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FRANKFURT (Dow Jones) – Higher losses as a result of the corona pandemic brought Allianz SE a noticeable drop in profits in the second quarter of 2020 as well. The alliance still does not dare to update the outlook that was withdrawn in April due to the ongoing uncertainty.
In the second quarter, operating profit fell by 18.8 percent to 2.6 billion euros. Analysts had expected 2.43 billion in a consensus drawn up by the company itself. Net profit plummeted 28.6 percent to 1.5 billion euros. Earnings per share were EUR 3.71.
“The pandemic remains a challenge for all industries. Nevertheless, Allianz achieved robust results in the first six months of the year and showed remarkable resilience,” said CEO Oliver Bäte. “This makes us confident that we will see stable business results in the second half of 2020 as well.”
In the property-casualty business, operating profit fell by 17.4 percent to EUR 1.1 billion. The combined ratio worsened by 1.2 percentage points to 95.5 percent. The indicator sets expenses for insurance operations and services in relation to premium income. The lower the quota, the more profitably an insurance company works.
“Covid-19’s impact on property and casualty insurance was more pronounced in the second quarter of 2020, but our business has proven resilient in terms of revenue growth,” said CFO Giulio Terzariol.
In life and health insurance, the operating result fell to 1.0 from 1.2 million euros, which is mainly due to a favorable one-off effect in the USA in the second quarter of 2019.
Asset management posted a 5.7 percent drop in earnings to EUR 640 million due to lower performance-based commissions and higher operating expenses. After outflows of 46 billion euros, it again generated net inflows of 25.8 billion euros in the first quarter. Assets under management for third parties rose to 1.658 (end 1Q: 1.56) trillion euros at the end of the quarter.
Despite a decline in the capital ratio determined according to the Solvency 2 rules to 187 percent at the end of March from 190 percent at the end of the first quarter, Allianz remains solidly capitalized. Allianz paid the dividend for 2019, but the share buyback program was suspended.
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(END) Dow Jones Newswires
August 05, 2020 01:43 ET (05:43 GMT)