Allianz SE · XETR:ALV
Allianz — Q3 2014 Earnings Presentation
53 slides from Allianz's earnings presentation, Nov 7, 2014
Slide 1: Group financial results 3Q 2014
Group financial results 3Q 2014 Dieter Wemmer Chief Financial Officer Press conference call November 7, 2014
Slide 2: Agenda
1 1 Highlights Group financial results 3Q 2014 2 Additional information a) Group b) Property-Casualty c) Life/Health d) Asset Management e) Corporate and Other 3 Glossary © Allianz SE 2014 2
Slide 3: Business highlights from the third quarter of 2014
Group financial results 3Q 2014 Business highlights from the third quarter of 2014 Germany: More than 48,000 policies sold since launch of cooperation with Media-Saturn in September to offer device repair cost insurance “PlusSchutz” Property-Casualty Italy: More than 1.5 million quotes requested
Slide 4: Double digit revenue and net income growth
Group financial results 3Q 2014 Double digit revenue and net income growth Total revenues (EUR bn) Operating profit drivers2 (EUR mn) +14.5%1 +5.2% 25.1 28.8 +187 +22 +2 2,650 2,518 -61 -19 3Q 13 3Q 14 Net income3 (EUR mn) +11.2% Operating P/C L/H AM CO Conso. Operating 1,606 profit profit 1,445 3Q
Slide 5: Shareholders' equity at new high
Group financial results 3Q 2014 Shareholders’ equity at new high Shareholders’ equity (EUR mn) Conglomerate solvency1,2 (%) +16.2% +3%-p 58,199 185% 184% 54,979 182% 50,083 31.12.13 30.06.14 30.09.14 31.12.13 30.06.14 30.09.14 Economic solvency2 (%) S&P capital adequacy +8%-p Allianz’ rating at “AA”
Slide 6: Strong internal growth of 4.7 percent
Group financial results 3Q 2014 Strong internal growth of 4.7 percent (EUR mn) 3Q 2014 Revenues Total Internal Price Volume growth growth1 effect effect Δ p.y. Δ p.y. Total P/C segment 11,254 +5.7% +4.7% +0.8% +4.0% Large OEs Germany 1,979 +5.0% +4.1% France 962 -0.1% -0.1% Italy 933 +9.4% -0.6% Glo
Slide 7: Absence of cat losses drives underwriting result
Group financial results 3Q 2014 Absence of cat losses drives underwriting result Operating profit drivers (EUR mn) Combined ratio (in %) +15.2% NatCat impact1 (in %-p) +52 1,422 +150 -1.3%-p 1,235 -14 94.8 93.5 Loss ratio 67.2 65.9 4.3 0.1 Expense ratio 27.6 27.6 Operating Underwriting Investment Ot
Slide 8: Germany and France drive operating profit growth
Group financial results 3Q 2014 Germany and France drive 15 percent operating profit growth (EUR mn) 3Q 2014 Operating Δ p.y. Combined Δ p.y. NatCat Δ p.y.1 profit ratio impact in CR1 Total P/C segment 1,422 +15.2% 93.5% -1.3%-p 0.1%-p -4.2%-p Large OEs Germany 350 n.m.2 90.3% -14.9%-p 0.1%-p -13.9%
Slide 9: Future improvement potential as underperforming units are being addressed
Group financial results 3Q 2014 Future improvement potential as underperforming units are being addressed1 Combined ratio < 95% > 95% <100% > 100% Key contributors Germany UK FFIC CR of 91.0% well ahead of CR 96.8%. Strong internal CR 123.4%. Extensive 95% FY 2014 target. growth of 12.4% restr
Slide 10: Interest income holding up well
Group financial results 3Q 2014 Interest income holding up well Operating investment result Current yield (debt securities; in %) (EUR mn) +7.3% 3Q 13 0.81 718 770 3Q 14 0.78 Total average asset base1 103.0 105.4 (EUR bn) Reinvestment yield4 (debt securities; in %) 3Q 13 3Q 14 3Q 13 2.4 Interest & 8
