Allianz Q3 2023 earnings: Operating profit declines by 14.6%, shareholders’ net income drops 29.3%

In the third quarter of 2023, German insuranc giant Allianz achieved a significant increase in its business volume, reporting a 4.5 percent rise to 36.5 billion euros. However, the company faced a 14.6 percent decrease in operating profit, amounting to 3.5 billion euros. This decline was largely attributed to the Property-Casualty business segment, which experienced a substantial impact from natural catastrophes. Shareholders’ core net income also saw a reduction by 29.3 percent, standing at 2.1 billion euros.

9M 2023 Performance: A Mixed Outlook

Across the first nine months of 2023, Allianz’s total business volume rose by 4.7 percent, reaching 122.1 billion euros. The company’s operating profit showed an upward trend with a 3.6 percent increase, totaling 11.0 billion euros. This growth was primarily driven by the Life/Health business segment. Furthermore, shareholders’ core net income experienced a notable rise of 25.5 percent, amounting to 6.8 billion euros. Additionally, Allianz reported an improved Solvency II capitalization ratio of 212 percent.

Challenges and Forward-Looking Statements

Despite the mixed results in different business segments, Allianz maintains a positive outlook for the future. The company has confirmed its 2023 operating profit target at approximately 14.2 billion euros, subject to a variance of 1 billion euros. However, factors like natural catastrophes and capital market fluctuations, as stated in their cautionary note, could significantly impact future earnings.

CEO’s Statement

Oliver Bäte, CEO of Allianz SE, expressed confidence in the company’s robust growth and operational efficiency. He highlighted the company’s resilience, global scale, and diversified business mix as key factors in achieving their targets.

Earnings Analysis

In Q3 2023, Allianz’s operating profit was notably impacted by a high level of claims from natural catastrophes. The shareholders’ core net income also decreased due to lower operating and non-operating results. Conversely, the first nine months of 2023 showed a more positive trend with increases in operating profit and core net income.

Accounting Standards and Share Buy-Back

All financial results have been reported under the new IFRS 9 and IFRS 17 accounting standards. Additionally, the company is nearing the completion of a share buy-back program worth up to 1.5 billion euros.

Conclusion

Allianz’s 2023 third-quarter and nine-month results depict a company adapting to market challenges while continuing to grow in key areas. With a solid strategy and financial resilience, Allianz remains a significant player in the global insurance market.