Allianz SE · XETR:ALV

Allianz — Q2 2017 Earnings Presentation

57 slides from Allianz's earnings presentation, Aug 4, 2017

  1. Slide 1: 2Q 2017 Media conference call

    2Q 2017 Oliver Bäte / Dieter Wemmer Media conference call August 4, 2017

  2. Slide 2: Agenda

    1 1 CEO assessment and outlook Oliver Bäte 2 Group financial results Dieter Wemmer 3 Glossary © Allianz SE 2017

  3. Slide 3: 6M 2017 – outstanding results with all segments contributing to success

    CEO assessment and outlook 6M 2017 – outstanding results with all segments contributing to success Group Property-Casualty Life/Health Asset Management Total revenues 6M 17 (EUR bn) vs. prior year Brexit 66.2 (+2.3%) 29.4 (+1.8%) 33.6 (+2.0%) 3.1 (+10.1%) Operating profit 6M 17 (EUR mn) vs. prior ye

  4. Slide 4: Renewal Agenda execution progressing well

    CEO assessment and outlook Renewal Agenda execution progressing well Selected examples  Customer Excellence Methodology – to further improve customer experience – rolled out for more than 100 journeys in 29 countries  Further expansion of customer satisfaction measurements  Cultural change furthe

  5. Slide 5: Our JV with LV= will be the UK's third largest personal insurer

    CEO assessment and outlook Our JV with LV= will be the UK’s third largest personal insurer and leverages the trusted LV= brand Joint Venture LV= GI  Financial strength  Leverages LV=’s strong brand and excellent  Market-leading UK  Digital expertise customer service with Allianz´s financial bran

  6. Slide 6: Operating profit 6M 2017 and outlook 2017

    CEO assessment and outlook Operating profit 6M 2017 and outlook 2017 (EUR bn) Disclaimer: Impact from NatCat, financial markets and global economic development not predictable! Actual/Midpoint Range Comments Property- On track for a solid year with OP projected to be in the 2.7 5.3 5.0 – 5.6 Casualt

  7. Slide 7: Excellent results also reflected in strong absolute and relative total return

    CEO assessment and outlook Excellent results also reflected in strong absolute and relative total return Relative total return1 2012 2013 2014 2015 2016 2017 YTD +220% Allianz Allianz1 ∆ +44%-p relative to STOXX Europe 600 Insurance Index +176% STOXX Europe 600 Insurance © Allianz SE 2017 Annual out

  8. Slide 8: Agenda

    2 1 CEO assessment and outlook Oliver Bäte 2 Group financial results Dieter Wemmer 3 Glossary © Allianz SE 2017

  9. Slide 9: Group: outstanding 1H result in every respect

    Group financial results 2Q 2017 Group: outstanding 1H result in every respect Group Property-Casualty Life/Health Asset Management Total revenues 6M 17 in EUR bn (vs. prior year in %) 66.2 (+2.3%) 29.4 (+1.8%) 33.6 (+2.0%) 3.1 (+10.1%) Operating profit 6M 17 in EUR mn (vs. prior year in %) 5,860 (+1

  10. Slide 10: Group: outstanding 1H result in every respect – comments

    Group financial results 2Q 2017 Group: outstanding 1H result in every respect Comments  All business segments grow revenues  L/H – OP outstanding, new business profitable Excellent growth in AM (+10.1%) fueled by higher Operating profit at 57% of FY outlook midpoint. average AuM. L/H revenues up 2

  11. Slide 11: Group: second quarter – all segments strengthened

    Group financial results 2Q 2017 Group: second quarter – all segments strengthened Total revenues (EUR bn) Operating profit drivers (EUR mn) Internal growth +2.0% +22.9% +2.8% +84 +25 2,928 +121 29.4 30.0 +316 -1 2,383 2Q 16 2Q 17 Shareholders’ net income (EUR mn) +83.4% Operating P/C L/H AM CO Conso

  12. Slide 12: Group: second quarter – comments

    Group financial results 2Q 2017 Group: second quarter – all segments strengthened Comments  All segments with revenue growth  P/C – OP rises 28% Dynamic revenue growth in AM (+8.1%) following Operating profit growth driven by better higher average AuM. More premiums from preferred underwriting res

  13. Slide 13: Group: SII ratio at upper end of target range

    Group financial results 2Q 2017 Group: SII ratio at upper end of target range Shareholders’ equity Key sensitivities (EUR bn) (EUR bn) -5.1% Equity -30% -3.5 markets 67.1 67.7 64.2 Unrealized +50bps -3.6 11.8 11.2 11.1 Interest gains/losses1 rate -50bps +3.4 Retained earnings2 26.3 27.6 24.1 on gove

