Digital Assets in Capital Markets

Advanced course on digital assets - assets created using a blockchain/DLT network - designed for finance professionals.

IBF-STS
8 CACS CPD Hours

15 November 2022 (Tuesday) | 9am-5pm

German insurer Allianz reported a 23.1% YoY fall in its consolidated net income to €1.8bn ($1.8bn) for Q2. The lower profit was attributed to a 6x jump in non-operating expenses to €1.2bn ($1.2bn), which included restructuring & integration expenses, impairments, and a change to hyperinflation accounting in Turkey. The company spent ~€140mn ($143.1mn) on restructuring to close its US funds unit related to a multi-billion fraud, where $6bn in settlements were already agreed upon in May with US regulators. Total revenue came in 8.2% higher YoY at €37.1bn ($38bn). Revenue growth was driven by the Property-Casualty segment, up 16.2% YoY generating €16.2bn ($16.6bn) on the back of broad volume growth and positive price effects. Life & Health revenues rose 3.4% YoY to €19.1bn ($19.5bn), benefiting from positive foreign currency translation effects and the acquisition of Aviva’s operations in Poland. The Asset Management business was stable with 0.8% revenue growth at €2bn ($2.1bn). Allianz’s fixed income investment management-focused arm PIMCO witnessed €29bn ($29.5bn) of outflows on rising risk aversion and a broad sell-off in bonds. For Property-Casualty, its combined ratio stood at 93.6%, 30bp lower YoY. The value of new business for Life & Health increased 6.2% to €673mn ($687mn) which led to an increase in new business margins by 90bp to 4.1%. For Asset Management, the cost-to-income ratio came in 300bp higher YoY to 61.8%. As of July, the company has completed a share buyback program of €1bn ($1bn). For the full year 2022, the company has guided for an operating profit target of €12.4-14.4bn ($12.7-14.7bn). The group’s Solvency II ratio stood at 200%, up 100bp QoQ.

Allianz’s 3.5% perp is trading at 89.05, up 0.11 points at a yield of 7.39%.

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