Allianz SE · XETR:ALV

Allianz — Q3 2017 Earnings Presentation

47 slides from Allianz's earnings presentation, Nov 10, 2017

  1. Slide 1: 3Q 2017 Analyst conference call

    3Q 2017 Dieter Wemmer Chief Financial Officer Analyst conference call November 10, 2017 Please note: Prior year figures have been adjusted due to an updated operating profit definition and an accounting policy change. For further information please refer to the section “Additional information” of th

  2. Slide 2: Highlights, Group financial results 3Q 2017, Glossary

    1 1 Highlights Group financial results 3Q 2017 2 Glossary © Allianz SE 2017 2

  3. Slide 3: Group: 9M net income up 5 percent

    Group financial results 3Q 2017 Group: 9M net income up 5 percent Group Property-Casualty Life/Health Asset Management Total revenues 9M 17 in EUR bn (vs. prior year in %) 94.5 (+2.2%) 40.9 (+1.4%) 48.7 (+2.6%) 4.7 (+6.7%) Operating profit 9M 17 in EUR mn (vs. prior year in %) 8,337 (+3.5%) 3,744 (-

  4. Slide 4: Group: 9M net income up 5 percent – comments

    Group financial results 3Q 2017 Group: 9M net income up 5 percent Comments  Good internal growth of 3.5%  P/C – high NatCat Highest internal growth in AM +6.7%, Operating profit at 71% of FY outlook midpoint. followed by L/H +4.9% and P/C +1.5%. YoY decline of -6.8% entirely due to lower underwrit

  5. Slide 5: Group: good 3Q performance impacted by NatCat

    Group financial results 3Q 2017 Group: good 3Q performance impacted by NatCat Total revenues (EUR bn) Operating profit drivers (EUR mn) Internal growth +2.1% -17.3% +5.5% 2,995 27.7 28.3 +32 2,477 -404 -123 -16 -6 3Q 16 3Q 17 Shareholders’ net income (EUR mn) -17.3% Operating P/C L/H AM CO Consoli-

  6. Slide 6: Group: good 3Q performance impacted by NatCat – comments

    Group financial results 3Q 2017 Group: good 3Q performance impacted by NatCat Comments  Internal growth of 5.5%  P/C – a solid performance in a difficult quarter Headwind from F/X (-2.2%) and consolidation Operating profit down -28% driven by lower (-1.1%) more than offset. Highest internal growth

  7. Slide 7: Group: SII ratio at 227% – up 8%-p in the quarter

    Group financial results 3Q 2017 Group: SII ratio at 227% – up 8%-p in the quarter Shareholders’ equity Key sensitivities (EUR bn) (EUR bn) +1.3% Equity -30% -3.6 markets 67.1 64.2 65.0 Unrealized +50bps -3.5 11.8 11.1 11.6 Interest gains/losses1 rate -50bps +3.2 Retained earnings2 26.3 24.1 24.5 on

  8. Slide 8: Group: SII ratio at 227% – comments

    Group financial results 3Q 2017 Group: SII ratio at 227% – up 8%-p in the quarter Comments  Shareholders’ equity – up 1%, despite EUR 0.6bn  SII ratio – above upper end of target range repurchased shares SII ratio increased 8%-p in the quarter and now In 3Q 2017, shareholders’ equity increases by

  9. Slide 9: Group: 4%-p net capital generation in the quarter – 11%-p YTD

    Group financial results 3Q 2017 Group: 4%-p net capital generation in the quarter – 11%-p YTD +2.5 +0.8 76.0 76.7 75.3 -0.8 0.0 -1.7 +1.0 +0.1 +1.4 +0.7 +0.5 0.0 P/C AM Own funds -0.5 0.0 L/H CO/Conso. (EUR bn) 31.12.16 30.06.17 Regulatory/ Operating SII Market Capital mgmt./ Tax/ 30.09.17 model cha

  10. Slide 10: Group: net capital generation – comments

    Group financial results 3Q 2017 Group: 4%-p net capital generation in the quarter – 11%-p YTD Comments  SII ratio up on higher own funds and lower SCR  SCR – lower on market effects and capital SII ratio increases +8%-p in the quarter, driven by efficient growth both higher own funds (∆ EUR +0.7bn