  14. Slide 14: Group: SII ratio – comments

    Group financial results 2Q 2017 Group: SII ratio at upper end of target range Comments  Solvency II ratio – up 8%-p, in line with  Shareholders’ equity – down 5.1% sensitivities In 2Q 2017, shareholders’ equity decreases Good capital generation after tax and after dividend by EUR -3.5bn. The posit

  15. Slide 15: Group: market drives risk reduction

    Group financial results 2Q 2017 Group: market drives risk reduction +3.0 +0.7 75.3 75.8 -1.0 76.0 0.0 -2.4 +1.3 -0.3 +1.6 +1.1 +0.6 -0.1 P/C AM Own funds -0.6 +0.0 L/H CO/Conso. (EUR bn) 31.12.16 31.03.17 Regulatory/ Operating SII Market Capital mgmt./ Tax/ 30.06.17 model changes earnings impact man

  16. Slide 16: Group: market drives risk reduction – comments

    Group financial results 2Q 2017 Group: market drives risk reduction Comments  Higher SII ratio driven by lower SCR  Operating SII earnings – on same level as 1Q Own funds were broadly stable in 2Q while risk Strong SII earnings of 9%-p before tax and before capital reduced by EUR 1.2bn, leading to

  17. Slide 17: P/C: AWP leads growth

    Group financial results 2Q 2017 P/C: AWP leads growth Revenues YTD rate change on renewals Total growth Internal growth EUR mn 2Q 17 6M 17 Momentum Δ p.y. Δ p.y. Total P/C segment 11,685 +0.6% +0.5% +1.6% – Large OEs Germany 1,836 +1.4% +1.4% +2.5% stable Italy 1,139 -0.7% -0.7% -1.4% stable France

  18. Slide 18: P/C: AWP leads growth – comments

    Group financial results 2Q 2017 P/C: AWP leads growth Comments  AWP, Spain, Germany main growth drivers  AWP – excellent growth Internal growth of +0.5%. Good growth in most Travel portfolio at AWP P/C remains growth driver. entities largely offset by AGCS and Turkey with Good new business growth

  19. Slide 19: P/C: underwriting result drives strong operating profit growth

    Group financial results 2Q 2017 P/C: underwriting result drives strong operating profit growth Operating profit drivers (EUR mn) Combined ratio (in %) +28.0% -2.7%-p +328 +7 1,446 96.4 93.7 1,130 -19 Loss ratio 68.1 64.9 NatCat impact2 4.4 1.0 (in %-p) Expense ratio 28.4 28.8 2Q 16 2Q 17 Operating U

  20. Slide 20: P/C: underwriting result – comments

    Group financial results 2Q 2017 P/C: underwriting result drives strong operating profit growth Comments  Operating profit – on excellent level  Loss ratio – strong improvement in AY LR Strong OP increase entirely driven by better AY LR improves by -5.9%-p. This is driven by lower underwriting resu

  21. Slide 21: P/C: broad-based performance across segment

    Group financial results 2Q 2017 P/C: broad-based performance across segment Operating profit Combined ratio NatCat impact on CR1 EUR mn 2Q 17 Δ p.y. 2Q 17 Δ p.y. 2Q 17 Δ p.y. Total P/C segment 1,446 +28.0% 93.7% -2.7%-p 1.0%-p -3.3%-p Large OEs Germany 241 +57.9% 94.9% -4.7%-p 4.7%-p -3.4%-p Italy 2

  22. Slide 22: P/C: broad-based performance – comments

    Group financial results 2Q 2017 P/C: broad-based performance across segment Comments  Germany – strong CR improvement  Australia – excellent CR CR significantly better due to lower NatCat and AY LR improves -4.3%-p driven by lower weather- large losses, partly offset by run-off result and related

  23. Slide 23: P/C: current income broadly stable

    Group financial results 2Q 2017 P/C: current income broadly stable Operating investment result1 Current yield Economic reinvestment yield (EUR mn) (debt securities; in %) (debt securities; in %) -2.5% 1.9 766 0.67 0.65 1.5 747 2Q 16 2Q 17 2Q 16 2Q 17 Total average asset base4 Duration5 2Q 16 2Q 17 C

  24. Slide 24: P/C: current income – comments

    Group financial results 2Q 2017 P/C: current income broadly stable Comments  Interest & similar income  Economic reinvestment yield Resilient performance as higher income on equities Down 9bps compared to 1Q mainly due to lower compensates lower income on debt. Current yield yield on non-governmen

  25. Slide 25: L/H: NBM ahead of target

    Group financial results 2Q 2017 L/H: NBM ahead of target PVNBP share by line PVNBP by OE (EUR mn) NBM (in %) Other OEs Germany Life 1,046 (+1.7%) 3,804 (+0.8%) Total L/H segment 2.6 3.4 USA 2,625 (-22.5%) Protection & health 5.4 11% 12% 6.8 Germany Health Asia Pacific 368 (-4.6%) Unit-linked 2.6 19%

