Allianz SE · XETR:ALV
Allianz — Q3 2006 Earnings Presentation
54 slides from Allianz's earnings presentation, Nov 3, 2006
Slide 1: Group financial results for the third quarter 2006
Helmut Perlet, Member of the Board of Management Group financial results for the third quarter 2006 November 3, 2006
Slide 2: Highlights 3Q 2006
Group results 3Q 2006 Highlights 3Q 2006 Operating profit of EUR 2.7bn (+43%) 90.2% combined ratio in P/C Double-digit growth in L/H operating profit, lower revenues in Italy and US Dresdner Bank grows operating profit by 38% ! AM maintains strong profitability Net income doubled to EUR 1.6b
Slide 3: Group overview (1/2): strong earnings momentum
Group results 3Q 2006 Group overview (1/2): strong earnings momentum Internal Internal Quarterly results growth: YTD results growth: -4.0% +0.3% Total -5.1% +0.7% revenues 28.3 29.6 75.8 76.3 (EUR bn) 23.2 24.3 23.7 23.8 25.2 24.1 22.6 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2004 2005 2006 9M 2005 9M 2006 Operat
Slide 4: Group overview (2/2): strong earnings momentum
Group results 3Q 2006 Group overview (2/2): strong earnings momentum Quarterly results YTD result Net +100.4% +61.0% 2,279 income 5,649 1,779 (EUR m) 1,324 1,390 1,591 3,508 794 872 468 296 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2004 2005 2006 9M 2005 9M 2006 +13.8% Share- 44.9 AP3Q2006_final holders’ 39.5 equi
Slide 5: Agenda
Agenda Group P/C L/H Banking Asset Management Summary AP3Q2006_final Additional information © Allianz SE 2006 4
Slide 6: Slowdown in 3Q revenues
Group results 3Q 2006 Slowdown in 3Q revenues (EUR bn) Total revenues1 23.2 24.3 28.3 23.7 23.8 25.2 29.6 24.1 22.6 0.8 0.6 1.9 1.7 0.8 3Q Total Int. 9M Total Int. 0.6 0.6 0.7 0.7 (in %) growth growth 2 growth growth2 0.6 1.7 0.7 1.5 1.4 1.6 1.7 1.6 12.8 1.6 11.9 Total 05 2.8 3.0 4.3 5.2 10.9 13.2 1
Slide 7: 3Q operating profit: strong contribution from all segments
Group results 3Q 2006 3Q operating profit1: strong contribution from all segments (EUR m) Business segments 3Q 06 ∆ 3Q 06/05 Property/Casualty Life/Health 1,727 P/C 1,727 +735 1,445 617 992 556 L/H 617 +61 391 Banking 406 +154 3Q 04 3Q 05 3Q 06 3Q 04 3Q 05 3Q 06 AM 294 -6 Banking Asset Management AP
Slide 8: 9M operating profit: all segments improve
Group results 3Q 2006 9M operating profit: all segments improve (EUR m) Business segments Property/Casualty Life/Health Strong double-digit growth in all CAGR CAGR 17.4% 4,958 19.3% segments 3,595 3,856 1,867 Dresdner Bank in striking- 1,545 1,312 distance of 2006 annual target 9M 04 9M 05 9M 06
Slide 9: Non-operating result
Group results 3Q 2006 Non-operating result Breakdown of non-operating items (EUR m) 3Q 04 3Q 05 3Q 06 ∆3Q06/05 Realized gains/losses -107 290 465 +175 Equity harvesting of 1.8% in and impairments of 3Q06, driven by sale of Four investments (net) Seasons (EUR 0.3bn) Interest expense -192 -172 -191
Slide 10: High quality net income
Group results 3Q 2006 High quality net income (EUR m) 3Q 04 3Q 05 3Q 06 ∆3Q 06/05 % Operating profit 1,978 1,864 2,660 +796 +42.7% Non-operating items -795 -218 13 +231 n.m. Income before income taxes, minority interests 1,183 1,646 2,673 +1,027 +62.4% Income taxes -491 -517 -797 -280 -54,2% Minorit
Slide 11: Strong capital base
Group results 3Q 2006 Strong capital base (EUR bn) Shareholders’ equity1 Conglomerate solvency Risk capital Requirement Solvency ratio Risk capital requirement Coverage ratio Available Funds Available risk-bearing funds 120% 162% 180% 143% 157% 175% 61.6 +13.8% 57.3 50.1 44.9 45.7 39.5 39.3 35.0 36.
