Allianz SE · XETR:ALV
Allianz — Q2 2020 Earnings Presentation
49 slides from Allianz's earnings presentation, Aug 5, 2020
Slide 1: 2Q 2020 Analyst conference call
2Q 2020 Giulio Terzariol Chief Financial Officer Analyst conference call August 5, 2020
Slide 2: Content
CONTENT 1 GROUP FINANCIAL RESULTS 2Q 2020 2 GLOSSARY DISCLAIMER © Allianz SE 2020
Slide 3: Group: resilient performance in 6M 2020
Group financial results 2Q 2020 Group: resilient performance in 6M 2020 COVID-19 impact Group Property-Casualty Life/Health Asset Management Total revenues 6M 20 in EUR bn (internal growth vs. prior year in %) 73.5 (-1.5%) 33.8 (+0.3%) 36.4 (-3.4%) 3.5 (+3.0%) Operating profit 6M 20 in EUR mn (vs. p
Slide 4: Group: resilient performance in 6M 2020 - comments
Group financial results 2Q 2020 Group: resilient performance in 6M 2020 Comments • Stable revenues • P/C – COVID-19 main OP driver In P/C internal growth slows down to +0.3%. L/H segment OP declines mainly due to a lower underwriting was most impacted by social distancing – resulting in an result (∆
Slide 5: Group: 2Q operating profit solid at EUR 2.6bn
Group financial results 2Q 2020 Group: 2Q operating profit solid at EUR 2.6bn Total revenues (EUR bn) Operating profit drivers (EUR mn) -6.8% -18.8% -7.7% Internal growth 3,159 33.2 30.9 -240 2,565 -240 -38 -3 -73 COVID-19 2Q 19 2Q 20 -0.4 -0.1 – – – -0.5 impact (bn) Shareholders’ net income (EUR mn
Slide 6: Group: 2Q operating profit solid at EUR 2.6bn - comments
Group financial results 2Q 2020 Group: 2Q operating profit solid at EUR 2.6bn Comments • Revenues impacted by social distancing • P/C – COVID-19 as main result driver P/C internal growth was -1.6%. L/H segment was most Operating profit declines mainly due to a lower impacted by social distancing – r
Slide 7: Group: SII ratio remains at a good level
Group financial results 2Q 2020 Group: SII ratio remains at a good level Shareholders’ equity (EUR bn) Key sensitivities (EUR bn) +3.9% 74.0 72.1 Equity markets -30% -3.8 69.4 Unrealized 17.7 11.7 18.5 +50bps -5.3 17.7 11.7 gains/losses1 Interest rate Retained earnings2 27.427.4 28.8 28.824.7 -50bps
Slide 8: Group: SII ratio remains at a good level - comments
Group financial results 2Q 2020 Group: SII ratio remains at a good level Comments • Shareholders’ equity – EUR 2.7bn increase • SII ratio – at a good level In 2Q 2020, shareholders’ equity increases by In 2Q 2020, our SII ratio declines versus 1Q 2020 driven EUR 2.7bn. The main drivers are higher ne
Slide 9: Group: good organic capital generation offset by market impact
Group financial results 2Q 2020 Group: good organic capital generation offset by market impact Own funds 84.0 (EUR bn) +2.4 +0.9 +0.2 80.7 78.1 -0.0 -0.9 +1.1 +1.0 +0.6 -0.4 P/C AM L/H CO/Conso. 31.12.19 31.03.20 Regulatory/ Operating SII Market Capital mgmt./ Tax/ 30.06.20 model changes earnings im
Slide 10: Group: good organic capital generation offset by market impact - comments
Group financial results 2Q 2020 Group: good organic capital generation offset by market impact Comments • SII capital generation • Business evolution SII capital generation – net of tax and dividend – amounts Business evolution at same level as in 1Q 2020. to ~+1.5%-p in 2Q 2020. We currently antici
Slide 11: P/C: growth impacted by COVID-19 – rate changes accelerate
Group financial results 2Q 2020 P/C: growth impacted by COVID-19 – rate changes accelerate EUR mn Revenues YTD change on renewals 2Q 20 Total growth Internal growth 6M 20 Momentum ∆ p.y. ∆ p.y. Total P/C segment 13,469 +0.3% -1.6% +4.5% n.a. Selected OEs Germany 2,008 +2.0% +2.0% +2.6% stable United
Slide 12: P/C: growth impacted by COVID-19 - comments
Group financial results 2Q 2020 P/C: growth impacted by COVID-19 – rate changes accelerate Comments • Lower volume more than offsets strong price effect • Australia – volume-driven decline Internal growth of -1.6%. A positive price effect was more COVID-19-driven lower volumes in workers‘ compensati
Slide 13: P/C: EUR -0.4bn COVID-19 impact on underwriting result
