Allianz(US:ALIZY)2022-11-11 08:15Financial Data and Key Metrics Changes - The company reported an operating profit of €10.2 billion for the first nine months of 2022, a 3% increase compared to the previous year [5] - For Q3 2022, the operating profit was €3.5 billion, which is 7% higher than the same period last year [10] - The net income for Q3 was €2.5 billion, reflecting strong operating performance combined with realized gains [12] - The solvency ratio stood at a comfortable 199% before dividend deductions, and 197% after [13] Business Line Data and Key Metrics Changes - The Property Casualty segment achieved an operating profit of €1.7 billion in Q3, a 32% increase year-over-year, with a stable combined ratio [11] - The Life segment saw an improvement in the new business margin, which reached 4%, although production was down 30% due to a large corporate contract last year [24] - The Asset Management segment reported an operating profit of €800 million for Q3, down from the previous year, but consistent with the outlook [34] Market Data and Key Metrics Changes - The Property Casualty segment experienced 9% internal growth, primarily driven by price increases in response to inflation [17] - The company noted that almost all markets showed good growth rates, with specific challenges in Brazil and the UK [21] Company Strategy and Development Direction - The company revised its 2022 expectations to the upper half of its target range, indicating strong underlying performance [9] - There is a focus on capital deployment, including a €1 billion buyback and small acquisitions in Asia and Greece [37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the Life segment despite market volatility, expecting positive impacts from assumption reviews [46] - The company is actively managing pricing in response to inflation, with expectations for further rate increases in 2023 [54] Other Important Information - The company is experiencing outflows in the Asset Management segment, with €20 billion in outflows for the quarter, but anticipates recovery as the interest rate environment stabilizes [31][32] - A significant amount of realized gains was noted from the Voya transaction, contributing positively to net income [36] Q&A Session All Questions and Answers Question: Buyback discussions with BaFin and future plans - Management confirmed constructive discussions with BaFin regarding the buyback plan, with no changes expected [42] Question: Property Casualty profits and combined ratio target for 2024 - Management indicated that the combined ratio target for 2024 will depend on market reactions, but expects a strong operating profit regardless [43][44] Question: U.S. life business outlook amidst market volatility - Management reassured that the volatility in the U.S. life business is normal and does not indicate underlying problems, with positive news expected from assumption reviews [45] Question: De-risking strategy and pricing actions in non-life - Management explained that de-risking is motivated by both improved fixed income returns and a desire to reduce Solvency II sensitivity, with ongoing pricing actions to address inflation [50][55] Question: Update on asset management flows and performance fees - Management noted that outflows are expected to stabilize once market uncertainties are resolved, and anticipates an increase in performance fees in Q4 [70][101]