Result pleases investors: Allianz buys back shares again

Result pleases investors
Allianz buys back shares again

After cautious forecasts in the summer, Allianz now sees itself on a stable growth course. The Management Board also has more good news up its sleeve for the shareholders: the Group will start a share buyback program in the coming weeks.

Allianz is heading towards a new record profit this year. CFO Giulio Terzariol determined after the third quarter that the operating result would be between the previous year’s level of 13.4 billion euros and 14.4 billion, i.e. in the upper half of the targeted range. In August he was still cautious in view of the Ukraine war. “Allianz’s robust earning power bodes well for our long-term growth course,” said the Italian on Wednesday evening in Munich.

alliance 189.20

In the summer, things went well for Germany’s largest insurer, especially in the property and casualty division. The operating result rose in the third quarter by seven percent to 3.48 billion euros. Analysts had credited Allianz with an average of only 3.39 billion. After nine months, Allianz is already at 10.2 billion euros.

The insurer is also underscoring the growing confidence with the second share buyback this year: in mid-November it wants to start buying up Allianz shares on the market for up to one billion euros. The buyback campaign should be completed by the end of 2023 at the latest. Similar to dividends, companies return excess capital to shareholders with share buybacks. Allianz had already bought back shares for a billion euros in two steps this year.

The industry regulator BaFin had warned European insurers to be “very careful” with distributions in view of the high level of inflation. Allianz’s solvency ratio shrank to 199 from 209 percent within a year by the end of September.

“Our excellent results this quarter once again demonstrate Allianz’s resilience and strength in a dramatic geopolitical and market environment,” said CEO Oliver Bäte. The strong balance sheet and capital management expertise also create “valuable options for Allianz that allow us to confidently face a changing economic environment.”

However, the expensive scandal surrounding the losses of US investors with Allianz hedge funds is still reflected in the net profit. After a billion-euro settlement with investors and the US authorities, after nine months a net result of 4.7 (6.9) billion euros was posted, a decrease of almost a third. In the operational business with property and life policies and investment funds, it had hardly any effect. After three quarters, sales were 5 percent up on the previous year at 116 billion euros.

In the third quarter, things went best in property and casualty insurance, where Allianz increased premium income by 14 percent. The division’s operating result jumped by almost a third to a record 1.7 billion euros. In life insurance, on the other hand, the group had to make cutbacks because things were going worse in the US business. Asset management suffered from the falling prices on the stock and bond markets, which caused assets under management to shrink by 43 billion euros within three months. Investors withdrew 20 billion euros from the funds. The operating result was ten percent below the previous year.

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