Group financial results 2Q 2020 P/C: EUR -0.4bn COVID-19 impact on underwriting result Operating profit drivers (EUR mn) Combined ratio (in %) -17.4% +1.2%-p 1,383 94.3 95.5 +10 1,143 -150 -101 Loss ratio 67.0 69.8 NatCat impact2 1.9 0.9 (in %-p) Expense ratio 27.3 25.7 2Q 19 2Q 20 Operating Underwr
Slide 14: P/C: EUR -0.4bn COVID-19 impact - comments
Group financial results 2Q 2020 P/C: EUR -0.4bn COVID-19 impact on underwriting result Comments • Operating profit – materially impacted by COVID-19 • Expense ratio – slightly better on underlying basis OP reduces EUR 0.2bn to EUR 1.1bn. The decline is Lower share of high-commission business at Alli
Slide 15: P/C: widely diverging COVID-19 impact across OEs
Group financial results 2Q 2020 P/C: widely diverging COVID-19 impact across OEs EUR mn Operating profit Combined ratio NatCat impact on CR 2Q 20 ∆ p.y. 2Q 20 ∆ p.y. 2Q 20 ∆ p.y. Total P/C segment 1,143 -17.4% 95.5% +1.2%-p 0.9%-p -1.0%-p Selected OEs Germany 225 +6.0% 94.8% -0.8%-p 1.1%-p -6.6%-p U
Slide 16: P/C: widely diverging COVID-19 impact - comments
Group financial results 2Q 2020 P/C: widely diverging COVID-19 impact across OEs Comments • Material COVID-19 impact at most OEs • Italy – excellent CR COVID-19 materially affected most OEs but the impacts Fewer weather claims, lower large losses and improved differed widely. While top-line was nega
Slide 17: P/C: lower income from equities and debt
Group financial results 2Q 2020 P/C: lower income from equities and debt Operating investment result1 Current yield Economic reinvestment yield (EUR mn) (debt securities; in %) (debt securities; in %) -13.6% 0.67 1.7 0.58 1.6 743 642 2Q 19 2Q 20 2Q 19 2Q 20 2Q 19 2Q 20 Total average asset base4 Dura
Slide 18: P/C: lower income from equities and debt - comments
Group financial results 2Q 2020 P/C: lower income from equities and debt Comments • Interest & similar income • Current yield Lower income from equities and debt. Dividend income Impacted by market movements and a higher average decline is due to reduced exposure as well as dividend asset base / hig
Slide 19: L/H: new business volume impacted by lockdown measures
Group financial results 2Q 2020 L/H: new business volume impacted by lockdown measures PVNBP share by line EUR mn 2Q 19 2Q 20 ∆ p.y. PVNBP 15,229 11,531 -24.3% Total L/H segment 3.6 3.1 Single premium 9,891 7,443 -24.7% Recurring premium 747 607 -18.7% Protection & health 6.3 13% 17% 6.3 APE 1,736 1
Slide 20: L/H: new business volume - comments
Group financial results 2Q 2020 L/H: new business volume impacted by lockdown measures Comments PVNBP by line PVNBP by OE • New business impacted by lockdown measures • Germany Life – share of preferred lines at 80% New business volume drop of 24.3% driven by Capital-efficient business declines by 2
Slide 21: L/H: operating profit good at EUR 1.0bn
Group financial results 2Q 2020 L/H: operating profit good at EUR 1.0bn (EUR mn) Operating profit by source1 Operating profit by line -19.5% -19.5% 1,231 +72 1,231 +8 -40 269 991 -66 991 -214 106 252 316 100 266 539 373 Operating Loadings Investment Expenses Technical Impact of Operating 2Q 19 2Q 20
Slide 22: L/H: operating profit good at EUR 1.0bn - comments
Group financial results 2Q 2020 L/H: operating profit good at EUR 1.0bn Comments • Operating profit at good level Operating profit by line Decline due to favorable prior-year DAC movement, • Capital-efficient products higher hedging expenses in the U.S. traditional VA Favorable prior-year change in
Slide 23: L/H: NBM strong at 3.1%
Group financial results 2Q 2020 L/H: NBM strong at 3.1% EUR mn Value of new business New business margin Operating profit 2Q 20 ∆ p.y. 2Q 20 ∆ p.y. 2Q 20 ∆ p.y. Total L/H segment 357 -34.3% 3.1% -0.5%-p 991 -19.5% Germany Life 141 -39.1% 3.3% -0.7%-p 281 +5.2% Asia Pacific 55 -24.4% 5.1% -0.8%-p 120
Slide 24: L/H: NBM strong at 3.1% - comments
Group financial results 2Q 2020 L/H: NBM strong at 3.1% Comments New business Operating profit • NBM strong at 3.1% • Germany Life – very good level NBM decline mainly due to unfavorable market Higher contribution from capital-efficient products. movements (-1.4%-p) largely offset by better • USA –