Slide 11: High growth continues
Group financial results 3Q 2014 High growth continues… (EUR mn) 3Q 2014 Revenues Total Internal PVNBP2 Δ p.y. growth growth1 Δ p.y. Δ p.y. Total L/H segment 15,853 +24.9% +25.0% 12,384 +35.0% Large OEs Germany Life 4,292 +4.0% +4.0% 3,091 +12.3% USA 2,901 +73.5% +73.7% 3,029 +86.8% Italy 2,789 +76.7
Slide 12: ...and profit targets are met
Group financial results 3Q 2014 …and profit targets are met PVNBP (EUR bn) Reserves (EUR bn) CAGR CAGR +17% +8% 469.9 434.9 413.0 42.0 90.8 81.1 Unit-linked reserves 71.2 33.5 30.6 Aggregate policy 341.8 353.8 379.1 reserves NBM 1.7% 1.9% 2.5% Net flows (EUR bn) -0.1 9.0 13.31 9M 12 9M 13 9M 14 2012
Slide 13: Operating profit at solid level
Group financial results 3Q 2014 Operating profit at solid level (EUR mn) Operating profit by sources1,2 Operating profit by line2 +2.8% +2.8% +165 +125 769 +6 790 769 790 Transfer -228 22 from AM 30 -47 74 Thereof, EUR 22mn 225 182 transfer from AM 768 514 535 Operating Loadings Investment Expenses
Slide 14: Value of new business up
Group financial results 3Q 2014 Value of new business up 36 percent (EUR mn) 3Q 2014 VNB1 Δ p.y. NBM1 Δ p.y. Operating Δ p.y. profit Total L/H segment2 293 +36.5% 2.4% +0.0%-p 790 +2.8% Large OEs Germany Life 75 -0.5% 2.4% -0.3%-p 218 +24.6% USA 96 +56.2% 3.2% -0.6%-p 158 -14.1% Italy 31 +72.6% 1.6%
Slide 15: Margin at strong level of 19bps
Group financial results 3Q 2014 Margin at strong level of 19bps (yields are pro-rata) Based on Ø book value of assets1 3Q 13 3Q 14 Reinvestment yield5 (debt securities; in %) Current yield2 1.0% 0.9% 3.3 Based on Ø aggregate policy reserves 2.7 Current yield2 1.2% 1.1% Net harvesting and other -0.1%
Slide 16: AuM benefit from USD exchange rate
Group financial results 3Q 2014 AuM benefit from USD exchange rate (EUR bn) ∆ total AuM +7.7% +2.8% +3.2% 1,814 1,872 1,738 441 461 Allianz Group 409 +0.1% +6.4% +0.1% assets -3.6% -0.3% 3rd party AuM 1,329 1,373 1,411 1,373 1,411 31.12.13 1 30.06.14 30.09.14 30.06.14 Net flows Market F/X Conso. 30.
Slide 17: Revenues decline 2.6 percent
Group financial results 3Q 2014 Revenues decline 2.6 percent Revenues development1 Internal growth PIMCO Internal growth (EUR mn) -2.5% -5.9% -5.9% -2.6% 1,325 1,247 25 1,703 25 1,661 1,618 42 41 40 42.7 41.6 Performance fees 1,300 1,221 Other net fee and commission income 3Q 13 3Q 14 (AuM driven fe
Slide 18: Operating profit at target
Group financial results 3Q 2014 Operating profit at target Internal growth Operating profit drivers (EUR mn) -5.0% -5.0% AllianzGI 7551 7311 +7 +12 0 6941 AllianzGI 71.0% 99 99 -24 -47 -1 -7 -1 110 70.8% PIMCO PIMCO 51.3% 645 645 594 52.4% Operating Operating Revenues Expenses F/X Operating profit T
Slide 19: Operating result ahead of target
Group financial results 3Q 2014 Operating result ahead of target (EUR mn) Operating loss development and components +7 +3 0 -229 -248 -29 -8.1% Operating Holding & Banking1 Alternative Consoli- Operating result Treasury Investments dation result 3Q 13 3Q 14 © Allianz SE 2014 Δ 3Q 14/13 3Q 14 -267 11
Slide 20: Shareholders' net income up
Group financial results 3Q 2014 Shareholders’ net income up 11 percent (EUR mn) 3Q 13 3Q 14 Change Operating profit 2,518 2,650 +132 Non-operating items -242 -331 -89 Realized gains/losses 133 184 +51 Impairments (net) -135 -50 +85 Income from fin. assets and liabilities carried at fair value -1 -54
