Allianz SE

Earnings Release • Feb 23, 2012

News Details

Corporate | 23 February 2012 06:59

Allianz SE: Allianz achieves 2011 operating profit target despite difficult environment

Allianz SE / Key word(s): Quarter Results/Final Results

23.02.2012 / 06:59

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*Revenues of 103.6 billion euros again surpass mark of 100 billion euros
*Stable operating profit of 7.9 billion euros, within target range
*Net income of 2.8 billion euros impacted by impairments from Greek
sovereign bonds and financial sector investments
*Capital position remains strong with solvency ratio of 179 percent
*Proposed dividend of 4.50 euros per share remains stable at high level

Allianz Group achieved its operating profit target for the 2011 business
year, despite volatile financial markets and an unusually high level of
natural catastrophes. Revenues reached 103.6 billion euros, within 2.7
percent of the record year 2010 which achieved 106.5 billion euros. The
2011 operating profit of 7.9 billion euros was within the target range of
8.0 billion euros, plus/minus 0.5 billion euros. Compared to the 2010
operating profit of 8.2 billion euros, this is a decrease of 4.6 percent.

The Property and Casualty insurance business increased its revenues while
also maintaining its profitability amid record claims from earthquakes,
floods and storms. Life and Health insurance earned an operating profit on
target despite adverse financial market conditions. Asset Management, in
turn, booked another successful year, continuing its strong performance.

Net income for 2011 was 2.8 billion euros, compared to 5.2 billion euros
the year before. The decline of 46.2 percent was mainly due to very
conservative non-operating impairments of 1.9 billion euros from Greek
sovereign debt and investments, particularly in financials.

Allianz Group further improved its strong capital position in 2011:
Shareholders' equity rose to 44.915 billion euros from 44.491 billion
euros. The solvency ratio increased to 179 percent at the end of 2011,
compared to 173 percent the year before.

The Board of Management will propose to the Supervisory Board of Allianz SE
a dividend of 4.50 euros per share, unchanged from the year before. This
proposal reflects the fundamental operating earnings power and capital
strength of Allianz Group.

'2011 was a tough year. But we maintained our stability throughout. That's
an extraordinary achievement,' said Michael Diekmann, CEO of Allianz SE.
'These results show the true strength of the Allianz business model.'

Property and Casualty insurance showing healthy growth

Gross premiums written in Property and Casualty insurance rose to an
all-time high of 44.8 billion euros. This is an increase of 2.0 percent
from 2010 and 2.3 percent in internal terms, adjusting for foreign exchange
and consolidation effects. Revenues in the UK, South America, Australia and
in the credit insurance business increased significantly. In key markets
such as Germany, France and Italy, revenues remained stable.

Operating profit remained at a high level, despite the costliest year in
the history of Allianz for natural catastrophes. These included not only
earthquakes in Japan and New Zealand but also floods in Australia and
Thailand as well as tornados in the US. Even with these impacts, operating
profit came in at 4.2 billion euros, only 2.5 percent lower compared to the
previous year's result of 4.3 billion euros. In 2011, Allianz Group
reserved or paid out 1.8 billion euros to its customers for natural
catastrophe damages, 0.5 billion euros more than in 2010.

The combined ratio for 2011 rose to 97.8 percent from 97.2 percent for
2010. Natural catastrophes contributed 4.4 percentage points to this,
compared to 3.2 percentage points the year before. The expense ratio for
the year fell to 27.9 percent in 2011 from 28.1 percent in 2010.

The operating investment result for 2011 improved 5.5 percent to 3.4
billion euros from 3.2 billion euros the previous year. The average asset
base for the segment expanded by 3.7 percent to 96.3 billion euros from
92.9 billion euros in 2010.

'This year we made significantly higher payments to our customers for
natural catastrophes than in 2010, which was already a difficult year,'
said Oliver Bäte, Chief Financial Officer of Allianz SE. 'And yet, our
Property and Casualty insurance segment remains robust. Selective
underwriting and cost discipline have protected the profitability of this
segment.'