Slide 25: L/H: stable investment margin
Group financial results 2Q 2020 L/H: stable investment margin Investment margin Economic reinvestment yield (debt securities; in %) 2Q 19 2Q 20 1.9 1.8 Based on Ø book value of assets1 (EUR bn) 577 610 Current yield 0.83% 0.73% Based on Ø aggregate policy reserves (EUR bn) 465 492 Current yield 1.03
Slide 26: L/H: stable investment margin - comments
Group financial results 2Q 2020 L/H: stable investment margin Comments • Investment margin up 1% to EUR 879mn • Investment margin down 1bp to 18bps Higher reserve base (+5.8%) more than offsets Higher gross investment margin and higher PHP lower investment margin (∆ -1bp to 18bps). lead to investmen
Slide 27: AM: total AuM increase by 5%
Group financial results 2Q 2020 AM: total AuM increase by 5% (EUR bn) Total assets under management 3rd party AuM split +5.4% Asset classes Regions 2,268 2,250 Multi-assets Europe 2,134 EUR 151bn (+10.2%) EUR 526bn (+8.2%) Equities Asia Pacific Allianz Group assets 582 +2.7% 592 EUR 137bn (+17.4%) E
Slide 28: AM: total AuM increase by 5% - comments
Group financial results 2Q 2020 AM: total AuM increase by 5% Comments • Total AuM: +5% • Business highlights Increase to EUR 2.25tn primarily due to 3rd party AllianzGI: Strategic partnership with Virtus Investment assets, driven by positive market effects and Partners announced. Virtus will become
Slide 29: AM: 3rd party AuM up 6% due to markets and net flows
Group financial results 2Q 2020 AM: 3rd party AuM up 6% due to markets and net flows (EUR bn) 3rd party assets under management development 3rd party net flow split +6.5% Asset Fixed income +21.7 classes +102.3 1,658 Equities -0.8 1,557 +3.1 +22.8 -27.4 Multi-assets +3.1 Alternatives +1.9 Regions Am
Slide 30: AM: 3rd party AuM up 6% - comments
Group financial results 2Q 2020 AM: 3rd party AuM up 6% due to markets and net flows Comments • 3rd party AuM: +6% • 3rd party net flows PIMCO: EUR +23bn Increase driven by capital market recovery and 3rd party net inflows from investment strategies like 3rd party net inflows at PIMCO and AllianzGI;
Slide 31: AM: revenues resilient
Group financial results 2Q 2020 AM: revenues resilient (EUR mn) Revenues development PIMCO AllianzGI -1.4% +0.5% -6.6% Internal growth -3.1% -1.4% -7.6% 1,744 1,720 1,252 1,258 494 72 43 462 19 12 53 Performance fees 31 AuM driven & other revenues1 1,672 1,677 1,233 1,246 442 431 © Allianz SE 2020 3
Slide 32: AM: revenues resilient - comments
Group financial results 2Q 2020 AM: revenues resilient Comments • Segment revenues – nearly stable, supported by F/X • PIMCO margin Revenues decrease slightly by 1%. Excluding F/X, Margin at 36.7bps (2Q 2019: 38.5bps). Decrease revenues decrease by 3% driven by lower AuM driven due to lower share of
Slide 33: AM: EUR 640mn operating profit
Group financial results 2Q 2020 AM: EUR 640mn operating profit (EUR mn) Operating profit drivers PIMCO -5.7% -2.0% -7.2% Internal growth 6781 532 521 6401 +4 +11 33 17 Performance fee impact2 -52 OP excl. performance 57.5 58.6 CIR (in %) fee impact2 645 -3.5% 623 2Q 19 2Q 20 61.1 62.8 CIR (in %) Ope
Slide 34: AM: EUR 640mn operating profit - comments
Group financial results 2Q 2020 AM: EUR 640mn operating profit Comments • Segment – OP down by 6% • PIMCO – OP down 2% OP decreases by 6%. Excluding F/X, lower AuM driven Excluding F/X, OP decreases by 4% due to decline in revenues due to business mix and lower level of AuM driven revenues and less
Slide 35: CO: result impacted by lower dividends
Group financial results 2Q 2020 CO: result impacted by lower dividends (EUR mn) Operating loss development and components -131 -40 -5 -0 -27 -204 +55.3% Operating Holding & Banking Alternative Consoli- Operating result Treasury Investments dation result 2Q 19 2Q 20 ∆ 2Q 20/19 © Allianz SE 2020 2Q 20
Slide 36: CO: result impacted by lower dividends - comments
Group financial results 2Q 2020 CO: result impacted by lower dividends Comments • Operating loss at EUR -0.2bn Higher operating loss mainly due to lower dividends at Holding & Treasury and Alternative Investments. © Allianz SE 2020 36