  11. Slide 11: P/C: solid price- and volume-driven internal growth

    Group financial results 3Q 2017 P/C: solid price- and volume-driven internal growth Revenues YTD rate change on renewals Total growth Internal growth EUR mn 3Q 17 9M 17 Momentum ∆ p.y. ∆ p.y. Total P/C segment 11,549 +0.2% +2.2% +1.5% – Large OEs Germany 2,005 +0.8% +0.8% +2.4% stable France 1,029 +

  12. Slide 12: P/C: internal growth – comments

    Group financial results 3Q 2017 P/C: solid price- and volume-driven internal growth Comments  Internal growth rebounds  AP – excellent growth continues Good internal growth of +2.2% (1Q: +1.7%; 2Q: +0.5%) Allianz Worldwide Partners was rebranded to Allianz driven by price and volume. AP, AGCS, UK

  13. Slide 13: P/C: OP impacted by NatCat, weather and large losses

    Group financial results 3Q 2017 P/C: OP impacted by NatCat, weather and large losses Operating profit drivers (EUR mn) Combined ratio (in %) -28.0% +3.4%-p 1,443 93.5 96.9 1,039 0 Loss ratio 65.5 68.5 -371 -34 NatCat impact2 0.2 4.5 (in %-p) Expense ratio 28.0 28.4 3Q 16 3Q 17 Operating Underwriting

  14. Slide 14: P/C: OP impacted by NatCat – comments

    Group financial results 3Q 2017 P/C: OP impacted by NatCat, weather and large losses Comments  Operating profit – down on volatile items  Expense ratio – slightly up, driven by mix OP development driven by lower underwriting result as Similar factors as in 2Q − strong growth in high- NatCat, weath

  15. Slide 15: P/C: AGCS, France and Germany with biggest NatCat impact

    Group financial results 3Q 2017 P/C: AGCS, France and Germany with biggest NatCat impact Operating profit Combined ratio NatCat impact on CR1 EUR mn 3Q 17 ∆ p.y. 3Q 17 ∆ p.y. 3Q 17 ∆ p.y. Total P/C segment 1,039 -28.0% 96.9% +3.4%-p 4.5%-p +4.2%-p Large OEs Germany 211 -33.6% 96.3% +5.3%-p 1.6%-p +1

  16. Slide 16: P/C: NatCat impact – comments

    Group financial results 3Q 2017 P/C: AGCS, France and Germany with biggest NatCat impact Comments  Germany – NatCat and weather drive result  UK – a difficult quarter AY LR increase (∆ +4.1%-p) entirely due to Adverse large loss development and lower run-off higher NatCat and weather-related losse

  17. Slide 17: P/C: ongoing resilience

    Group financial results 3Q 2017 P/C: ongoing resilience Operating investment result1 Current yield Economic reinvestment yield (EUR mn) (debt securities; in %) (debt securities; in %) -4.5% 749 0.68 0.66 1.6 1.7 716 3Q 16 3Q 17 3Q 16 3Q 17 Change Total average asset base4 Duration5 3Q 16 3Q 17 (EUR

  18. Slide 18: P/C: ongoing resilience – comments

    Group financial results 3Q 2017 P/C: ongoing resilience Comments  Interest & similar income  Economic reinvestment yield Flat development is a strong performance as higher Increase of 0.2%-p vs. 2Q 2017 spread income on equities compensates lower income on across all fixed income categories. debt.

