinsurance Insurance companies transfer parts of the insurance risk they have assumed to reinsurance companies. Retained earnings In addition to the reserve legally required in the group parent company’s financial statements, this item mainly comprises the undistributed profit
Slide 51: Glossary (8)
Glossary Glossary (8) Statutory premiums Gross premiums written from the sales of life and health insurance policies, as well as gross receipts from sales of unit-linked and other investment-related products, in accordance with the statutory accounting principles applicable in the insurer’s home jur
Slide 52: Disclaimer
Disclaimer Disclaimer This document includes forward-looking statements, such as prospects or (viii) currency exchange rates, most notably the EUR/USD exchange rate, (ix) expectations, that are based on management's current views and changes in laws and regulations, including tax regulations, (x) th