Allianz SE · XETR:ALV
Allianz — Q1 2019 Earnings Presentation
45 slides from Allianz's earnings presentation, May 14, 2019
Slide 1: 1Q 2019 Analyst conference call
1Q 2019 Giulio Terzariol Chief Financial Officer Analyst conference call May 14, 2019 © Allianz SE 2019
Slide 2: Content
CONTENT GROUP FINANCIAL RESULTS 1 1Q 2019 GLOSSARY 2 DISCLAIMER © Allianz SE 2019 2
Slide 3: Group: good start into 2019, operating profit up 7.5%
Group financial results 1Q 2019 Group: good start into 2019, operating profit up 7.5% Total revenues (EUR bn) Operating profit drivers (EUR mn) +9.1% +7.5% +7.5% Internal growth +181 +27 +18 +3 2,962 36.9 40.3 2,756 -22 1Q 18 1Q 19 Shareholders’ net income (EUR mn) +1.6% Operating P/C L/H AM CO Cons
Slide 4: Group: good start into 2019, operating profit up 7.5% - comments
Group financial results 1Q 2019 Group: good start into 2019, operating profit up 7.5% Comments • Internal growth strong at 7.5% • RoE (annualized) stable at 13.7% Strong internal growth in L/H +11.5% and P/C +4.6%. • P/C – strong OP growth -4.8% internal growth in AM with lower average OP rises stro
Slide 5: Group: SII capitalization on comfortable level
Group financial results 1Q 2019 Group: SII capitalization on comfortable level Shareholders’ equity (EUR bn) Key sensitivities (EUR bn) +9.7% Equity markets -30% -4.2 67.2 Unrealized 61.2 gains/losses1 6.9 11.9 +50bps -4.4 Interest rate Retained earnings2 25.4 26.4 -50bps +4.3 Paid in capital 28.9 2
Slide 6: Group: SII capitalization on comfortable level - comments
Group financial results 1Q 2019 Group: SII capitalization on comfortable level Comments • Shareholders’ equity – EUR 6.0bn increase in 1Q • SII ratio – on comfortable level In 1Q 2019, shareholders’ equity increased by In 1Q 2019, the SII ratio declined versus FY 2018. EUR +6.0bn. The main drivers w
Slide 7: Group: capital management drives SII ratio
Group financial results 1Q 2019 Group: capital management drives SII ratio Own funds +2.8 +2.6 78.6 (EUR bn) 76.8 -2.1 -1.2 -0.4 +1.4 +1.1 +0.6 -0.5 P/C AM L/H CO/Conso. 31.12.18 Regulatory/ Operating SII Market Capital mgmt./ Tax/ 31.03.19 model changes earnings impact management other actions SII
Slide 8: Group: capital management drives SII ratio - comments
Group financial results 1Q 2019 Group: capital management drives SII ratio Comments • Good capital generation reduced by strong growth • Business evolution SII capital generation – net of tax and dividend – Strong P/C NPE growth is the main driver. L/H new amounts to ~2%-p in 1Q 2019. Lower operatin
Slide 9: P/C: a strong start to the year
Group financial results 1Q 2019 P/C: a strong start to the year EUR mn Revenues YTD change on renewals 1Q 19 Total growth Internal growth 1Q 19 Momentum ∆ p.y. ∆ p.y. Total P/C segment 19,490 +6.3% +4.6% +1.7% n.a. Selected OEs Germany1 4,731 +2.4% +2.1% +2.3% stable France 1,529 +0.9% +0.9% +1.8% s
Slide 10: P/C: a strong start to the year - comments
Group financial results 1Q 2019 P/C: a strong start to the year Comments • Widespread growth • Spain – modest volume-driven growth Strong internal growth of +4.6% (FY 2018: 5.7%) with Modest growth in motor and personal lines. Commercial flat. positive volume (+2.8%) and price (+1.8%) effects. Direc
Slide 11: P/C: higher underwriting result drives OP growth
Group financial results 1Q 2019 P/C: higher underwriting result drives OP growth Operating profit drivers (EUR mn) Combined ratio (in %) +14.2% -1.1%-p +160 +24 1,455 94.8 93.7 1,274 -3 Loss ratio 66.5 65.9 NatCat impact2 2.6 1.1 (in %-p) Expense ratio 28.3 27.8 1Q 18 1Q 19 Operating Underwriting In
Slide 12: P/C: higher underwriting result drives OP growth - comments
Group financial results 1Q 2019 P/C: higher underwriting result drives OP growth Comments • Operating profit – at 26% of FY outlook mid-point • Expense ratio – continued progress OP rises due to a significantly better underwriting ER declines -0.5%-p vs. 1Q 2018 due to a -0.7%-p result. Strong top-l
Slide 13: P/C: operating profit up 14%
Group financial results 1Q 2019 P/C: operating profit up 14% EUR mn Operating profit Combined ratio NatCat impact on CR 1Q 19 ∆ p.y. 1Q 19 ∆ p.y. 1Q 19 ∆ p.y. Total P/C segment 1,455 +14.2% 93.7% -1.1%-p 1.1%-p -1.5%-p Selected OEs Germany1 271 +170.9% 92.8% -8.1%-p 3.2%-p -4.8%-p France 109 +20.0%