  19. Slide 19: L/H: new business growth with NBM of 3.4 percent

    Group financial results 3Q 2017 L/H: 5 percent new business growth with NBM of 3.4 percent PVNBP share by line PVNBP by OE (EUR mn) NBM (in %) Other OEs Germany Life 872 (-12.8%) 3,531 (+7.1%) Total L/H segment 2.8 3.4 USA 2,410 (-13.3%) Protection & health 6.2 13% 13% 6.6 Asia Pacific Germany Healt

  20. Slide 20: L/H: new business growth – comments

    Group financial results 3Q 2017 L/H: 5 percent new business growth with NBM of 3.4 percent Comments PVNBP by line PVNBP by OE  NBM ≥ 3% in all quarters 2017  Germany Life – preferred lines grow 17% Management actions during 2016 and 2017 Profitable growth with all business lines NBM ≥ 3.0%. contri

  21. Slide 21: L/H: another strong quarter

    Group financial results 3Q 2017 L/H: another strong quarter (EUR mn) Operating profit by source Operating profit by line -10.3% -10.3% +50 1,192 1,192 +2 1,069 1,069 209 -126 -42 -6 95 226 225 97 203 664 543 Operating Loadings Investment Expenses Technical Impact of Operating 3Q 16 3Q 17 profit & fe

  22. Slide 22: L/H: another strong quarter – comments

    Group financial results 3Q 2017 L/H: another strong quarter Comments  9M OP at 84% of FY target range midpoint  Expenses 3% higher 9M 2017 operating profit of EUR 3.4bn at Increase in acquisition expenses driven by new excellent level. business growth in Asia, Germany Life, Italy and  L/H RoE 9M

  23. Slide 23: L/H: VNB up with Asia Pacific as 3rd strongest contributor

    Group financial results 3Q 2017 L/H: VNB up 29 percent with Asia Pacific as 3rd strongest VNB contributor Value of new business New business margin Operating profit EUR mn 3Q 17 ∆ p.y. 3Q 17 ∆ p.y. 3Q 17 ∆ p.y. Total L/H segment 410 +28.8% 3.4% +0.6%-p 1,069 -10.3% Large OEs Germany Life 141 +1.3% 4

  24. Slide 24: L/H: VNB – comments

    Group financial results 3Q 2017 L/H: VNB up 29 percent with Asia Pacific as 3rd strongest VNB contributor Comments New business Operating profit  Successful new business management  Germany and France – excellent profitability Outstanding NBM and VNB prove that our Operating profit impacted by nor

  25. Slide 25: L/H: investment margin solid at 23bps

    Group financial results 3Q 2017 L/H: investment margin solid at 23bps Investment margin Economic reinvestment yield (debt securities; in %) (Yields are pro-rata) 3Q 16 3Q 17 2.1 1.9 Based on Ø book value of assets1 (EUR bn) 521 518 Current yield 0.8% 0.8% Based on Ø aggregate policy reserves (EUR bn

  26. Slide 26: L/H: investment margin – comments

    Group financial results 3Q 2017 L/H: investment margin solid at 23bps Comments  Yield decline mitigated  Investment margin (in %) – 23bps and on track Current yield based on aggregate policy reserves 9M 2017 investment margin at 72bps. down by 4bps. Impact largely offset by lower average Normal fu

  27. Slide 27: AM: 5th consecutive quarter with 3rd party net inflows

    Group financial results 3Q 2017 AM: 5th consecutive quarter with 3rd party net inflows, YTD > EUR 100bn (EUR bn) Total assets under management 3rd party assets under management development +0.4% +0.5% 1,871 1,915 1,922 Allianz Group 509 510 +28.9 +15.1 510 1,406 +2.7 1,413 assets -33.7 -6.6 3rd part

  28. Slide 28: AM: net inflows – comments

    Group financial results 3Q 2017 AM: 5th consecutive quarter with 3rd party net inflows, YTD > EUR 100bn Comments  3rd party AuM segment – up 3% excluding F/X  Net inflows AllianzGI: EUR 3bn Increase compared with 2Q 2017 due to strong 3rd 3rd party net inflows in multi asset, fixed income party ne

  29. Slide 29: AM: AuM driven fees up excluding F/X

    Group financial results 3Q 2017 AM: AuM driven fees up 9 percent excluding F/X (EUR mn) Revenues development1 PIMCO3 AllianzGI4 +0.3% +0.5% -0.3% Internal growth +5.0% +5.6% +1.3% 470 469 1,071 1,076 1,539 1,544 24 46 70 65 55 120 Performance fees Other net fee and commission income (AuM driven fees