Slide 21: Summary
Group financial results 3Q 2014 Summary Total revenues at EUR 28.8bn (+14.5%) Outlook1 confirmed: Operating profit outlook EUR 10bn, Operating profit of EUR 2,650mn (+5.2%) +/- 0.5bn Upper end of the Shareholders’ net income of target range in reach EUR 1,606mn (+11.2%) Strong capital and ba
Slide 22: New Dividend Policy going forward
Group financial results 3Q 2014 New Dividend Policy1 going forward Allocation of net income2 2014ff (in %) Regular pay-out ratio of 50% (up from 40%) 50% 1 pay-out Healthy balance between Internal growth 20 20 Budget for dividend yield and internal growth investments in profitable growth External
Slide 23: Additional information: Group
2a 1 Highlights Group financial results 3Q 2014 2 Additional information a) Group b) Property-Casualty c) Life/Health d) Asset Management e) Corporate and Other 3 Glossary © Allianz SE 2014 23
Slide 24: Group: highlights 9M 2014
Group financial results 3Q 2014 – Additional information on Group Group: highlights 9M 2014 2013 2014 2013 2014 9M 9M 9M 9M Group +9.8% P/C +14.0% Total revenues 84.0 92.2 (EUR mn) 4,257 (EUR bn) 3,733 3.4% 0.7% NatCat impact CR 95.0% 93.6% 3.9% 2.8% Run-off ratio Group +6.0% L/H1 +15.8% Operating p
Slide 25: Group: key figures
Group financial results 3Q 2014 – Additional information on Group Group: key figures1 (EUR mn) 1Q 2Q 3Q 4Q 1Q 2Q 3Q Delta 9M 9M Delta 2013 2013 2013 2013 2014 2014 2014 3Q 14/13 2013 2014 9M 14/13 Total revenues (EUR bn) 32.0 26.8 25.1 26.8 34.0 29.5 28.8 +3.6 84.0 92.2 +8.2 - Property-Casualty 15.2
Slide 26: Group: shareholders' equity and stress tests
Group financial results 3Q 2014 – Additional information on Group Group: shareholders’ equity and stress tests Shareholders’ equity1 (EUR mn) Estimation of stress impact3 (EUR bn) +16.2% 58,199 54,979 Equity markets -30% -2.8 50,083 12,380 Unrealized 11,141 Interest rate +100bps -5.6 gains/losses 6,
Slide 27: Group: conglomerate solvency ratio and stress tests
Group financial results 3Q 2014 – Additional information on Group Group: conglomerate solvency ratio and stress tests Conglomerate solvency1,2 (EUR bn) Estimation of stress impact1,2,3 +3%-p Ratio as of 30.09.14 184% 182% 185% 184% Equity markets -30% 173% 48.9 49.8 46.5 Interest rate +100bps 188% I
Slide 28: Group: investment result
Group financial results 3Q 2014 – Additional information on Group Group: investment result (EUR mn) Property-Casualty Life / Health Asset Corporate and Consolidation Group Management Other 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 Operating inves
Slide 29: Group: overview investment portfolio
Group financial results 3Q 2014 – Additional information on Group Group: overview investment portfolio Group investments and loans1,2 Asset allocation as of 30.09.14 (30.09.13) (EUR bn) Real estate3 Cash / Other 2% (2%) 2% (2%) 597.3 Equities Debt 572.9 7% (6%) 90% (90%) 506.8 © Allianz SE 2014 30.0
Slide 30: Additional information: Property-Casualty
2b 1 Highlights Group financial results 3Q 2014 2 Additional information a) Group b) Property-Casualty c) Life/Health d) Asset Management e) Corporate and Other 3 Glossary © Allianz SE 2014 30
