Allianz SE · XETR:ALV
Allianz — Q3 2023 Earnings Presentation
50 slides from Allianz's earnings presentation, Nov 10, 2023
Slide 1: Group financial results 2023
Group financial results 2023 Allianz Investor Relations App Apple App Store Google Play Store © Allianz 2023 Munich November 10, 2023
Slide 2: Content/topics
Content/topics Group financial results 3Q 2023 Glossary Disclaimer Note: The financial results are based on the new IFRS 9 (Financial Instruments) and IFRS 17 (Insurance Contracts) accounting standards, which have been adopted as of 1 January 2023. Comparative periods have been adjusted to reflect t
Slide 3: Group 9M: operating profit strong at EUR 11bn
GROUP FINANCIAL RESULTS 3Q 2023 Group 9M: operating profit strong at EUR 11bn Group Property-Casualty Life/Health Asset Management Total business volume 9M 23 in EUR bn (internal growth vs. prior year in %) 122.1 (+7.0%) 58.9 (+11.2%) 57.9 (+3.8%) 5.8 (-1.7%) Operating profit 9M 23 in EUR mn (vs. pr
Slide 4: Group 9M: operating profit strong at EUR 11bn
GROUP FINANCIAL RESULTS 3Q 2023 Group 9M: operating profit strong at EUR 11bn Comments • Internal growth at 7.0% • P/C – good profitability and double-digit growth Internal growth in P/C at 11.2%. Consolidation (+0.2%) OP of EUR 5.3bn (+1%) at 76% of FY outlook midpoint. and F/X (-2.5%) lead to tota
Slide 5: Group 3Q: EUR 3.5bn operating profit
GROUP FINANCIAL RESULTS 3Q 2023 Group 3Q: EUR 3.5bn operating profit Group Property-Casualty Life/Health Asset Management Total business volume 3Q 23 in EUR bn (internal growth vs. prior year in %) 36.5 (+9.3%) 17.2 (+10.8%) 17.5 (+8.1%) 2.0 (+4.5%) Operating profit 3Q 23 in EUR mn (vs. prior year i
Slide 6: Group 3Q: EUR 3.5bn operating profit
GROUP FINANCIAL RESULTS 3Q 2023 Group 3Q: EUR 3.5bn operating profit Comments • Internal growth at 9.3% • P/C – solid result with high level of NatCat (EUR 1.3bn) Internal growth in P/C at 10.8% and L/H at 8.1%. Lower operating profit driven by insurance service result, Consolidation (+0.0%) and F/X
Slide 7: Group: 212% solvency II ratio
GROUP FINANCIAL RESULTS 3Q 2023 Group: 212% solvency II ratio Comprehensive s/h capital S/h equity – key sensitivities (EUR bn) +2.4% +30% +4% Equity markets -30% -4% 86.1 86.7 88.7 -1% Interest rate +50bps 31.7 32.4 32.6 SII non-parallel -50bps +1% Net CSM1 54.4 54.3 56.1 on gov. bonds -1% S/h equi
Slide 8: Group: 212% solvency II ratio
GROUP FINANCIAL RESULTS 3Q 2023 Group: 212% solvency II ratio Comments • Comprehensive shareholders’ capital • SII ratio In 3Q 2023, shareholders’ equity increases by EUR 1.8bn. Increase of 3%-p from 208% to 212%. Major drivers: Major drivers: + 7%-p organic capital generation (+2%-p after tax and +
Slide 9: Group: 7%-p capital generation
GROUP FINANCIAL RESULTS 3Q 2023 Group: 7%-p capital generation Own funds +3.0 80.7 +0.1 81.5 (EUR bn) -0.6 77.9 -1.4 -0.3 +1.5 +1.2 83.2 81.8 81.5 80.7 80.5 +0.7 -0.3 P/C AM L/H CO/Conso. 31.12.22 30.06.23 31.12.2021 Regulatory/ Regulatory Operating SII SII Market Market impact Capital Capitalmgmt./
Slide 10: Group: 7%-p capital generation