Slide 37: Group: shareholders' net income at EUR 1.5bn
Group financial results 2Q 2020 Group: shareholders’ net income at EUR 1.5bn EUR mn 2Q 19 2Q 20 p.y. Operating profit 3,159 2,565 -594 Non-operating items -226 -333 -107 Realized gains/losses (net) 203 254 +51 Impairments (net) -80 -136 -55 Income from financial assets and liabilities carried at f
Slide 38: Group: shareholders' net income - comments
Group financial results 2Q 2020 Group: shareholders’ net income at EUR 1.5bn Comments • Shareholders’ net income down by EUR 0.6bn • Interest expenses from external debt Decline due to lower operating and non-operating profit. Lower interest expenses mainly as a result of lower • Non-OP down by EUR
Slide 39: Summary: robust performance in challenging environment
Group financial results 2Q 2020 Summary: robust performance in challenging environment 73bn 4.9bn 4.0bn Facts Revenues Operating profit Dividend paid and figures 6M 2020 (EUR) 2.9bn 187% 750mn Shareholders’ Solvency II ratio Share buy-back net income © Allianz SE 2020 39
Slide 40: Content
CONTENT 1 GROUP FINANCIAL RESULTS 2Q 2020 2 GLOSSARY DISCLAIMER © Allianz SE 2020
Slide 41: Glossary (1)
Glossary Glossary (1) AFS Available for sale: Available-for-sale investments are non-derivative financial assets which have been acquired neither for sale in the near term nor to be held to maturity. They are shown at fair value on the balance sheet. AGCS Allianz Global Corporate & Specialty Allianz
Slide 42: Glossary (2)
Glossary Glossary (2) Bps Basis points: 1 Basis point = 0.01%. CEE Central and Eastern Europe CIR Cost-income ratio: Operating expenses divided by operating revenues CO (The Allianz business segment) Corporate and Other CR Combined ratio: Represents the total of acquisition and administrative expens
Slide 43: Glossary (3)
Glossary Glossary (3) FIA Fixed index annuity: Annuity contract under which the policyholder can elect to be credited based on movements in equity or in bond market indices, with the principal remaining protected. FV Fair value: The price that would be received to sell an asset or paid to transfer a
Slide 44: Glossary (4)
Glossary Glossary (4) L/H (The Allianz business segment) Life and Health insurance L/H lines of business Guaranteed savings & annuities: Life insurance products linked to life expectancy, offering life and / or death benefits in the form of single or multiple payments to beneficiaries and possibly i
Slide 45: Glossary (5)
Glossary Glossary (5) LoB Line of business LR Loss ratio: Represents claims and insurance benefits incurred (net), divided by premiums earned (net). The calendar year (CY) loss ratio includes the results of the prior year’s reserve development in addition to the accident year (AY) loss ratio. MCEV M
Slide 46: Glossary (6)
Glossary Glossary (6) Operating SII earnings Operating SII earnings represent the change in own funds, before tax and dividend accrual, that is attributable to the Allianz Group’s ongoing core operations. As such, operating SII earnings comprise: expected return from existing business, new business
Slide 47: Glossary (7)
Glossary Glossary (7) Reinsurance Insurance companies transfer parts of the insurance risk they have assumed to reinsurance companies. Retained earnings In addition to the reserve legally required in the group parent company’s financial statements, this item mainly comprises the undistributed profit
Slide 48: Glossary (8)
Glossary Glossary (8) Statutory premiums Gross premiums written from the sales of life and health insurance policies, as well as gross receipts from sales of unit-linked and other investment-related products, in accordance with the statutory accounting principles applicable in the insurer’s home jur
Slide 49: Disclaimer
Disclaimer Disclaimer This document includes forward-looking statements, such as prospects or (viii) currency exchange rates, most notably the EUR/USD exchange rate, (ix) expectations, that are based on management's current views and changes in laws and regulations, including tax regulations, (x) th