Morningstar | Allianz Reports Standard 2Q; Shares Overvalued
Allianz reported second-quarter operating earnings of EUR 3.0 billion. While this is slightly above our expectations, we are maintaining our EUR 175 per share fair value estimate.Growth within property and casualty premiums has largely been driven by volume, with only 2.2% of the 7.3% growth rate coming from price. Corporate solutions was a significant contributor. The business reported a 94% combined ratio, demonstrating it is well on track to meet the 94% target.
In terms of life and health, new business margin increased marginally by 10 basis points to 3.5%, owing to business mix and a slightly higher interest rate. Allianz has pushed increased sales of capital-light products in Germany and unit-linked insurance products without guarantees in Taiwan. The value of new business rose to EUR 491 million, with present value of new premiums at EUR 14 billion. However, operating profit in this segment fell 4.6% to EUR 1075 million because of lower investment margins in the Spanish and German life businesses.
In asset management, third-party assets increased by 2.5%, or EUR 35 billion, to EUR 1.46 trillion. Notably, the cost/income ratio improved by nearly 1% to 61.6%.
Overall, this is a fairly routine set of results from Allianz. The tanker keeps chugging along.
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