GROUP FINANCIAL RESULTS 3Q 2023 Group: 7%-p capital generation Comments • 7%-p SII capital generation pre-tax/dividend • Capital management/management actions Capital generation after tax and dividend at a good level of -3%-p driven by dividend accrual. +2%-p despite growth-related capital requireme
Slide 11: P/C: double-digit internal growth
GROUP FINANCIAL RESULTS 3Q 2023 P/C: double-digit internal growth (EUR mn) Total business volume Rate change on renewals 3Q 23 Total growth Internal growth 9M 23 12M 22 ∆ p.y. ∆ p.y. Total P/C segment 17,200 +6.1% +10.8% +6.9% +4.9% Selected OEs Germany 2,531 +7.1% +7.1% +6.6% +3.5% United Kingdom 1
Slide 12: P/C: double-digit internal growth
GROUP FINANCIAL RESULTS 3Q 2023 P/C: double-digit internal growth Comments • Excellent internal growth of 10.8% • CEE – Romania, Austria, and Hungary drive growth Continued strong growth momentum driven by price • Italy – good growth mainly driven by price (+5.3%), volume (+4.9%), and service fees (
Slide 13: P/C: strong underlying performance, high NatCat
GROUP FINANCIAL RESULTS 3Q 2023 P/C: strong underlying performance, high NatCat +3.7%-p Operating profit drivers Combined ratio (EUR mn) (in %) 96.2 92.5 -25.0% Retail1 94.0 98.4 1,928 Commercial1 89.3 91.9 +129 1,446 3Q 22 3Q 23 -15 -595 Loss ratio2 68.1% 71.0% t/o NatCat impact 2.0% 7.3% t/o run-o
Slide 14: P/C: strong underlying performance, high NatCat
GROUP FINANCIAL RESULTS 3Q 2023 P/C: strong underlying performance, high NatCat Comments • Solid result despite NatCat • Run-off ratio at -4.3% Lower operating profit driven by insurance service result, Run-off stable versus prior year. Release of risk adjustment partly compensated by very good inve
Slide 15: P/C: operating profit at EUR 1.4bn
GROUP FINANCIAL RESULTS 3Q 2023 P/C: operating profit at EUR 1.4bn (EUR mn) Operating profit Combined ratio NatCat impact 3Q 23 ∆ p.y. 3Q 23 ∆ p.y. 3Q 23 ∆ p.y. Total P/C segment 1,446 -25.0% 96.2% +3.7%-p 7.3%-p +5.4%-p Selected OEs Germany 0 -100.0% 104.4% +16.3%-p 19.1%-p +17.8%-p United Kingdom
Slide 16: P/C: operating profit at EUR 1.4bn
GROUP FINANCIAL RESULTS 3Q 2023 P/C: operating profit at EUR 1.4bn Comments • Germany – impacted by NatCat • LatAm – good progress after portfolio turnaround in Brazil CR deteriorates due to several major hail and storm events. Profitability of Brazilian motor business improves significantly. • UK –
Slide 17: P/C: investment result up 19%
GROUP FINANCIAL RESULTS 3Q 2023 P/C: investment result up 19% Operating investment result Current yield Economic reinvestment yield (EUR mn) (debt securities; in %) (debt securities, in %) +19.2% 0.85 4.7 802 0.66 3.5 673 3Q 22 3Q 23 3Q 22 3Q 23 3Q 22 3Q 23 Total average asset base3 Duration4 Assets
Slide 18: P/C: investment result up 19%
GROUP FINANCIAL RESULTS 3Q 2023 P/C: investment result up 19% Comments • Interest & similar income • Reinvestment yield (debt securities) Driven by income from debt and cash due to higher interest Economic reinvestment yield rises to 4.7% benefitting from rates. changed yield environment. • Interest
Slide 19: L/H: new business sales grow 7%