Slide 31: P/C: key figures
Group financial results 3Q 2014 – Additional information on Property-Casualty P/C: key figures (EUR mn) 1Q 2Q 3Q 4Q 1Q 2Q 3Q Delta 9M 9M Delta 2013 2013 2013 2013 2014 2014 2014 3Q 14/13 2013 2014 9M 14/13 Gross premiums written (EUR bn) 15.2 10.8 10.7 10.0 15.2 10.8 11.3 +0.6 36.6 37.3 +0.7 Operati
Slide 32: P/C: loss ratio and run-off
Group financial results 3Q 2014 – Additional information on Property-Casualty P/C: loss ratio and run-off (in %) Accident year loss ratio 7-quarter overview accident year loss ratio -3.1%-p 7Q avg. Including NatCat Excluding NatCat 71.5 68.5 73.0 0.1 71.5 4.3 67.5 67.6 69.6 68.5 69.3 67.0 67.2 68.4
Slide 33: P/C: expense ratio
Group financial results 3Q 2014 – Additional information on Property-Casualty P/C: expense ratio (EUR mn) in % of NPE 28.2 28.0 8,861 9,037 6.4 6.6 Admin. expenses 2,060 2,070 7.0 7.0 Other acquisition 2,265 expenses 2,218 14.5 14.6 Commissions 4,712 4,574 © Allianz SE 2014 9M 13 9M 14 33
Slide 34: P/C: average asset base and yields
Group financial results 3Q 2014 – Additional information on Property-Casualty P/C: average asset base and yields Average asset base1 (EUR bn) Current yield2 (in %) Other3 +2.3% Equities Cash Debt securities Equities Debt securities 104.9 102.5 7.9 7.8 5.2 5.1 6.1 4.6 1.24 1.13 0.81 0.78 85.0 85.8 ©
Slide 35: P/C: operating investment result
Group financial results 3Q 2014 – Additional information on Property-Casualty P/C: operating investment result1 (EUR mn) +7.3% 786 783 805 770 762 748 718 in % of NPE 7.4 7.6 6.7 7.4 7.2 7.5 6.9 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2013 2014 +0.2% Interest & similar income2 871 926 876 869 840 922 878 Net harvestin
Slide 36: Additional information: Life/Health
2c 1 Highlights Group financial results 3Q 2014 2 Additional information a) Group b) Property-Casualty c) Life/Health d) Asset Management e) Corporate and Other 3 Glossary © Allianz SE 2014 36
Slide 37: L/H: key figures
Group financial results 3Q 2014 – Additional information on Life/Health L/H: key figures1 (EUR mn) 1Q 2Q 3Q 4Q 1Q 2Q 3Q Delta 9M 9M Delta 2013 2013 2013 2013 2014 2014 2014 3Q 14/13 2013 2014 9M 14/13 Statutory premiums (EUR bn) 14.8 14.1 12.7 15.1 17.2 17.0 15.9 +3.2 41.7 50.0 +8.3 Operating profit
Slide 38: L/H: key metrics
Group financial results 3Q 2014 – Additional information on Life/Health L/H: key metrics New business margin1 Value of new business1 (VNB in % of PV of NB premiums) (EUR mn) 2.6 2.5 2.3 2.4 2.4 1.8 1.7 380 360 310 293 238 1Q 2Q 3Q 4Q 1Q 2Q 3Q 215 190 2013 2014 PV of NB premiums1 (EUR bn) 15.5 13.2 1
Slide 39: L/H: operating asset base
Group financial results 3Q 2014 – Additional information on Life/Health L/H: operating asset base Operating asset base (EUR bn) Net flows (EUR bn) 3Q 13 3Q 14 OAB 529.8 Germany Life +1.0 +0.6 as of 30.06.14 Germany Health +0.1 +0.1 Net flows +3.4 France +0.1 -0.1 Italy +0.4 +1.6 Interest & similar C
Slide 40: L/H: average asset base and yields
Group financial results 3Q 2014 – Additional information on Life/Health L/H: average asset base and yields Average asset base1,2,3 (EUR bn) Current yield2 (in %) +12.2% Other4 Equities Cash 448.6 Debt securities Equities 10.4 Debt securities 8.1 30.8 399.8 9.3 7.3 25.6 1.00 1.02 0.94 0.79 399.4 357.