Slide 12: Expected impact from RAS merger in 4Q
Group results 3Q 2006 Expected impact from RAS merger in 4Q Estimated impact Impact on equity (EUR bn) Impact on net income +3.7 100% 52.5 52.5 Additional share Minority Additional 23.67% of profit in 4Q 06 7.6 -2.0 5.9 interest -1.7 share 4Q 06 of EUR 40-45m1 Sharehold. 44.9 46.6 Allianz share 76.3
Slide 13: Agenda
Agenda Group P/C L/H Banking Asset Management Summary AP3Q2006_final Additional information © Allianz SE 2006 12
Slide 14: P/C overview: underwriting excellence continues
Group results 3Q 2006 P/C overview: underwriting excellence continues (EUR m) Operating profit +74.1% 1,845 1,727 Operating profit drivers 1,650 1,445 1,386 +781 1,727 1,230 1,214 1,286 -29 -17 992 992 AP3Q2006_final Operating Under- Operat. Other Operating profit writing1 inv. income2 profit 3Q 4Q
Slide 15: P/C: managed growth
Group results 3Q 2006 P/C: managed growth (EUR m) GPW Combined ratio 3Q 05 3Q 06 ∆06/051 Allianz Sach2 2,011 1,994 -0.8% AGF 1,196 1,208 1.0% Gross premiums written (EUR bn) Internal RAS 800 793 -0.9% growth: +1.8% Lloyd Adriatico 282 285 1.1% +0.4% Allianz UK 561 585 3.6% Allianz Spain 403 446 10.7
Slide 16: P/C: excellent combined ratios across all regions
Group results 3Q 2006 P/C: excellent combined ratios across all regions (in %) Comb. ratioratio3Q 04 3Q 05 3Q 06 Combined ratio Combined Allianz Sach1 89.9 86.0 89.2 AGF 98.9 100.2 99.6 RAS 97.4 102.8 97.3 98.6 YTD 92.2 94.7 94.0 92.1 92.5 94.7 91.9 Lloyd Adriatico 73.6 72.9 69.2 90.2 92.2 Allianz U
Slide 17: P/C: effective cycle management
Group results 3Q 2006 P/C: effective cycle management (in %) Loss ratio 74.9 Impact from Accident year loss ratio Accident year loss ratio Nat Cat of 7.8%-p stable except for major Nat Cat effects 70.4 69.7 69.6 +1.5%-p Exceptional accident 69.1 (2y Ø) quarter (only 0.5%-p Nat -1.5%-p Cat impact
Slide 18: P/C: interest and similar income flat
Group results 3Q 2006 P/C: interest and similar income flat Average AuM (EUR bn) +1.2% Interest and similar income (EUR m) 93.1 94.2 Other 8.4 -1.9% 8.2 15.1 +11.6% 16.9 -0.2% Equities 930 928 Other -45.0% 91 Debt 69.6 69.1 165 -0.7% +60.8% 87 securities Equities 54 3Q 05 3Q 06 Debt 711 +5.6% 750 Cu
Slide 19: Agenda
Agenda Group P/C L/H Banking Asset Management Summary AP3Q2006_final Additional information © Allianz SE 2006 18
Slide 20: L/H overview: operating profit further improves
Group results 3Q 2006 L/H overview: operating profit further improves Operating profit (EUR m) Operating profit increase driven by a +11.0% EUR 18.8bn higher AuM base1 and an improved cost-income ratio 723 617 Operating margin on policyholder 556 549 527 liabilities improved to 18.3bp2 517 476 4
Slide 21: L/H: better cost-income ratio drives operating profit improvement
Group results 3Q 2006 L/H: better cost-income ratio drives operating profit improvement (EUR m) “Income” Operating profit 14,340 13,330 13,122 Investment 3,433 & other 2,754 3,442 +0.3% income 617 556 Stat. prem. 10,576 10,907 9,680 -11.2% earned 391 3Q 04 3Q 05 3Q 06 x (1-CIR) Cost-income ratio1 (i
Slide 22: L/H: revenue shortfall driven by Italy and US
Group results 3Q 2006 L/H: revenue shortfall driven by Italy and US (EUR m) Stat. prem. 3Q 05 3Q 06 ∆06/051 German Life 2,595 2,640 +1.7% Statutory premiums (EUR bn) Internal growth: AGF 1,234 1,313 +6.4% -10.9% RAS 1,539 1,055 -31.4% -11.8% 10.9 11.2 Lloyd Adriatico 442 213 -51.8% 9.8 Switzerland 1
Slide 23: L/H: AZ Life – the way forward
