(AOF) – Allianz reported mixed results in the second quarter. The German insurer recorded a 23.3% drop in net profit to 1.7 billion euros. The market advanced 1,846 billion euros. Operating profit increased 5.3% to € 3.495 billion, but analysts were less optimistic and aimed for € 3.31 billion.
Sales increased by 8.2% in the quarter, to 37.1 billion euros, and by 3.6% on a like-for-like basis.
The combined ratio of the non-life division (non-life and home insurance) was 93.6%, down 0.3 points.
The Solvency II capitalization ratio reached 200% at the end of the second quarter, up 1 point over the quarter.
In asset management, at the end of June, Allianz managed 1,769 billion euros on behalf of third parties, down by 109 billion euros in the quarter. This business recorded an outflow of € 33.8 billion, but also a negative impact on the market of € 159.2 billion. The currency impact was positive for 87.7 billion euros.
American manager PIMCO, owned by Allianz and specializing in bonds, had an outflow of € 28.7 billion and Allianz GI recorded an outflow of € 5.1 billion.
Allianz confirmed its operating profit target of $ 13.4 billion in 2022, roughly $ 1 billion.
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Strong development momentum for French life insurance
The growth of life insurance continues over the months. In the first four months of the year, contributions reached € 53.7 billion, a level not seen for more than ten years. Net inflows, amounting to € 10.5 billion, also returned to their highest level since 2011 in a similar period. In the end, at the end of April 2022, life insurance contracts in place reached € 1.847 billion, up 1.1% over one year. These good performances are partly linked to the growing success of the PER (Pension Savings Plan). Since the beginning of 2022, PERs marketed by an insurer have recorded 592,000 additional policyholders and € 9.3 billion in payments. At the end of April 2022, 3.2 million policyholders held a PER, which represented a residual of € 39 billion. Without taking into account transfers, 87% of new holders of a PER (at the end of December 2021) had signed it with an insurer.
The negative effects of rising interest rates
Rising interest rates usually cause bank income to increase through loans. In Europe, according to a survey conducted by S&P of 85 banking institutions, the sector expects on average an 18% increase in its interest margin. However, this new inflationary environment also has undesirable effects, notably an increase in refinancing costs. It is also accompanied by the fear of a new recession, which would then affect all the bank’s activities, from loans to asset management, whose income is correlated to market valuations. Reassuring element: euro area banks are strong enough to cope with a deteriorating environment.