  30. Slide 30: AM: AuM driven fees – comments

    Group financial results 3Q 2017 AM: AuM driven fees up 9 percent excluding F/X Comments  AuM driven fees significantly up  Margin PIMCO – stable EUR 108bn 3rd party net inflows over the last four Quarterly 3rd party AuM margin stable in 2017 quarters contribute to higher average 3rd party AuM (1Q:

  31. Slide 31: AM: strong operating profit despite adverse F/X

    Group financial results 3Q 2017 AM: strong operating profit despite adverse F/X (EUR mn) Operating profit drivers PIMCO -2.7% -1.5% Internal +1.4% growth +116 455 449 6041 5881 -47 -61 -25 57.5 58.3 CIR (in %) 60.8 61.9 3Q 16 3Q 17 AllianzGI Operating AuM Performance Expenses F/X Operating -1.8% pro

  32. Slide 32: AM: operating profit – comments

    Group financial results 3Q 2017 AM: strong operating profit despite adverse F/X Comments  Segment – OP up versus 1Q and 2Q 2017  Segment 9M 2017 – 76% of OP outlook midpoint Positive OP trend: EUR 572mn in 1Q, EUR 584mn for FY 2017 achieved in 2Q, EUR 588mn in 3Q 2017. Nominal decrease 3rd party n

  33. Slide 33: CO: improving

    Group financial results 3Q 2017 CO: improving (EUR mn) Operating loss development and components +30 +5 0 -3 -211 -242 +13.0% Operating Holding & Banking Alternative Consoli- Operating result Treasury Investments dation result 3Q 16 3Q 17 ∆ 3Q 17/16 © Allianz SE 2017 3Q 17 -235 11 13 0 3Q 16 -265 15

  34. Slide 34: CO: improving – comments

    Group financial results 3Q 2017 CO: improving Comments  Holding & Treasury with good improvement Better result due to decline in admin expenses at Allianz SE and a higher net interest result. © Allianz SE 2017 34

  35. Slide 35: Group: shareholders' net income at EUR 1.6 billion

    Group financial results 3Q 2017 Group: shareholders’ net income at EUR 1.6 billion EUR mn 3Q 16 3Q 17 Change Operating profit 2,995 2,477 -518 Non-operating items -139 -142 -3 Realized gains/losses (net) 226 171 -55 Impairments (net) -48 -50 -2 Income from financial assets and liabilities carried at

  36. Slide 36: Group: shareholders' net income – comments

    Group financial results 3Q 2017 Group: shareholders’ net income at EUR 1.6 billion Comments  Shareholders’ net income impacted by NatCat  Deals previously announced, but not yet closed Shareholders’ net income driven by lower operating In 2Q 2017 Allianz agreed to sell its entire stake in profit (

  37. Slide 37: Status quo and ambitions for 2018

    Group financial results 3Q 2017 Status quo and ambitions for 2018 9M 17 2018 9M 17 2018 Businesses with 4.7%1 5%1 EPS Growth NPS above market 55%3 75% SII interest rate 12.4%2 13% RoE Allianz Group sensitivity 11%-p <11%-p 95.4% 94% P/C CR PIMCO CIR 59.1% 60% L/H OEs with 77%2 100% RoE ≥10% IMIX 72%

  38. Slide 38: Highlights, Glossary

    2 1 Highlights Group financial results 3Q 2017 2 Glossary © Allianz SE 2017 38

  39. Slide 39: Glossary (1)

    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 Allianz Global

  40. Slide 40: Glossary (2)

    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 administr

  41. Slide 41: Glossary (3)

    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 orderly tr

  42. Slide 42: Glossary (4)

    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 insured in the

  43. Slide 43: Glossary (5)

    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 addition to th

  44. Slide 44: 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 business segment, all or some of the following items: income from financial assets and liabilities carried at fair value thr

  45. Slide 45: Glossary (7)

    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 discretion. RoE

  46. Slide 46: Glossary (8)

    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 home juris

  47. Slide 47: 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

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