| Allianz Group in the third quarter of 2008 |
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09/11/2008 23:44 (456 Day 19:21 minutes ago) | |||||
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The FINANCIAL -- Allianz Group maintained its financial strength and earning power in the third quarter of 2008, although turmoil in the equity markets and a difficult economic environment severely affected the business of the financial services industry as a whole.
Total revenues decreased slightly by 3.8 percent to 21.1 billion euros, compared to 21.9 billion euros in the third quarter of 2007. Operating profit decreased to 1.6 billion euros, compared to 2.6 billion euros in the same period of 2007. Quarterly net income from continued operations amounted to 545 million euros, compared to 2.0 billion euros in third quarter 2007.
During the first nine months of 2008, Allianz Group achieved an operating profit of 6.5 billion euros, compared to 7.7 billion euros in the same period of 2007. Net income from continued operations amounted to 4.2 billion euros, compared to 6.1 billion euros in the same period of last year.
Difficult capital market conditions during the third quarter had a negative effect on revenues and on the operating profit from the life insurance and asset management businesses. However, Allianz Group's largest segment, the Property & Casualty business, proved to be resilient.
The sale of Dresdner Bank will be reported under "discontinued operations" as of September 1, 2008. Discontinued operations accounted for a net loss of 2.6 billion euros in the third quarter, comprised of a net loss from the bank’s operations of 1.2 billion euros as well as transaction-based impairments according to IFRS 5 of 1.4 billion euros. Allianz's net loss for the third quarter stood at 2.0 billion euros, compared to a net income of 1.9 billion euros in the third quarter of 2007.
With a shareholder’s equity of 37.5 billion euros, Allianz Group’s capital base remains on a high level. This also applies to the solvency ratio of 157 percent2, net of a dividend accrual of 1.6 billion euros. "Despite volatility in the financial markets we have maintained our strong capital and solvency positions. Allianz will continue to act prudently and invest conservatively in the interest of our customers, employees, and shareholders. The sale of Dresdner Bank is on track", said Helmut Perlet, CFO of Allianz SE. Helmut Perlet: "We maintained our strong capital and solvency positions"Property and Casualty insurance business
The operating profit in the third quarter decreased to 1.2 billion euros from 1.5 billion euros in the third quarter of 2007. The decline is largely due to two factors. The credit insurance business recorded payment delays as suppliers faced liquidity bottlenecks. In addition, the US crop business had to absorb losses following the slump in commodity prices at the end of September.
The expense ratio decreased from 27.6 percent in the third quarter of 2007 to 26.2 percent, while the combined ratio reached 96.2 percent, compared to 94.1 percent for the same period in 2007.
"Our Property & Casualty business remains very resilient, even in the present situation. We are in good shape because we continue to put profitability before volume growth", said Helmut Perlet.
The financial market downturn impacted operating investment result through impairments level of 1.6 billion euros and around 500 million euros lower realized gains compared to the third quarter of 2007. Operating profit in the third quarter 2008 declined to 218 million euros from 873 million euros in the same quarter of last year.
Dresdner Bank, now accounted for as discontinued business, had operating revenues of 747 million euros, down from 1.2 billion euros a year ago. Dresdner Bank continued to suffer from weak and volatile markets in the third quarter. The operating loss in the third quarter of 2008 amounted to 835 million euros, compared to an operating profit of 87 million euros in the same period of 2007.
The Tier I ratio of Dresdner Bank stood at 8.1 percent as of end of September.
Third-party assets under management increased to 754 billion euros by the end of the quarter. At the end of the second quarter they stood at 740 billion euros. Despite increasingly challenging conditions, net inflows amounted to 5.6 billion euros in the third quarter. A negative capital market effect of 44 billion euros was more than offset by a positive foreign exchange effect of 53 billion euros.
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