GROUP FINANCIAL RESULTS 3Q 2023 L/H: new business sales grow 7% New business Value of new (EUR mn) PVNBP PVNBP by LoB margin business 3Q 23 ∆ p.y. 3Q 23 ∆ p.y. 3Q 23 ∆ p.y. 7% Total L/H segment 14,384 +6.9% 6.2% -0.3%-p 887 +2.1% 17% EUR mn USA 4,278 +4.3% 6.7% -1.0%-p 285 -9.0% 14,384 50% (+6.9%) G
Slide 20: L/H: new business sales grow 7%
GROUP FINANCIAL RESULTS 3Q 2023 L/H: new business sales grow 7% Comments • Value of new business up 2.1% to EUR 0.9bn • USA – largest contributor to VNB VNB growth driven by volume with attractive NBM. In local currency new business sales grow 13%. NBM strong at • PVNBP grows by EUR 0.9bn 6.7% with
Slide 21: L/H: net CSM slightly up
GROUP FINANCIAL RESULTS 3Q 2023 L/H: net CSM slightly up Contractual service margin CSM sensitivities (EUR mn) +984 +615 53,315 +30% +7% 52,854 -598 52,063 Equity markets -541 -30% -7% -1,252 VNB (3Q 23) 887 +50bps -1% Interest rate 31,591 + Non-attr. expenses 128 31,876 -50bps +1% + Scope/other -31
Slide 22: L/H: net CSM slightly up
GROUP FINANCIAL RESULTS 3Q 2023 L/H: net CSM slightly up Comments • Gross CSM down by EUR 0.8bn • Economic variances Normalized CSM growth of EUR 0.3bn more than offset by Adverse impact from market movements (EUR -0.9bn) in adverse impacts from economic variances (EUR -0.6bn) line with sensitivitie
Slide 23: L/H: operating profit good at EUR 1.3bn
GROUP FINANCIAL RESULTS 3Q 2023 L/H: operating profit good at EUR 1.3bn Operating profit Operating profit by LoB (EUR mn) (EUR mn) 3Q 22 3Q 23 ∆ p.y. CSM release 1,302 1,252 -50 28% 33% Release of risk adjustment 149 132 -17 EUR mn 1,308 Variances from claims & expenses1 -136 -122 +14 (-4.9%) Losses
Slide 24: L/H: operating profit good at EUR 1.3bn
GROUP FINANCIAL RESULTS 3Q 2023 L/H: operating profit good at EUR 1.3bn Comments • Operating profit good at EUR 1.3bn • 9M 2023 – OP at 77% of FY outlook midpoint CSM release in line with expectations. CSM release slightly lower mainly due to F/X (EUR -37mn). Annualized L/H segment 9M 2022 9M 2023 ∆
Slide 25: L/H: good profitability across operating entities
GROUP FINANCIAL RESULTS 3Q 2023 L/H: good profitability across operating entities (EUR mn) CSM Operating profit ∆ QTD t/o CSM 3Q 23 ∆ QTD 3Q 23 ∆ p.y. normalized1 release Total L/H segment 52,063 -1.5% +0.7% 1,308 -4.9% 1,252 USA 12,073 +2.2% +1.5% 253 -22.5% 301 Germany Life 16,168 -7.3% +1.0% 269
Slide 26: L/H: good profitability across operating entities
GROUP FINANCIAL RESULTS 3Q 2023 L/H: good profitability across operating entities Comments CSM Operating profit • USA • USA – good profitability CSM growth supported by F/X. Prior-year result from Allianz Life USA impacted by accounting • Germany Life mismatch due to first time adoption of IFRS 9/17
Slide 27: AM: total AuM stable at EUR 2.2tn
GROUP FINANCIAL RESULTS 3Q 2023 AM: total AuM stable at EUR 2.2tn Total assets under management 3rd party AuM split (EUR bn) (EUR bn) -0.0% Asset classes Regions Multi-assets Europe 2,141 2,163 2,162 EUR 168bn (-1.3%) EUR 569bn (-0.0%) Equities Asia Pacific Allianz Group 500 -1.8% 491 EUR 142bn (-4.
