Europe's largest insurer Allianz reported a decline in operating profit for the third quarter due to high damages from natural disasters. However, the profit fall was smaller than analysts feared, thanks to a higher business volume. Allianz confirmed its forecast for the full year. In the period from July to September, the operating result fell by nearly 15 percent to 3.47 billion euros, while net profit fell by almost 30 percent to just over 2 billion euros. In contrast, business volume increased by 4.5 percent to 36.5 billion euros.
For the current year, Allianz still expects an operating profit at prior-year level of 14.2 billion euros, with deviations of 1 billion euros upwards or downwards possible. The operating profit for the first nine months was 11 billion euros. The analysts' consensus for 2023 stands at 14.7 billion euros. Investors reacted positively to the quarterly figures, which was reflected in a price increase of 1.78 percent. The shares of Munich Reinsurance Company also increased by 0.65 percent.
The severe storms in the third quarter led to a drop in profits for Allianz, but not as much as analysts feared. Kamran Hossain of JPMorgan described the results as strong and above expectations. Philip Kett from Jefferies emphasized that the result is impressive given the above-average natural disaster damage. The solvency ratio also positively surprised. However, Allianz did not announce any further share buybacks, which was not necessarily expected.
Analyst Thorsten Wenzel from DZ Bank believes it is possible that a new share buyback program will be announced in February with the annual figures. The consequences of natural disasters cost Allianz almost 1.3 billion Euros in the third quarter, which was almost four times as much as the previous year. In addition to natural disasters in Europe, the sale of business units in Lebanon also led to a decline in results. Nevertheless, the targeted operating result for the current year remains achievable.
Allianz CEO Oliver Bäte sees the company still on track to achieve an operating profit between 13.2 and 15.2 billion euros this year. After the first nine months, Allianz is at just under 11 billion euros. At the end of the week, the Allianz share price reached its highest level since the end of September, recording an annual gain of 13 percent.
This puts it among the 15 best values in the DAX and, despite its defensive characteristics, it outperforms more than half of the index members. With a market capitalization of about 90 billion euros, Allianz shares are among the five largest DAX values.