Slide 14: P/C: operating profit up 14% - comments
Group financial results 1Q 2019 P/C: operating profit up 14% Comments • Germany – on very good level • UK – stable on good level CR improves strongly mainly due to lower NatCat and Adverse large loss development offset by higher run- large losses. Run-off and ER (∆ -0.5%-p) also better. off. Operati
Slide 15: P/C: resilient investment income
Group financial results 1Q 2019 P/C: resilient investment income Operating investment result1 Current yield Economic reinvestment yield (EUR mn) (debt securities; in %) (debt securities; in %) +3.4% 0.63 0.63 1.8 1.7 687 711 1Q 18 1Q 19 1Q 18 1Q 19 1Q 18 1Q 19 Total average asset base4 Duration5 (EU
Slide 16: P/C: resilient investment income - comments
Group financial results 1Q 2019 P/C: resilient investment income Comments • Interest & similar income • Economic reinvestment yield Slightly higher income on equity & debt. Slight decline versus FY 2018 level of 1.9% is due • Net harvesting & other to market movements and emerging market bonds. Main
Slide 17: L/H: 18% new business growth with NBM 3.5%
Group financial results 1Q 2019 L/H: 18% new business growth with NBM 3.5% PVNBP share by line PVNBP by OE (EUR mn) Total L/H segment 3.3 3.5 Other OEs Germany Life 1,494 (+29.7%) 6,153 (+40.5%) USA 23% 20% 3.9 2,710 (+35.2%) Protection & health 3.7 Asia-Pacific 15% 2.3 1,233 (-18.5%) Unit-linked 2.
Slide 18: L/H: 18% new business growth with NBM 3.5% - comments
Group financial results 1Q 2019 L/H: 18% new business growth with NBM 3.5% Comments PVNBP by line PVNBP by OE • New business driven by Germany Life and USA • Germany Life – capital-efficient products +30% New business with capital-efficient products is up by In addition higher sales for GS&A (∆ EUR
Slide 19: L/H: operating profit up 2.5% to EUR 1.1bn
Group financial results 1Q 2019 L/H: operating profit up 2.5% to EUR 1.1bn (EUR mn) Operating profit by source1 Operating profit by line +2.5% +2.5% +97 1,069 +107 1,096 +5 1,069 1,096 -113 -69 239 204 134 104 179 170 547 588 Operating Loadings Investment Expenses Technical Impact of Operating profi
Slide 20: L/H: operating profit up 2.5% to EUR 1.1bn - comments
Group financial results 1Q 2019 L/H: operating profit up 2.5% to EUR 1.1bn Comments • OP at 26% of FY target range midpoint Operating profit by line Higher loadings and fees and favorable true-ups • Protection & health more than offset lower investment margin. Lower contribution from USA (∆ EUR -27m
Slide 21: L/H: value of new business up 25%
Group financial results 1Q 2019 L/H: value of new business up 25% EUR mn Value of new business New business margin Operating profit 1Q 19 ∆ p.y. 1Q 19 ∆ p.y. 1Q 19 ∆ p.y. Total L/H segment 609 +24.5% 3.5% +0.2%-p 1,096 +2.5% Germany Life 243 +40.7% 3.9% +0.0%-p 300 -10.2% USA 88 +17.2% 3.3% -0.5%-p
Slide 22: L/H: value of new business up 25% - comments
Group financial results 1Q 2019 L/H: value of new business up 25% Comments New business Operating profit • NBM above target level of 3.0% • Germany Life – strong contribution • VNB at 29% of FY 2018 Lower investment margin (∆ EUR -73mn) mainly Combination of new business growth (+17.5%) and due to h
Slide 23: L/H: investment margin at 19bps
Group financial results 1Q 2019 L/H: investment margin at 19bps Investment margin Economic reinvestment yield (debt securities; in %) (Yields are pro-rata) 1Q 18 1Q 19 1.9 1.9 Based on Ø book value of assets1 (EUR bn) 526 552 Current yield 0.80% 0.80% Based on Ø aggregate policy reserves (EUR bn) 43
Slide 24: L/H: investment margin at 19bps - comments
Group financial results 1Q 2019 L/H: investment margin at 19bps Comments • Investment margin down by EUR 113mn • Net harvesting and other (in %) – up by 7bps Lower investment margin (∆ -4bps to 19bps) partially Main driver is higher income from assets/liabilities at compensated by higher reserve bas
Slide 25: AM: third-party AuM up 8%
Group financial results 1Q 2019 AM: third-party AuM up 8% (EUR bn) Total assets under management 3rd party assets under management development +7.1% +7.8% 2,101 1,961 +33.2 1,548 +60.9 1,436 +20.7 Allianz Group 553 526 +5.3% assets -2.9 +17.8 340 AllianzGI 319 +6.5% Asset classes Investment vehicles