Slide 28: AM: total AuM stable at EUR 2.2tn
GROUP FINANCIAL RESULTS 3Q 2023 AM: total AuM stable at EUR 2.2tn Comments • Total AuM stable • Business highlights Total AuM stable in 3Q 2023 ( EUR -1bn): Favorable F/X Investment performance: 78% of 3rd party AuM outperform impact and net inflows offset by adverse market effects. benchmarks on a
Slide 29: AM: EUR 1.7tn 3rd party AuM
GROUP FINANCIAL RESULTS 3Q 2023 AM: EUR 1.7tn 3rd party AuM 3rd party assets under management development 3rd party net flow split (EUR bn) (EUR bn) +0.5% Fixed income +13.3 Asset classes Equities -3.8 1,662 +0.6 +10.0 +34.4 1,670 Multi-assets -0.3 -37.1 Alternatives +1.3 America +8.0 +10.5 Regions
Slide 30: AM: EUR 1.7tn 3rd party AuM
GROUP FINANCIAL RESULTS 3Q 2023 AM: EUR 1.7tn 3rd party AuM Comments • 3rd party AuM at EUR 1.7tn • 3rd party net flows PIMCO: EUR +10bn Slight increase of 3rd party AuM versus end of 2Q 2023 3Q 2023: EUR 10bn 3rd party net inflows driven by fixed income ( +0.5%). F/X and 3rd party net inflows more
Slide 31: AM: 4.5% internal revenue growth
GROUP FINANCIAL RESULTS 3Q 2023 AM: 4.5% internal revenue growth Revenues PIMCO AllianzGI (EUR mn) (EUR mn) (EUR mn) -2.7% -1.0% -8.2% Internal growth +4.5% +6.8% -3.3% 2,053 1,998 1,516 1,501 Performance fees 55 159 19 137 AuM driven & other revenues1 534 490 36 22 1,998 1,839 1,496 1,364 498 468 3
Slide 32: AM: 4.5% internal revenue growth
GROUP FINANCIAL RESULTS 3Q 2023 AM: 4.5% internal revenue growth Comments • Segment revenues – internal growth +4.5% • Segment margin – 38.9bps Excluding F/X, revenues increase by 3% due to • PIMCO margin – 37.9bps significantly higher performance fees at PIMCO, despite Decrease of 0.8bps driven by
Slide 33: AM: operating profit in line with outlook
GROUP FINANCIAL RESULTS 3Q 2023 AM: operating profit in line with outlook Operating profit drivers PIMCO (EUR mn) (EUR mn) +0.1% +1.6% +2.7% Internal growth 7871 +68 7881 615 624 16 -17 96 Performance fee impact2 -50 OP excl. performance 59.4 58.4 CIR (in %) fee impact2 772 -10.3% fee impact2 692 3Q
Slide 34: AM: operating profit in line with outlook
GROUP FINANCIAL RESULTS 3Q 2023 AM: operating profit in line with outlook Comments • Segment – OP at EUR 788mn • AllianzGI – OP at EUR 166mn OP increases 6% excluding F/X as higher levels of Lower operating expenses do not fully compensate for lower performance fees and other revenues more than AuM
Slide 35: CO: better than expected
GROUP FINANCIAL RESULTS 3Q 2023 CO: better than expected Operating result development and components (EUR mn) +28 -59 -21 -71 -16 -5 +21.8% Operating Holding & Banking Alternative Consoli- Operating result Treasury Investments dation result 3Q 22 3Q 23 3Q 23 -116 47 11 -13 3Q 22 -100 19 31 -8 35
Slide 36: CO: better than expected
GROUP FINANCIAL RESULTS 3Q 2023 CO: better than expected Comments • Operating loss at 9% of FY outlook midpoint (better) Increase in contribution from Banking driven by higher interest rates. Lower investment income from inflation- linked bonds and dividends. • 9M operating loss of EUR -358mn (∆ EUR
Slide 37: Group: s/h core net income at EUR 2.1bn
GROUP FINANCIAL RESULTS 3Q 2023 Group: s/h core net income at EUR 2.1bn (EUR mn) 3Q 22 3Q 23 p.y. Operating profit 4,062 3,468 -594 Non-operating items -3 -665 -662 Realized gains/losses (net) 469 -233 -703 Expected credit loss and impairments (net) 22 120 +98 Result from assets and liabilities me
Slide 38: Group: s/h core net income at EUR 2.1bn
GROUP FINANCIAL RESULTS 3Q 2023 Group: s/h core net income at EUR 2.1bn Comments • S/h core net income down EUR 0.9bn to EUR 2.1bn • Result from assets and liabilities measured at FV Lower operating profit (∆ EUR -0.6bn) and non-operating Line item includes amortization of tax incentivized alternati