Group results 3Q 2006 L/H: AZ Life – the way forward (US-Dollar1 bn) Operating profit Operating profit: (US-Dollar m) - growing AuM basis drives future >600 operating profit 476 375 - efficiency improvements 318 launched - continued strong New Business Value added 12M 12M FC Plan 04 05 06 07 Dis
Slide 24: L/H investment income: higher asset base increases interest and similar income
Group results 3Q 2006 L/H investment income: higher asset base increases interest and similar income (EUR bn) Average AuM Current yield1 (in %) Interest and similar income +3.8% 3.1 2.6 2.7 2.8 1.2 1.2 267.9 258.0 0.6 0.5 -13.2% 6.1 0.2 Other 7.0 0.2 +26.4% 36.9 Equities 29.2 05 06 05 06 05 06 05 06
Slide 25: Agenda
Agenda Group P/C L/H Banking Asset Management Summary AP3Q2006_final Additional information © Allianz SE 2006 24
Slide 26: Dresdner Bank overview: substantial improvement
Group results 3Q 2006 Dresdner Bank overview: substantial improvement (EUR m) Operating profit +38.2% Operating profit drivers 529 156 319 311 311 225 11 -81 209 205 225 80 -9 Operating Operat. Operat. LLP1 AP3Q2006_final Operating -36 profit revenues expenses profit 3Q 05 ∆ 3Q 06/05 3Q 06 3Q 4Q 1Q
Slide 27: Dresdner Bank: revenues stable
Group results 3Q 2006 Dresdner Bank: revenues stable (EUR m) Operating revenues Net interest income Net fee & commission Net dealing income1 income +0.7% +35.2% -1.4% -45.8% 1,497 1,510 1,521 660 695 640 631 588 514 358 248 194 AP3Q2006_final 3Q 04 3Q 05 3Q 06 3Q 04 3Q 05 3Q 06 3Q 04 3Q 05 3Q 06 3Q
Slide 28: Dresdner Bank: significant improvement in cost-income ratio
Group results 3Q 2006 Dresdner Bank: significant improvement in cost-income ratio (EUR m) 9M cost-income ratio excl. perfor- Cost-income ratio (in %) mance related expenses1 (in %) YTD 87.6 78.8 102.4 75.7 97.9 93.7 71.7 91.0 88.6 81.0 62.4 81.0 82.8 73.7 AP3Q2006_final 9M 04 9M 052 9M 06 3Q 4Q 1Q 2
Slide 29: Dresdner Bank: de-risking continues to pay off
Group results 3Q 2006 Dresdner Bank: de-risking continues to pay off (EUR m) New provisions Net loan loss provisions Non-performing loans 7,705 248 103 58 54 2,534 3Q 04 3Q 05 3Q 06 1,979 Releases/recoveries -49 AP3Q2006_final 194 188 152 30.09.04 30.09.05 30.09.06 -130 © Allianz SE 2006 Coverage ra
Slide 30: Agenda
Agenda Group P/C L/H Banking Asset Management Summary AP3Q2006_final Additional information © Allianz SE 2006 29
Slide 31: AM overview: strong profitability maintained
Group results 3Q 2006 AM overview: strong profitability maintained (EUR m) Operating profit -2.0% 349 Operating profit drivers 300 304 297 294 265 252 +16 218 231 300 294 -22 AP3Q2006_final Operating Operat. Operat. Operating 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q profit revenues expenses profit 2004 2005 2006
Slide 32: AM: net inflows strengthened
Group results 3Q 2006 AM: net inflows strengthened (EUR bn) 3rd party net inflows1 3rd party AuM2 - regional breakdown3 Total 711 755 Other4 40 5.3% 35 4.9% 61 17.8 17.6 8.1% 16.5 Asia-Pacific 59 8.3% 15.1 15.9 105 13.9% Rest of Europe 86 12.1% 13.8 112 14.8% Germany 107 15.0% 9.7 AP3Q2006_final 4.0
Slide 33: AM: fixed income benefits from superior performance in challenging markets
Group results 3Q 2006 AM: fixed income benefits from superior performance in challenging markets Fixed Income investm. perform.1 (in %) Fixed Income 3rd party net inflows Outperforming AuM EUR bn Underperforming AuM 20.0 17.7 18.5 18.2 96 96 93 15.2 15.4 8.5 6.9 AP3Q2006_final -2.5 4 4 7 Sept 3Q 4Q
Slide 34: AM: equity net inflows follow significantly improved performance
