Allianz SE · XETR:ALV
Allianz — Q1 2018 Earnings Presentation
45 slides from Allianz's earnings presentation, May 15, 2018
Slide 1: 1Q 2018 Analyst conference call
1Q 2018 Giulio Terzariol Chief Financial Officer Analyst conference call May 15, 2018 © Allianz SE 2018
Slide 2: Content
CONTENT GROUP FINANCIAL RESULTS 1 1Q 2018 2 GLOSSARY DISCLAIMER © Allianz SE 2018 2
Slide 3: Group: good start into 2018
Group financial results 1Q 2018 Group: good start into 2018 Total revenues (EUR bn) Operating profit drivers (EUR mn) +0.7% -6.0% +4.9% Internal growth 36.2 36.5 2,932 +15 +23 +13 2,756 -86 -141 1Q 17 1Q 18 Shareholders’ net income (EUR mn) +6.8% 1,939 Operating P/C L/H AM CO Consoli- Operating 1,81
Slide 4: Group: good start into 2018 - comments
Group financial results 1Q 2018 Group: good start into 2018 Comments • Strong internal growth of 4.9% • P/C – strong underlying development High single-digit growth in AM +9.3%. Strong internal A higher underwriting result is largely offset by lower growth in P/C +4.9% and L/H +4.7%. Adverse impact
Slide 5: Group: SII ratio strong and interest rate sensitivity reduced
Group financial results 1Q 2018 Group: SII ratio strong and interest rate sensitivity reduced Shareholders’ equity (EUR bn) Key sensitivities (EUR bn) -3.4% Equity markets -30% -3.8 Unrealized 65.6 63.3 gains/losses1 12.2 10.3 +50bps -4.1 Interest rate Retained earnings2 24.5 24.1 -50bps +4.0 Paid i
Slide 6: Group: SII ratio strong - comments
Group financial results 1Q 2018 Group: SII ratio strong and interest rate sensitivity reduced Comments • Shareholders’ equity – slightly down, including • SII ratio – at a strong level impact from EUR 1.5bn share buy-back The SII ratio decreases 4%-p in 1Q, driven by a In 1Q 2018, shareholders’ equi
Slide 7: Group: very good SII capital generation
Group financial results 1Q 2018 Group: very good SII capital generation Own funds +3.2 (EUR bn) 76.4 -0.8 75.4 -0.3 -2.1 -1.0 +1.2 +1.7 +0.6 -0.4 P/C AM L/H CO/Conso. 31.12.17 Regulatory/ Operating SII Market Capital mgmt./ Tax/ 31.03.18 model changes earnings impact management other actions SII cap
Slide 8: Group: very good SII capital generation - comments
Group financial results 1Q 2018 Group: very good SII capital generation Comments • Very good capital generation • Market impact SII capital generation – net of tax and dividend – Minor impact on our SII ratio of ~-2%-p. Own funds amounts to ~+5%-p, slightly above 1Q 2017 (+4%-p) impact broadly equal
Slide 9: P/C: strong internal growth
Group financial results 1Q 2018 P/C: strong internal growth EUR mn Revenues YTD change on renewals 1Q 18 Total growth Internal growth 1Q 18 Momentum ∆ p.y. ∆ p.y. Total P/C segment 17,896 +1.1% +4.9% +1.3% n.a. Selected OEs Germany 4,609 +4.4% +4.4% +2.0% stable France 1,513 +1.4% +1.4% +1.1% stable
Slide 10: P/C: strong internal growth - comments
Group financial results 1Q 2018 P/C: strong internal growth Comments • Good start to the year • Australia – price and volume positive Strong internal growth of +4.9% with positive volume Key growth contributor commercial motor. Negative swing (+3.7%) and price (+1.2%) effects. Growth drivers in rene
Slide 11: P/C: attritional LR improves – on track for 94% CR
Group financial results 1Q 2018 P/C: attritional LR improves – on track for 94% CR Operating profit drivers (EUR mn) Combined ratio (in %) +1.2% -0.8%-p +80 95.6 94.8 1,259 1,274 -56 -9 Loss ratio 67.2 66.5 NatCat impact2 1.1 2.6 (in %-p) Expense ratio 28.4 28.3 1Q 17 1Q 18 Operating Underwriting In
Slide 12: P/C: attritional LR improves - comments
Group financial results 1Q 2018 P/C: attritional LR improves – on track for 94% CR Comments • Operating profit – at 24% of FY outlook mid-point • Run-off – back to normal OP on last year’s level as a higher underwriting result At 3.2%, +0.4%-p above 1Q 2017 which was is largely offset by a reduction
Slide 13: P/C: widespread improvements offset by NatCat in Germany
Group financial results 1Q 2018 P/C: widespread improvements offset by NatCat in Germany EUR mn Operating profit Combined ratio NatCat impact on CR 1Q 18 ∆ p.y. 1Q 18 ∆ p.y. 1Q 18 ∆ p.y. Total P/C segment 1,274 +1.2% 94.8% -0.8%-p +2.6%-p +1.5%-p Selected OEs Germany 100 -63.6% 100.9% +7.3%-p +8.0%-