Slide 39: Summary – strong results across all dimensions
GROUP FINANCIAL RESULTS 3Q 2023 Summary – strong results across all dimensions 122bn 11.0bn 14.2bn +4.7% +3.6% +/- 1bn Facts Total business volume Operating profit OP outlook 2023 and figures 9M 2023 (EUR) 6.8bn 212% 1.5bn +25.5% Target: ≥ 180% Shareholders’ Solvency II ratio Share buy-back core net
Slide 40: Content/topics
Content/topics Group financial results 3Q 2023 Glossary Disclaimer
Slide 41: Glossary (1)
GLOSSARY Glossary (1) AGCS Allianz Global Corporate & Specialty AllianzGI Allianz Global Investors AM (The Allianz business segment) Asset Management APR Accident insurance with premium refund (“Unfallversicherung mit Beitragsrückzahlung”): Special form of accident insurance where the policyholder,
Slide 42: Glossary (2)
GLOSSARY Glossary (2) CEE Central and Eastern Europe CIR Cost-income ratio: Operating expenses divided by operating revenues. CO (The Allianz business segment) Corporate and Other Comprehensive shareholders’ Shareholders’ equity plus net-CSM. capital Core EPS Core earnings per share: Calculated by d
Slide 43: Glossary (3)
GLOSSARY Glossary (3) dNPS Digital net promoter score: A measurement of customers’ willingness to recommend Allianz. ECL Expected credit loss Economic reinvestment yield Reflects the reinvestment yield, including F/X hedging costs on non-domestic hard-currency F/X bonds as well as expected F/X losse
Slide 44: Glossary (4)
GLOSSARY Glossary (4) IFRS International Financial Reporting Standards: As of 2002, the term IFRS refers to the total set of standards adopted by the International Accounting Standards Board. Standards approved before 2002 continue to be referred to as International Accounting Standards (IAS). IMIX
Slide 45: Glossary (5)
GLOSSARY Glossary (5) LatAm Latin America: South America and Mexico LIC Liability for incurred claims LoB Line of business LR Loss ratio: Represents the total of claims and insurance benefits incurred and the reinsurance result divided by insurance revenue. LRC Liability for remaining coverage: Liab
Slide 46: Glossary (6)
GLOSSARY Glossary (6) OP Operating profit: The portion of income before income taxes that is attributable to the ongoing core operations of the Allianz Group, which generally excludes the following non-operating effects: realized gains/losses (net), expected credit loss allowance, income from deriva
Slide 47: Glossary (7)
GLOSSARY Glossary (7) Pre-tax operating capital Represents the change in SII capitalization following regulatory model changes and which is attributable to generation a) changes in own funds as a consequence of operating SII earnings and b) changes in SCR as a consequence of business evolution. Fact
Slide 48: Glossary (8)
GLOSSARY Glossary (8) TBV Total business volume: It presents a measure for the overall amount of business generated during a specific reporting period. According to our business segments, total business volume in the Allianz Group comprises: - Gross premiums written as well as fee and commission inc
Slide 49: Content/topics
Content/topics Group financial results 3Q 2023 Glossary Disclaimer
Slide 50: Cautionary note regarding forward-looking statements
DISCLAIMER Cautionary note regarding forward-looking statements This document includes forward-looking state- dustry generally, (iv) the frequency and severity No duty to update ments, such as prospects or expectations, that of insured loss events, including those resulting Allianz assumes no obliga