Group results 3Q 2006 AM: equity net inflows follow significantly improved performance Equity investment performance1 (in %) Equity 3rd party net inflows (EUR bn) Outperforming AuM 3.4 Underperforming AuM 2.7 67 59 0.8 43 0.1 -0.2 -1.1 -2.0 -2.6 AP3Q2006_final 33 -4.7 41 57 Sept 3Q 4Q 1Q 2Q 3Q 4Q 1Q
Slide 35: AM: cost-income ratio remains on a very competitive level
Group results 3Q 2006 AM: cost-income ratio remains on a very competitive level (EUR m) Operating expenses +5.4% Cost-income ratio (in %) 410 432 340 +1.8%-p 3Q 04 3Q 05 3Q 06 60.9 57.7 59.5 Operating revenues +2.3% AP3Q2006_final 3Q 04 3Q 05 3Q 06 726 710 558 © Allianz SE 2006 3Q 04 3Q 05 3Q 06 34
Slide 36: Agenda
Agenda Group P/C L/H Banking Asset Management Summary AP3Q2006_final Additional information © Allianz SE 2006 35
Slide 37: Summary
Group results 3Q 2006 Summary P/C: effective cycle management results in superior combined ratio L/H: strong growth in operating profit and increased new business margin Dresdner Bank: operating profit in striking-distance of full-year target AM: strong performance track record and competiti
Slide 38: Agenda
Agenda Group P/C L/H Banking Asset Management Summary AP3Q2006_final Additional information © Allianz SE 2006 37
Slide 39: Result by segments overview
Group results 3Q 2006 Group: result by segments overview (EUR m) P/C L/H Banking AM Corporate Consolidation Total 9M 05 9M 06 9M 05 9M 06 9M 05 9M 06 9M 05 9M 06 9M 05 9M 06 9M 05 9M 06 9M 05 9M 06 Total revenues 34.1 34.2 35.1 34.6 4.7 5.3 1.9 2.2 0 0 0 0 75.8 76.3 (EUR bn) Operating profit 3,856 4
Slide 40: Key figures per quarter
Group results 3Q 2006 Group: key figures per quarter (EUR m) 2004 2005 2006 Delta 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 3Q 06/05 Total revenues 23.2 24.3 28.3 23.7 23.8 25.2 29.6 24.1 22.6 -1.2 (EUR bn) Operating profit 1,978 1,679 1,887 2,346 1,864 1,906 2,677 2,794 2,660 796 Non-operating items -795 -702 368
Slide 41: P/C: key figures and ratios per quarter
Group results 3Q 2006 P/C: key figures and ratios per quarter (EUR m) 2004 2005 2006 Delta 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 3Q 06/05 Gross premiums written (EUR bn) 10.2 8.9 14.1 9.6 10.4 9.6 14.1 9.7 10.4 0 Operating profit 1,445 1,230 1,214 1,650 992 1,286 1,386 1,845 1,727 735 Non-operating items -46 1
Slide 42: L/H: key figures and ratios per quarter
Group results 3Q 2006 L/H: key figures and ratios per quarter (EUR m) 2004 2005 2006 Delta 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 3Q 06/05 Statutory premiums (EUR bn) 10.9 13.2 11.9 12.1 11.2 13.2 12.8 11.9 9.8 -1.4 Operating profit 391 476 517 472 556 549 723 527 617 61 Non-operating items -23 -68 88 37 28 24
Slide 43: Dresdner Bank: key figures and ratios per quarter
Group results 3Q 2006 Dresdner Bank: key figures and ratios per quarter (EUR m) 2004 2005 2006 Delta 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 3Q 06/05 Operating revenues 1,497 1,463 1,623 1,330 1,510 1,576 1,884 1,709 1,521 11 Operating profit 80 -36 209 205 225 -9 529 319 311 86 Non-operating items -74 -228 450
Slide 44: Dresdner Bank: divisional reporting
Group results 3Q 2006 Dresdner Bank: divisional reporting (EUR m) Private & Business Corporate & Corporate Other Clients Investment Banking 3Q 05 3Q 06 3Q 05 3Q 06 3Q 05 3Q 06 Operating revenues 744 754 851 748 -85 19 Operating expenses -615 -588 -717 -621 -83 -50 Cost-inc. ratio (in %) 82.7 78.0 84
Slide 45: Operating revenue/operating profit reconciliation
