Corona Pandemic Initially Costs Allianz 700 Million Euros
By Marko Vidrih on The Capital
Europe’s largest insurer saw a slump in profits in the first quarter.
The global corona pandemic has cost Europe’s largest insurer Allianz around 700 million euros. Property and casualty insurance accounted for around 400 million euros, life and health business accounted for 300 million euros, according to a presentation on the figures for the first quarter published on Tuesday.
The insurer has to pay especially for the cancellation of major events and business interruptions as a result of the pandemic. With this, the alliance makes the virus crisis virtually alone responsible for the 22 percent drop in operating profit to around 2.3 billion euros in the first quarter. Net profit shrank by 29 percent to 1.4 billion euros.
Allianz had already corrected its operating profit forecast for 2020–11.5 to 12.5 (2019: 11.9) billion euros — at the end of April.
The loss of events and policies against a standstill of companies burdened Allianz with around 200 million euros each. This affects the industrial insurer AGCS in particular; that slipped deep into the loss zone.
With a total of 100 million defaults at credit insurer Euler Hermes and travel insurance. In contrast, minor damage to car insurance as a result of the initial restrictions had a positive impact of 100 million euros. The combined ratio deteriorated to 97.8 from 93.7 percent in the first quarter. Without natural disasters and corona damage, it would have improved to 94 percent, explained CFO Giulio Terzariol.
The pandemic is also leaving its mark on capital investments. Allianz’s solvency ratio fell to 190 (212) percent from late December to late March. The cushion of unrealized profits on the balance sheets melted by six billion to 11.7 billion euros within three months. In order not to be drawn into the downturn on the capital markets, Allianz sold listed shares worth five billion euros, the presentation said.
Author: Marko Vidrih
Featured image credit: Unsplash
