Despite the difficult overall environment, total revenues of 3.7 billion euros were nearly at the previous year’s level of 3.8 billion euros. Operating profit of 296 million euros was ahead of the 295 million euros achieved in the previous year. Strong performances in Life and Health insurance in particular compensated for a challenging year in Property and Casualty insurance due to depressed markets throughout the region.
“The results for 2012 are in line with our expectations, especially considering the slow growth and the economic dependency of CEE on western Europe. In fact, we outperformed the market,” said Manuel Bauer, Member of the Board of Management of Allianz SE responsible for growth markets. “There are early signs that the world economy is emerging from its recent sluggish period. In the course of this year, some experts expect Europe to see a modest pickup in economic momentum, which would also help to bolster growth in CEE. Our well-positioned companies in the region would be amongst the first to benefit from this trend.”
Property and Casualty insurance robust and well positioned
Gross premiums written in the Property and Casualty business in CEE for 2012 amounted to 2,393 million euros compared to 2,563 million euros in 2011, which corresponds to a decrease of 6.6 percent. On an internal basis this reflects a decrease of 4.9 percent. The development in the Property and Casualty business was driven by selective underwriting to improve the profitability of voluntary medical insurance in Russia, persistently tough economic conditions across the CEE region, the highly competitive environment in motor business especially in Hungary and Poland, and lower volumes of industrial property business in Russia.
At 175 million euros, the operating profit of the Property and Casualty business in CEE remained close to the previous year’s level of 178 million euros. The combined ratio for 2012 was solid at 96.9 percent, after 96.6 percent in the previous year.
“The economy in CEE is still influencing the revenue development in our Property and Casualty business. Nevertheless, we managed to retain our market share and keep our position in this important segment. This shows we are a strong player in this region. In addition to this, Allianz’ global lines benefited from our good position in CEE with offers of additional services like assistance and credit insurance, as well as expertise in large corporate and specialty risks. It’s a unique value proposition no one else in the region can offer,” commented Bruce Bowers, regional CEO of Allianz in Central and Eastern Europe.
By Spring 2012, Allianz in Russia finished the integration of its three Property and Casualty companies which had started in early summer 2011. Since April 2012, the company has been active under the single Allianz brand in Russia. Customers will now benefit from high-quality service and products being offered under one roof.
Bruce Bowers: “We have managed to integrate these companies in a very short period of time, bringing together the best of all three. This is something I am proud of. We now have a solid platform to build on in this fast-growing insurance market, where we anticipate double-digit growth. We are ready to fully participate in that growth.”
Life and Health insurance grows strongly
Total premiums in the Life and Health business increased by 5.7 percent to 1,176 million euros in 2012 from 1,113 million euros in 2011. Internal growth amounted to 7.9 percent.
This positive development was driven primarily by Poland, where significantly higher volumes of life deposit business written early in the year more than offset declining unit-linked sales. Premiums in Allianz Russia also increased significantly through bancassurance sales. In the Czech Republic Allianz achieved higher single premium revenues from investment-oriented products and an ongoing positive trend in the sale of traditional products.
Operating profit amounted to 80 million euros in 2012 compared to 77 million euros in the previous year. This corresponds to a 3.9 percent increase, that was mainly due to increased sales of more profitable traditional life products, especially in Slovakia and the Czech Republic, and positive effects from a change of accounting treatment for commissions in the Czech Republic triggered by strong revenue growth.
“There is absolutely no question that life products are an essential means of providing for financial security in the societies of Central and Eastern Europe. Average ages are increasing at the same rate as in western Europe, even faster in some countries,“ commented Bruce Bowers. “Allianz is well-recognized for its world-leading expertise in this field. This is why we are a market leader here and continue to have a lot to offer our customers in the region.”
Pension Fund and Asset Management customer base increases by 10%
In the pension fund business Allianz in CEE continued to improve its leading position in the region.The client base increased to 4.6 million in 2012 compared to 4.2 million in 2011. The Allianz pension fund in the Czech Republic recorded the largest number of new clients. This success was based on a strong track record and the new pension reform.
At the end of 2012, assets under management reached 8.7 billion euros compared to6.6 billion euros in the previous year. Especially pension funds in Poland, the Czech Republic, Slovakia and Croatia contributed to this development.
Pension fund and asset management business in total contributed an operating profit of 33 million euros in 2012 compared to 32 million euros in the previous year. The cost-income ratio improved to 53.0 percent, compared to 54.3 percent in the prior year.
“These products are an essential complement to traditional life insurance, which is why I am so glad we have such a variety for our customers to choose from to meet their saving and old-age provision needs,” commented Manuel Bauer. “This complete range of high-quality products for everyone from individuals to large corporations makes us unique in the region, underpinning our leading position.”