Group results 3Q 2006 Operating revenue/ operating profit reconciliation Dresdner Bank – banking segment 1Q-3Q 2006 (EUR m) 1Q 2Q 3Q Operating revenues +64 1,948 1,884 1,709 +78 1,706 +66 1,668 +81 -81 1,521 Operating profit AP3Q2006_final 529 +18 547 +81 +14 406 319 +28 266 311 © Allianz SE 2006 -8
Slide 46: Asset Management: key figures and ratios per quarter
Group results 3Q 2006 Asset Management: key figures and ratios per quarter (EUR m) 0 2004 2005 2006 Delta 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 3Q 06/05 Operating revenues 558 608 567 641 710 804 751 726 726 16 Operating profit 218 265 231 252 300 349 304 297 294 -6 Non-operating items -271 -276 -164 -173 -212
Slide 47: Asset Management: development of 3rd party assets
Group results 3Q 2006 Asset Management: development of 3rd party assets Third-party AuM (EUR bn) Client and asset mix Third-party AuM (as of 30.09.2006 = EUR 755bn) Third-party AuM 743 (as of 31.12.2005) Retail Institutional Σ Net inflows 25 Equity 11% 11% 22% Market effects 25 Fixed 27% 50% 77% inc
Slide 48: Corporate segment: key figures per quarter
Group results 3Q 2006 Corporate segment: key figures per quarter (EUR m) 2004 2005 2006 Delta 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 3Q 06/05 Operating profit -159 -147 -267 -190 -223 -201 -180 -74 -331 -108 Non-operating items -354 -66 -123 -381 -230 -384 -211 184 27 257 Income b/taxes, min. -513 -213 -390 -57
Slide 49: Asset allocation: breakdown per segment
Group results 3Q 2006 Group asset allocation1: breakdown per segment (EUR bn) P/C L/H Banking Asset Mgmt. Corporate Consolid. Group Balance sheet items 3Q 05 3Q 06 3Q 05 3Q 06 3Q 05 3Q 06 3Q 05 3Q 06 3Q 05 3Q 06 3Q 05 3Q 06 3Q 05 3Q 06 1 Investments Equities 15.9 17.6 30.5 38.8 5.3 4.2 0.1 0.1 4.5 6
Slide 50: Average AuM P/C and L/H: basis for yield calculation
Group results 3Q 2006 Average AuM P/C and L/H1: basis for yield calculation (EUR bn) P/C L/H Balance sheet items 30.06.2006 30.09.2006 Avg. 30.06.2006 30.09.2006 Avg. Investments Equities1 16.2 17.6 16.9 35.0 38.8 36.9 Debt sec. 51.5 53.0 52.2 137.3 141.1 139.2 2 Other 8.5 8.0 8.2 5.9 6.3 6.1 Sum 76
Slide 51: Investment result: breakdown per segment
Group results 3Q 2006 Investment result1: breakdown per segment (EUR m) P/C L/H Banking AM Corporate Consolidation Group 3Q 05 3Q 06 3Q 05 3Q 06 3Q 05 3Q 06 3Q 05 3Q 06 3Q 05 3Q 06 3Q 05 3Q 06 3Q 05 3Q 06 Operating investment result 1 Interest and similar income 930 928 2,831 3,093 1,748 1,856 23 29
Slide 52: Development of shareholders' equity
Group results 3Q 2006 Development of shareholders’ equity Paid-in Revenue Foreign Unrealized Shareholders‘ Minorities Total capital reserves currency gains and equity before equity translation losses minorities adjustments (net) Balance as of 31.12.2005 (published) 21,616 8,579 -1,032 10,324 39,487
Slide 53: Revaluation reserve of EUR 30.6bn
Group results 3Q 2006 Revaluation reserve of EUR 30.6bn (EUR bn) Off balance sheet Revaluation reserve On balance sheet Shareholders’ Policyholders’ share share 1.8 (34.2%) 1.7 (33.9%) 30.6 Real estate Associated enterprises, joint ventures 5.1 0.04 12.4 Minorities 0.4 (8.8%) 1.1 1.7 AP3Q2006_final
Slide 54: Disclaimer
Disclaimer These assessments are, as always, subject to the disclaimer provided below. Cautionary Note Regarding Forward-Looking Statements The statements contained herein may include statements of future expectations and other forward-looking statements that are based on management's current views