Slide 26: AM: third-party AuM up 8% - comments
Group financial results 1Q 2019 AM: third-party AuM up 8% Comments • Total AuM: +7% • 3rd party net flows PIMCO: EUR +21bn Total AuM at a new all-time high of EUR 2.1tn driven 3rd party net inflows stem from investment strategies by rising 3rd party and Allianz Group assets. like income, global and
Slide 27: AM: revenues stable
Group financial results 1Q 2019 AM: revenues stable (EUR mn) Revenues development PIMCO AllianzGI +1.0% +0.6% +2.8% Internal growth -4.8% -7.2% +2.1% 1,561 1,576 1,106 1,113 465 453 Performance fees 51 50 32 26 25 19 AuM driven & other revenues1 1,509 1,526 1,073 1,087 434 441 3rd party AuM margin2
Slide 28: AM: revenues stable - comments
Group financial results 1Q 2019 AM: revenues stable Comments • Segment revenues – stable • PIMCO margin – impacted by one-offs AuM driven revenues slightly up by 1% supported by 1.5bps of margin reduction stem from the successful positive F/X. Adjusted for F/X, lower revenues are launch of a closed-
Slide 29: AM: OP below prior year, on track to reach full-year target
Group financial results 1Q 2019 AM: OP below prior year, on track to reach full-year target (EUR mn) Operating profit drivers PIMCO -3.7% -5.8% -9.6% Internal growth 5951 480 452 +23 +35 5731 -77 -3 56.6 59.4 CIR (in %) 61.9 63.7 CIR (in %) 1Q 18 1Q 19 Operating AuM driven & Performance Expenses F/X
Slide 30: AM: OP below prior year, on track to reach full-year target - comments
Group financial results 1Q 2019 AM: OP below prior year, on track to reach full-year target Comments • Segment – on track despite negative 2018 • AllianzGI – OP up 5% market impact OP grows by 4.7%. Adjusted for F/X, OP increase OP down 4% versus previous year, on track to reach still strong, driven
Slide 31: CO: improving
Group financial results 1Q 2019 CO: improving (EUR mn) Operating loss development and components +24 +2 0 -8 -164 -182 -9.7% Operating Holding & Banking Alternative Consoli- Operating result Treasury Investments dation result 1Q 18 1Q 19 ∆ 1Q 19/18 © Allianz SE 2019 1Q 19 -188 12 11 0 1Q 18 -211 20
Slide 32: CO: improving - comments
Group financial results 1Q 2019 CO: improving Comments • Operating loss at 18% of FY outlook midpoint • Holding & Treasury Main reason is better result from Allianz Technology. • Banking Lower result due to disposal of Oldenburgische Landesbank in 1Q 2018. © Allianz SE 2019 32
Slide 33: Group: shareholders' net income at EUR 2.0bn
Group financial results 1Q 2019 Group: shareholders’ net income at EUR 2.0bn EUR mn 1Q 18 1Q 19 Change Operating profit 2,756 2,962 +206 Non-operating items -75 -235 -161 Realized gains/losses (net) 234 110 -125 Impairments (net) -69 -65 +4 Income from financial assets and liabilities carried at fai
Slide 34: Group: shareholders' net income at EUR 2.0bn - comments
Group financial results 1Q 2019 Group: shareholders’ net income at EUR 2.0bn Comments • Operating profit drives s/h net income • Tax rate at good level S/h net income up 1.6%. Higher operating profit Tax rate within expected range of (∆ EUR +206mn) more than offsets decline in 25%-27% for FY 2019. n
Slide 35: In summary, a good start into the year
Group financial results 1Q 2019 In summary, a good start into the year Group Property-Casualty Life/Health Asset Management Total revenues 1Q 19 in EUR bn (internal growth vs. prior year in %) 40.3 (+7.5%) 19.5 (+4.6%) 19.3 (+11.5%) 1.6 (-4.8%) Operating profit 1Q 19 in EUR mn (vs. prior year in %)
Slide 36: Glossary & Disclaimer
GLOSSARY & DISCLAIMER © Allianz SE 2019 36
Slide 37: 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 38: 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 39: 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 40: 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 41: 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 42: 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 43: 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 44: 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 45: 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