  26. Slide 26: L/H: NBM ahead of target – comments

    Group financial results 2Q 2017 L/H: NBM ahead of target Comments PVNBP by line PVNBP by OE  NBM well ahead of 3.0% target  Germany Life – all business lines with NBM ≥ 3.0% Management actions during 2016 and 2017 Higher production of preferred lines (+10%) contribute to NBM improvement. NBM at hi

  27. Slide 27: L/H: excellent operating profit at EUR 1.1 billion

    Group financial results 2Q 2017 L/H: excellent operating profit at EUR 1.1 billion (EUR mn) Operating profit by source Operating profit by line +12.0% +12.0% +70 +38 1,128 1,128 +76 1,007 1,007 -13 -51 220 205 97 85 220 190 528 592 Operating Loadings Investment Expenses Technical Impact of Operating

  28. Slide 28: L/H: operating profit – comments

    Group financial results 2Q 2017 L/H: excellent operating profit at EUR 1.1 billion Comments  1H OP at 57% of FY target range midpoint  Technical margin recovers 1H 2017 operating profit of EUR 2.3bn at Prior year result affected by one-off charges. excellent level. Improved contribution from Franc

  29. Slide 29: L/H: VNB up 38 percent on successful business mix shift

    Group financial results 2Q 2017 L/H: VNB up 38 percent on successful business mix shift Value of new business New business margin Operating profit EUR mn 2Q 17 Δ p.y. 2Q 17 Δ p.y. 2Q 17 Δ p.y. Total L/H segment 469 +37.6% 3.4% +0.9%-p 1,128 +12.0% Large OEs Germany Life 153 +44.9% 4.0% +1.2%-p 286 +

  30. Slide 30: L/H: VNB – comments

    Group financial results 2Q 2017 L/H: VNB up 38 percent on successful business mix shift Comments New business Operating profit  Successful new business management  USA – profitability with further progress Outstanding NBM and VNB prove that our Increase largely driven by better result from VA prod

  31. Slide 31: L/H: EUR 1 billion investment margin

    Group financial results 2Q 2017 L/H: EUR 1 billion investment margin, up 4 percent in line with reserves Investment margin Economic reinvestment yield (debt securities; in %) (Yields are pro-rata) 2Q 16 2Q 17 2.1 1.9 Based on Ø book value of assets1 (EUR bn) 507 516 Current yield 0.9% 0.9% Based on

  32. Slide 32: L/H: investment margin – comments

    Group financial results 2Q 2017 L/H: EUR 1 billion investment margin, up 4 percent in line with reserves Comments  Yield decline mitigated  Investment margin (in %) – on track Current yield based on aggregate policy reserves Investment margin strong at 24bps (unchanged). declines 1bp only, support

  33. Slide 33: L/H: SFCRs confirm resilience of German Life industry

    Group financial results 2Q 2017 L/H: SFCRs confirm resilience of German Life industry Reported Solvency II ratios and market share1 Solvency II ratio w/o transitionals and market share1 >350% 56% Allianz Leben 379%2 >350% 34% Allianz Leben 379% 300 - 350% 17% 300 - 350% 1% 250 - 300% 13% 250 - 300%

  34. Slide 34: L/H: SFCRs – comments

    Group financial results 2Q 2017 L/H: SFCRs confirm resilience of German Life industry Comments  Transitional measures  Allianz Leben reported Solvency II ratio at 379% Transitional measures allow insurers to smooth the With transitional measures Allianz Leben Solvency full implementation of Solven

  35. Slide 35: AM: EUR 55 billion 3rd party net inflows

    Group financial results 2Q 2017 AM: EUR 55 billion 3rd party net inflows – best quarterly level ever (EUR bn) Total assets under management 3rd party assets under management development -0.1% +0.2% 1,871 1,916 1,915 Allianz Group 514 509 510 +51.6 +15.2 assets 1,403 +3.2 1,406 -65.7 -0.9 3rd party A

  36. Slide 36: AM: net inflows – comments

    Group financial results 2Q 2017 AM: EUR 55 billion 3rd party net inflows – best quarterly level ever Comments  3rd party AuM AllianzGI – close to record level  Net inflows PIMCO: EUR 52bn 3rd party net inflows, positive markets, but negative Trend of 3rd party net inflows further accelerates, F/X

  37. Slide 37: AM: revenues up 8 percent

    Group financial results 2Q 2017 AM: revenues up 8 percent (EUR mn) Revenues development1 PIMCO3 AllianzGI4 +8.1% +8.1% +3.9% Internal growth +6.1% +5.6% +3.3% 1,091 466 1,556 1,010 28 448 88 59 1,440 35 Performance fees 40 74 Other net fee and commission income (AuM driven fees) 1,364 1,476 975 1,07