Slide 14: P/C: widespread improvements - comments
Group financial results 1Q 2018 P/C: widespread improvements offset by NatCat in Germany Comments • Germany – impacted by weather • UK – on good level Higher NatCat main reason for CR increase. Better CR on similar level as last year (adjusted for ER only partially offsets higher large losses. EUR 4
Slide 15: P/C: F/X weighs on operating investment result
Group financial results 1Q 2018 P/C: F/X weighs on operating investment result Operating investment result1 Current yield Economic reinvestment yield (EUR mn) (debt securities; in %) (debt securities; in %) -7.5% 0.65 0.63 1.8 1.6 743 687 1Q 17 1Q 18 1Q 17 1Q 18 1Q 17 1Q 18 Total average asset base4
Slide 16: P/C: F/X weighs on operating investment result - comments
Group financial results 1Q 2018 P/C: F/X weighs on operating investment result Comments • Interest & similar income • Economic reinvestment yield Lower income on debt main reason for decline. Reinvestment yield 0.2%-p above FY 2017. Current yield decline of 2bps in line with market environment. Inte
Slide 17: L/H: NBM and business mix at target
Group financial results 1Q 2018 L/H: NBM and business mix at target PVNBP share by line PVNBP by OE (EUR mn) Total L/H segment 3.1 3.3 Other OEs Germany Life 1,152 (-18.6%) 4,380 (+9.9%) USA Protection & health 3.5 22% 23% 3.7 2,004 (-9.3%) Asia Pacific 1,513 (+20.3%) Germany Health Unit-linked 2.6
Slide 18: L/H: NBM and business mix - comments
Group financial results 1Q 2018 L/H: NBM and business mix at target Comments PVNBP by line PVNBP by OE • New business growth of 5.4% excl. F/X • Germany Life – preferred lines grow 25% Adverse F/X impact leads to total growth of 1.7%. Share of traditional products down to 20%. • Preferred lines grow
Slide 19: L/H: OP at 25% of FY target range midpoint
Group financial results 1Q 2018 L/H: OP at 25% of FY target range midpoint (EUR mn) Operating profit by source Operating profit by line -7.4% -7.4% 1,155 +21 1,155 +24 1,069 1,069 -75 -23 -32 238 238 88 104 205 177 624 550 Operating Loadings Investment Expenses Technical Impact of Operating 1Q 17 1Q
Slide 20: L/H: OP at 25% of FY target - comments
Group financial results 1Q 2018 L/H: OP at 25% of FY target range midpoint Comments • Operating profit at good level Operating profit by line Decline driven by F/X (∆ EUR -39mn), lower • UL increases 18% harvesting and impact from volatile markets. Result of higher AuM in Italy and Taiwan. Prior yea
Slide 21: L/H: VNB up 8%
Group financial results 1Q 2018 L/H: VNB up 8% EUR mn Value of new business New business margin Operating profit 1Q 18 ∆ p.y. 1Q 18 ∆ p.y. 1Q 18 ∆ p.y. Total L/H segment 489 +7.9% 3.3% +0.2%-p 1,069 -7.4% Germany Life 173 +29.1% 3.9% +0.6%-p 334 +16.7% USA 75 -12.3% 3.8% -0.1%-p 171 -47.4% Asia-Paci
Slide 22: L/H: VNB up 8% - comments
Group financial results 1Q 2018 L/H: VNB up 8% Comments New business Operating profit • Successful new business management • Germany Life – higher investment margin NBM and VNB prove that our products Increase entirely driven by higher investment margin continue to create value even in a very low in
Slide 23: L/H: investment margin on track at 23bps
Group financial results 1Q 2018 L/H: investment margin on track at 23bps Investment margin Economic reinvestment yield (debt securities; in %) (Yields are pro-rata) 1Q 17 1Q 18 1.9 1.9 Based on Ø book value of assets1 (EUR bn) 516 526 Current yield 0.85% 0.80% Based on Ø aggregate policy reserves (E
Slide 24: L/H: investment margin - comments
Group financial results 1Q 2018 L/H: investment margin on track at 23bps Comments • Yield decline within expected range • Investment margin (in %) – on track Current yield based on aggregate policy reserves Investment margin at 23bps. Normal full-year level for down by 5bps. Impact partially offset
Slide 25: AM: EUR 21bn 3rd party net inflows
Group financial results 1Q 2018 AM: EUR 21bn 3rd party net inflows (EUR bn) Total assets under management 3rd party assets under management development -0.2% -1.3% 1,960 1,956 1,448 +1.7 +19.2 +0.8 1,429 Allianz Group 512 527 assets -17.3 -22.9 3rd party AuM 1,448 1,429 31.12.17 31.03.18 31.12.17 Ne