Life and Health insurance remains on high level

In a challenging market environment, the Life and Health insurance business
achieved 52.9 billion euros in statutory premiums, the second-highest level
in the company's history. This was 7.4 percent lower than the exceptionally
high level for 2010 of 57.1 billion euros. The decline reflects lower sales
of market-sensitive investment-oriented products in order to maintain
profit margins. Premiums for traditional life insurance products remained
at a similar level as the year before.

The increase in the new business margin of 2.3 percent from 2.2 percent the
year before shows the consistent focus on profitable new business. The
value of new business of 940 million euros for 2011 decreased from 993
million euros due to lower volumes.

The average asset base grew 7.1 percent in 2011 to 357.8 billion euros from
334.2 billion euros. The lower investment result due to adverse market
conditions accounted for a majority of the decline in operating profit to
2.4 billion euros in 2011 compared to 2.9 billion euros the previous year.

'The 2011 results clearly demonstrate the underlying strength of our Life
and Health insurance business,' said Oliver Bäte. 'Despite the immense
market turmoil, operating profit is well within our target range. We
focused on business with good margins and protected profitability and
capital. Our capital strength and ability to deliver on the promises we
make to our customers differentiate us in times like these.'

Asset Management delivers excellent result

The year 2011 saw another outstanding performance in Asset Management.
Total assets under management grew 9.2 percent to 1,657 billion euros.
Third-party assets under management continued to grow to 1,281 billion
euros from 1,164 billion euros in 2010.

Net fee and commission income also continued its upward rise, ending at 5.5
billion euros for 2011, 11.0 percent higher than 4.9 billion euros in 2010.
This amounted to a 15.3 percent increase on an internal basis, adjusted for
currency exchange and consolidation effects.

Operating profit for the segment increased to 2.3 billion euros in 2011, a
rise of 9.5 percent from the previous year's level of 2.1 billion euros.
Internal growth adjusted for foreign exchange effects amounted to 14.0
percent. The cost income ratio of 59.0 percent for the year was virtually
unchanged from 58.7 percent in 2010 and well below the 65 percent target,
indicating continued operational efficiency despite significant investments
into growth.

'Asset Management remains a success story, again reaching a new record of
assets under management and net earnings of 1.3 billion euros. It is a key
component of the Allianz balanced portfolio which enabled us to effectively
weather such a challenging year as 2011,' said Oliver Bäte.

Outlook 2012

'We are expecting similar global economic conditions in 2012 with a
moderate improvement in the second half of the year. The first steps to
stabilize the euro zone have already been implemented successfully,' said
Michael Diekmann. 'In this environment, our ability to plan for risks and
generate earnings will once again serve our customers, shareholders and
employees well. We are confident about our strong business opportunities in
2012. Therefore, we are raising the operating profit outlook to 8.2 billion
euros, plus/minus 0.5 billion euros.'

Allianz Group - Preliminary key figures 4th quarter and fiscal year 2011

                                                   4Q 2011     4Q 2010

Total revenues [Euro bn] 25.0 26.0
Operating profit / loss [Euro mn] 2,000 2,154
Property-Casualty [Euro mn] 1,093 1,323
Life/Health [Euro mn] 519 554
Asset Management [Euro mn] 663 557
Corporate and Other[Euro mn] -236 -266
Consolidation [Euro mn] -39 -14

Income before income taxes [Euro mn] 1,102 1,545

Income taxes [Euro mn] -542 -364

Net income / loss [Euro mn] 560 1,181
Property-Casualty [Euro mn] 790 804
Life/Health [Euro mn] 267 268
Asset Management [Euro mn] 381 292
Corporate and Other[Euro mn] -854 -184
Consolidation [Euro mn] -24 1

Net income [Euro mn] 560 1,181
attributable to non-controlling interests [Euro mn] 68 46
attributable to shareholders [Euro mn] 492 1,135

Basic earnings per share [Euro] 1.09 2.52
Diluted earning per share [Euro] 1.06 2.49

Ratios
Property/Casualty: Combined ratio 97.6% 94.9%
Life/Health: Margin on reserves (2) [bps] 50 54
Asset Management: Cost-income ratio 58.6% 60.9%

