By Louis Goss

German financial giant Allianz on Friday saw its shares increase 2% as it posted a 4.5% uptick in revenues alongside a 14.6% drop in third-quarter profits, after its insurance business was hit by a surge in claims from natural catastrophes.

The Munich-headquartered firm saw its third-quarter sales increase 4.5%, to EUR36.5 billion, as its revenues were bolstered by higher prices in its property and casualty insurance arm and an uptick in single premiums in its life insurance business.

Allianz’ earnings were, however, dragged down by a 25% drop in profits from its property and casualty insurance division, following a surge in claims related to a series of floods and storms in Europe this summer.

Shares in Allianz increased 2% on Friday, having risen 13% over the previous 12 months, as the German firm beat expectations, in posting third-quarter earnings worth EUR3.46 billion compared to the EUR3.21 billion forecast by 11 analysts polled by the company itself.

Allianz, which was first established as an insurance company in 1890 before it set up an asset management business Allianz Global Investors in 1998 and acquired PIMCO in 2000, saw inflows worth EUR10.5 billion in the third quarter.

The German firm’s inflows, which were mainly driven by its fixed-income business, marked the third quarter in a row of inflows for Allianz, which is now one of the biggest asset managers in the world with assets under management worth EUR2.16 trillion.

The recent inflows come after Allianz reported EUR81.4 billion worth of outflows in 2022, as clients pulled out their money as falling bond prices drove a worldwide sell off.

Allianz’ asset management arm, meanwhile, saw its revenues drop by 2.7%, to EUR2 billion, even as earnings increased 0.1% to EUR788 million, as higher fees and better margins offset lower sales.

Bank of America analysts, led by Andrew Sinclair, said: “Allianz shrugged off an incredibly heavy quarter for nat cats to still beat expectations in Q3. Allianz remains in excellent shape and we think steady results and improving flows at PIMCO through 2024 can support a re-rating of the shares.”

Allianz, however, held back from launching another share buyback program as it continued with the EUR1.5 billion buyback it announced in May.

-Louis Goss

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11-10-23 0846ET

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