Slide 26: AM: EUR 21bn 3rd party net inflows - comments
Group financial results 1Q 2018 AM: EUR 21bn 3rd party net inflows Comments • 3rd party AuM segment – adverse F/X & markets • Net inflows PIMCO: EUR 19bn Solid 3rd party net inflows in both entities, more than Strong 3rd party net inflows, driven by strategies like compensated by negative F/X and ma
Slide 27: AM: 9% internal growth at stable margin
Group financial results 1Q 2018 AM: 9% internal growth at stable margin (EUR mn) Revenues development PIMCO AllianzGI +0.2% -0.3% +1.1% Internal growth +9.3% +14.4% -3.6% 1,558 1,561 1,110 1,106 448 453 61 51 34 32 27 19 Performance fees AuM driven & other revenues1 1,497 1,509 1,075 1,073 421 434 3
Slide 28: AM: 9% internal growth - comments
Group financial results 1Q 2018 AM: 9% internal growth at stable margin Comments • Revenues segment – internal growth +9% • Stable margins AuM driven revenues up 5% (+17% excluding F/X) 3rd party AuM margin of the segment is stable particularly due to higher average 3rd party AuM (+4%). (∆ -0.1 bps)
Slide 29: AM: double-digit profit growth excluding F/X
Group financial results 1Q 2018 AM: double-digit profit growth excluding F/X (EUR mn) Operating profit drivers PIMCO +4.1% +8.4% +15.8% Internal growth +193 443 480 5721 -5 5951 -95 60.1 56.6 CIR (in %) -70 63.3 61.9 CIR (in %) 1Q 17 1Q 18 Operating AuM driven & Performance Expenses F/X Operating Al
Slide 30: AM: double-digit profit growth - comments
Group financial results 1Q 2018 AM: double-digit profit growth excluding F/X Comments • Segment – OP up despite adverse F/X 1Q 2017 1Q 2018 ∆ F/X adjusted operating profit increases by 16%. Operating revenues (EUR mn) 1,558 1,561 +0.2% Higher AuM driven revenues are the major driver of Operating pro
Slide 31: CO: on track
Group financial results 1Q 2018 CO: on track Operating loss development and components -41 -124 0 -11 -5 -182 n.m. Operating Holding & Banking Alternative Consoli- Operating result Treasury Investments dation result 1Q 17 1Q 18 ∆ 1Q 18/17 1Q 18 -211 20 10 0 © Allianz SE 2018 1Q 17 -87 31 15 0 31
Slide 32: CO: on track - comments
Group financial results 1Q 2018 CO: on track Comments • Operating loss in line with FY target Operating loss of EUR -0.2bn at 20% of FY outlook midpoint of EUR -0.9bn. • Holding & Treasury within expected range In 1Q 2017 for the last time a positive impact related to the cost allocation scheme for
Slide 33: Group: s/h net income up 7% to EUR 1.9bn
Group financial results 1Q 2018 Group: s/h net income up 7% to EUR 1.9bn EUR mn 1Q 17 1Q 18 Change Operating profit 2,932 2,756 -176 Non-operating items -220 -75 +145 Realized gains/losses (net) 167 234 +68 Impairments (net) -12 -69 -57 Income from financial assets and liabilities carried at fair va
Slide 34: Group: s/h net income - comments
Group financial results 1Q 2018 Group: s/h net income up 7% to EUR 1.9bn Comments • S/h net income driven by non-OP result and taxes • Non-controlling interests – EH minority buy-out Lower operating profit (∆ EUR -176mn) more than Non-controlling interests down mainly due to offset by better non-ope
Slide 35: Status quo and ambitions
Group financial results 1Q 2018 Status quo and ambitions 3M 18 2018 3M 18 2018 Businesses with 7.0%1 5%1 EPS Growth NPS above market 60%3 75% SII interest rate 13.8%2 13% RoE Allianz Group sensitivity 7%-p <11%-p 94.8% 94% P/C CR PIMCO CIR 56.6% 60% L/H OEs with 71%2 100% RoE ≥10% IMIX 72%3 72% Shar
Slide 36: Content
CONTENT GROUP FINANCIAL RESULTS 1 1Q 2018 2 GLOSSARY DISCLAIMER © Allianz SE 2018 36
Slide 37: 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 38: 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 39: 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 40: 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 41: 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 42: 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 43: 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 44: 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 45: 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