                                                12M 2011     12M 2010

Total revenues [Euro bn] 103.6 106.5
Operating profit /loss [Euro mn] 7,866 8,243
Property-Casualty [Euro mn] 4,196 4,304
Life/Health [Euro mn] 2,420 2,868

Asset Management [Euro mn] 2,256 2,060
Corporate and Other [Euro mn] -897 -942
Consolidation [Euro mn] -109 -47

Income from income taxes [Euro mn] 4,846 7,173

Income taxes [Euro mn] -2,042 -1,964

Net income / loss [Euro mn] 2,804 5,209
Property/Casualty [Euro mn] 2,812 3,104
Life/Health [Euro mn] 1,198 1,849
Asset Management [Euro mn] 1,312 946
Corporate and Other [Euro mn] -2,501 -885

Consolidation [Euro mn] -17 195

Net income [Euro mn] 2,804 5,209
attributable to non-controlling interests 259 156
attributable to shareholders 2,545 5,053

Basic earnings per share [Euro] 5.63 11.20
Diluted earnings per share [Euro] 5.48 11.12
Dividend per share [Euro] 4.50(1) 4.50

Ratios
Property-Casualty: Combined ratio 97.8% 97.2%
Life/Health: Margin on reserves (2) 58 73
Asset Management: Cost-income Ratio 59.0% 58.7%

                                                 12/31/11      12/31/10

Shareholders' equity [Euro bn](3) 44.9 44.5
Conglomerate solvency ratio (4) 179% 173%
Third-party assets under management [Euro bn] 1,281 1,164

(1) Proposal
(2) IFRS operating profit (annualized) divided by average IFRS net reserves

(3) Excluding non-controlling interests
(4) Including off-balance sheet reserves (12/31/11: EUR 2.2bn, 12/31/10:
EUR 2.1bn). The solvency ratio excluding off-balance sheet reserves amounts
to 170% as of 12/31/11 and 164% as of 12/31/10

End of message.

These assessments are, as always, subject to the disclaimer provided below.

Cautionary Note Regarding Forward-Looking Statements
The statements contained herein may include statements of future
expectations and other forward-looking statements that are based on
management's current views and assumptions and involve known and unknown
risks and uncertainties that could cause actual results, performance or
events to differ materially from those expressed or implied in such
statements. In addition to statements which are forward-looking by reason
of context, the words 'may', 'will', 'should', 'expects', 'plans',
'intends', 'anticipates', 'believes', 'estimates', 'predicts', 'potential',
or 'continue' and similar expressions identify forward-looking statements.
Actual results, performance or events may differ materially from those in
such statements due to, without limitation, (i) general economic
conditions, including in particular economic conditions in the Allianz
Group's core business and core markets, (ii) performance of financial
markets, including emerging markets, and including market volatility,
liquidity and credit events (iii) the frequency and severity of insured
loss events, including from natural catastrophes and including the
development of loss expenses, (iv) mortality and morbidity levels and
trends, (v) persistency levels, (vi) the extent of credit defaults, (vii)
interest rate levels, (viii) currency exchange rates including the
Euro/U.S. Dollar exchange rate, (ix) changing levels of competition, (x)
changes in laws and regulations, including monetary convergence and the
European Monetary Union, (xi) changes in the policies of central banks
and/or foreign governments, (xii) the impact of acquisitions, including
related integration issues, (xiii) reorganization measures, and (xiv)
general competitive factors, in each case on a local, regional, national
and/or global basis. Many of these factors may be more likely to occur, or
more pronounced, as a result of terrorist activities and their
consequences. The company assumes no obligation to update any
forward-looking statement.

No duty to update
The company assumes no obligation to update any information contained
herein.

End of Corporate News

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Language: English
Company: Allianz SE
Königinstr. 28
80802 München
Germany
Phone: +49 (0)89 38 00 - 41 24
Fax: +49 (0)89 38 00 - 38 99
E-mail: investor.relations@allianz.com
Internet: www.allianz.com
ISIN: DE0008404005
WKN: 840400
Listed: Regulierter Markt in Berlin, Düsseldorf, Frankfurt (Prime
Standard), Hamburg, Hannover, München, Stuttgart;
Terminbörse EUREX

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157743 23.02.2012