Allianz Reports Strong Q1 Results

May 6, 2004

Germany’s Allianz Group marked the end of the first quarter of 2004 with a surge in operating earnings and profits in all four of its main business segments.

The group’s report, posted on its Website, indicated provisional figures for the period showed an operating result of approximately 1.1 billion euros ($1.33 billion), an increase of around 35 percent above the year-earlier value of 834 million euros ($1.01 billion). Estimated profits after taxes are around 650 million euros ($788 million) compared to a net loss of 546 million euros ($662.3 million) in the first quarter of 2003.

Allianz noted that the results were helped significantly by “favorable conditions in the capital markets.” The recent rise in the value of shares on European stock markets has in fact helped to restore the value of most investments, and has reversed the sharp declines experienced in 2001 through the beginning of 2003.

Allianz said: “Total premium income in insurance business in the first quarter of 2004 amounted to approximately 25 billion euros [$30.32 billion] and was in the region of the figure reported in the previous year (25.1 billion euros [$30.44 billion]). Adjusted for consolidation and exchange rate effects, growth reached around 3 percent.

“In property and casualty insurance in particular, emphasis was placed on profitable growth. A strict underwriting policy and a pricing structure geared appropriately to risk contributed to further improvement in the combined ratio – i.e. the ratio of claims and expenses to premiums earned – to less than 96 percent (Q1 2003: 97.7 percent).”

Allianz may also finally be seeing the light at the end of the tunnel for its beleaguered banking subsidiary, Dresdner Bank. The report noted that “expenses and risk provisions were significantly reduced,” and that the bank had “contributed to the Allianz Banking segment with an operating result in the order of around 170 million euros [$206 million]. A positive result after taxes is therefore achieved – following a loss of 353 million euros [$428.2 million] in the first quarter of the previous year.”

“The consistent implementation of our 3 plus 1 Program continues to bear fruit. The results of the first quarter are in keeping with the positive trend of the previous year and show that all segments are contributing toward improving profitability,” commented Chairman of the Board of Management Michael Diekmann at the Annual General Meeting 2004 in Munich. “We’re delivering on our promises.”

Stock markets reacted positively to the good news with Allianz ADR shares gaining 3.02 percent to close at $10.90 on the NYSE.

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