Slide 41: L/H: operating investment result
Group financial results 3Q 2014 – Additional information on Life/Health L/H: operating investment result1 +14.4% 4,884 4,460 4,571 4,451 4,056 4,207 3,892 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2013 2014 +2.9% Interest & similar income2 4,058 4,348 4,111 4,170 4,135 4,448 4,233 Net harvesting & other3 592 -99 -21 660
Slide 42: Additional information: Asset Management
2d 1 Highlights Group financial results 3Q 2014 2 Additional information a) Group b) Property-Casualty c) Life/Health d) Asset Management e) Corporate and Other 3 Glossary © Allianz SE 2014 42
Slide 43: AM: AAM key figures (1/2)
Group financial results 3Q 2014 – Additional information on Asset Management AM: AAM key figures1 (1/2) (EUR mn) 1Q 2Q 3Q 4Q 1Q 2Q 3Q Delta 9M 9M Delta 2013 2013 2013 2013 2014 2014 2014 3Q 14/13 2013 2014 9M 14/13 Operating revenues 1,870 1,772 1,661 1,682 1,517 1,607 1,618 -43 5,303 4,742 -561 Per
Slide 44: AM: AAM key figures (2/2)
Group financial results 3Q 2014 – Additional information on Asset Management AM: AAM key figures (2/2) (EUR mn) 1Q 2Q 3Q 4Q 1Q 2Q 3Q Delta 9M 9M Delta 2013 2013 2013 2013 2014 2014 2014 3Q 14/13 2013 2014 9M 14/13 PIMCO Operating profit 796 700 645 599 563 597 594 -51 2,140 1,754 -387 Performance fe
Slide 45: AM: splits of 3rd party AuM
Group financial results 3Q 2014 – Additional information on Asset Management AM: splits of 3rd party AuM1 AAM PIMCO AllianzGI 30.09.13 30.09.14 30.09.13 30.09.14 30.09.13 30.09.14 Regions (in %)2 America 62.9 62.2 68.0 69.0 31.7 30.5 Europe 26.9 27.7 21.7 20.7 58.3 60.3 Asia-Pacific 10.2 10.1 10.3 1
Slide 46: Additional information: Corporate and Other
2e 1 Highlights Group financial results 3Q 2014 2 Additional information a) Group b) Property-Casualty c) Life/Health d) Asset Management e) Corporate and Other 3 Glossary © Allianz SE 2014 46
Slide 47: Corporate and Other: key figures
Group financial results 3Q 2014 – Additional information on Corporate and Other Corporate and Other: key figures1 (EUR mn) 1Q 2Q 3Q 4Q 1Q 2Q 3Q Delta 9M 9M Delta 2013 2013 2013 2013 2014 2014 2014 3Q 14/13 2013 2014 9M 14/13 Total revenues (Banking) 148 133 131 138 139 132 135 +3 412 405 -7 Operatin
Slide 48: Glossary section
3 1 Highlights Group financial results 3Q 2014 2 Additional information a) Group b) Property-Casualty c) Life/Health d) Asset Management e) Corporate and Other 3 Glossary © Allianz SE 2014 48
Slide 49: Glossary (1)
Glossary (1) AAM Allianz Asset Management, mainly the holding company of PIMCO and AllianzGI ABS Asset-backed securities: Structured bonds or notes collateralized by a pool of assets such as loans, bonds or mortgages. As characteristics of the collaterals vary considerably (with regard to asset clas
Slide 50: Glossary (2)
Glossary (2) FVO Fair value option: Financial assets and liabilities designated at fair value through income are measured at fair value with changes in fair value recorded in the consolidated income statement. The recognized net gains and losses include dividends and interest of the financial instru
Slide 51: Glossary (3)
Glossary (3) MCEV Market consistent embedded value is a measure of the consolidated value of shareholders’ interest in a life portfolio. The Market Consistent Embedded Value is defined as Net asset value (NAV) + Present value of future profits - Time value of financial options and guarantees (O&G) -
Slide 52: Glossary (4)
Glossary (4) PVNBP Present value of new business premiums: Present value of projected new regular premiums, discounted with risk-free rates, plus the total amount of single premiums received. RoRC Return on Risk Capital: Measures the expected profit from new business relative to its projected risk c
Slide 53: 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