  38. Slide 38: AM: revenues – comments

    Group financial results 2Q 2017 AM: revenues up 8 percent Comments  Revenues segment – up 8% EUR 82bn net inflows over the last four quarters contribute to higher average 3rd party AuM (+12% versus 2Q 2016), resulting in higher AuM driven fees (Δ EUR +112mn/+8%). Performance fees support increase (

  39. Slide 39: AM: strong operating profit, driven by PIMCO

    Group financial results 2Q 2017 AM: strong operating profit, driven by PIMCO (EUR mn) Operating profit drivers PIMCO +16.8% +17.2% Internal +14.4% growth 450 384 +74 +12 +12 5841 5001 -14 62.0 58.8 2Q 16 2Q 17 CIR (in %) 65.3 62.5 AllianzGI Operating AuM Performance Expenses F/X Operating -0.4% prof

  40. Slide 40: AM: operating profit – comments

    Group financial results 2Q 2017 AM: strong operating profit, driven by PIMCO Comments  Segment – OP rises 17% Significant improvement versus 2Q 2016 following higher average 3rd party AuM. OP even better than strong result in 1Q 2017 (Δ EUR +12mn/+2%). 50% of FY 2017 outlook midpoint achieved in 1H

  41. Slide 41: CO: improving

    Group financial results 2Q 2017 CO: improving (EUR mn) Operating loss development and components +23 +9 0 -6 -224 -249 +10.2% Operating Holding & Banking Alternative Consoli- Operating result Treasury Investments dation result 2Q 16 2Q 17 Δ 2Q 17/16 © Allianz SE 2017 2Q 17 -255 26 5 0 2Q 16 -278 17

  42. Slide 42: CO: improving – comments

    Group financial results 2Q 2017 CO: improving Comments  Holding & Treasury with good improvement Driver is better net interest result (Δ EUR +38mn) mainly due to increase in dividends received and higher interest income from third-party loans.  Banking benefits from better result in Germany Result

  43. Slide 43: Group: shareholders' net income at EUR 2.0 billion

    Group financial results 2Q 2017 Group: shareholders’ net income at EUR 2.0 billion EUR mn 2Q 16 2Q 17 Change Operating profit 2,383 2,928 +545 Non-operating items -608 -43 +565 Realized gains/losses (net) 267 337 +70 Impairments (net) -383 -59 +323 Income from financial assets and liabilities carrie

  44. Slide 44: Group: net income – comments

    Group financial results 2Q 2017 Group: shareholders’ net income at EUR 2.0 billion Comments  Shareholders´ net income up 83%  Restructuring charges Shareholders’ net income at 29% of FY 2016 result. Restructuring charges driven by “Smart Prices & Prior year result impacted by disposal of Korean Li

  45. Slide 45: Allianz and LV= to create UK's 3rd largest P/C company

    Group financial results 2Q 2017 Allianz and Liverpool Victoria (LV=) to create UK’s 3rd largest P/C company Allianz UK Allianz UK and LV= to create 3rd largest P/C company1 LV= General Insurance Key figures 2016 Key figures 2016 Market position2 Market position2 Market position2 # 5 in general insur

  46. Slide 46: Allianz and LV= – rationale and deal structure

    Group financial results 2Q 2017 Allianz and Liverpool Victoria (LV=) to create UK’s 3rd largest P/C company Comments Rationale Deal structure  Leading market position …  Fixed price of GBP 1,020mn for 100%. Creates 3rd largest insurer in the UK Implied PE 2018e at ~11 times1  Price paid includes

  47. Slide 47: Status quo and ambitions for 2018

    Group financial results 2Q 2017 Status quo and ambitions for 2018 6M 17 2018 6M 17 2018 Businesses with 7.7%1 5%1 EPS Growth NPS above market 55%3 75% SII interest rate 13.4%2 13% RoE Allianz Group sensitivity 11%-p <11%-p 94.6% 94% P/C CR PIMCO CIR 59.4% 60% L/H OEs with 77%2 100% RoE ≥10% IMIX 70%

  48. Slide 48: Agenda

    3 1 CEO assessment and outlook Oliver Bäte 2 Group financial results Dieter Wemmer 3 Glossary © Allianz SE 2017

  49. Slide 49: 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

  50. Slide 50: 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

  51. Slide 51: 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

  52. Slide 52: 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

  53. Slide 53: 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

  54. Slide 54: 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

  55. Slide 55: 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

  56. Slide 56: 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

  57. Slide 57: 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

Allianz — Q2 2017 Earnings Presentation on 6ix