Inside Allianz SE: A brief story & stock performance

Allianz Group, one of the top asset managers and insurers in the world, employs more than 157,000 people globally and serves 125 million* individual and business clients across nearly 70 countries.

The Allianz Group’s total business volume in the 2023 fiscal year was close to 162 billion euros.

At the end of the year, Allianz managed 1,712 billion euros in third-party assets, making it one of the biggest asset managers globally.

In 2023, the stock markets in Europe experienced a notable surge. There was a 19.2% increase in the EURO STOXX 50 from the start of the year. Growing hope that the cycle of interest rate hikes by central banks was coming to an end was a major factor driving the upward movement.

The STOXX Europe 600 Insurance (+8.8%) shows that while price gains were also seen in insurance stocks, they were less significant than in more general markets. The performance of the Allianz share was noticeably better, rising by 20.4% to close at 241.95 euros. This leads to a 26.8% increase when the 11.40-euro dividend is taken into account. In the long run, Allianz shares were also a desirable investment. Over a period of ten years, the average yearly growth in value was 11.5%.

Allianz stock drops due to poor p/c insurance results

Shares of Allianz SE dropped after the German insurance giant revealed lower-than-expected results for its property-casualty division.

According to Allianz, the segment’s operating profit for the fourth quarter was €1.6 billion ($1.7 billion). That was less than the €1.8 billion predicted by analysts.

In a previous statement in February, Allianz stated that it intended to increase the dividend by a fifth to €13.80 per share and that it would begin a new share buyback of up to €1 billion, which is less than some had predicted.

Allianz was “very much a mixed bag overall,” according to a note written by Deutsche Bank analyst Hadley Cohen. In Frankfurt, Allianz shares were down 2.4% at 9:57 a.m.

Oliver Baete, the CEO of Munich-based Allianz, has prioritized paying back investors’ money since taking over the company nearly ten years ago. Based on calculations by Bloomberg, he has already distributed roughly €40 billion in dividends and buybacks to shareholders since the beginning of 2017.

Thanks to robust performance in the life-health insurance segment, Allianz’s operating profit for the fourth quarter increased by 17% to €3.77 billion. Additionally, the company stated that its operating profit goal for this year is between €13.8 billion and €15.8 billion.

The asset management division, which is made up of Allianz Global Investors and Pacific Investment Management Co., reported a 13% increase in profit in the fourth quarter.

Allianz revised its dividend policy, increasing the amount regularly distributed to shareholders from 50% of net income attributable to shareholders to 60%. It added that, having previously targeted an increase of at least 5%, it now intends to pay a dividend per share of at least the exact same amount as the prior year.

Analysts have speculated that Allianz may switch from sporadically announcing buybacks all through the year to a yearly program, which would remove some uncertainty surrounding quarterly results. Later this year, on its capital markets day, the company may provide investors with an update.

Allianz: French bondholders fear of Euro crisis replay

According to managing director Gregor Hirt, whose division manages €156 billion ($168 billion) in assets, foreign investors own a far larger portion of French government debt than they do elsewhere. Some are concerned that the current political unrest could lead to another European debt crisis comparable to the one that occurred more than ten years ago.

Markets have been frightened and French debt has been sold off due to fears that a victory by either the right or left would worsen the country’s already excessively large public debt. The demand for an additional yield by investors to hold the country’s 10-year bonds rather than Germany’s reached its highest point on Friday since the height of the previous debt crisis in the eurozone.

Despite the recent improvement in euro-area economic data, Hirt continues to maintain an overweight position in US dollars relative to the euro, with the first round of voting beginning this weekend. He sees gold as a hedge against unstable geopolitical conditions.

Hirt claims that, in contrast to the French election, the UK vote on July 4 will be a “non-event” because it is generally predicted that the Labour party will win. In his opinion, Labour could establish stronger ties with the EU if it wins, and he supports UK stocks.

Allianz is still long US Treasury bonds maturing in 10 years. According to him, there is not enough additional return from the French selloff to warrant purchasing French debt due to the widening of euro-area spreads.

Earnings Release 1Q 2024: Operating profit at Allianz rises by 6.8% to 4.0 billion euros

The total value of business is up 5.3% to 48.4 billion euros.

The Property-Casualty business segment drives the 6.8% increase in operating profit to 4.0 billion euros, with positive results also coming from the Asset Management and Life/Health business segments.

Core net income for shareholders increases by 15.7% to 2.5 billion euros.

203 percent strong capitalisation ratio for Solvency II

Operating profit goal for 2024 is kept at 14.8 billion euros, give or take 1 billion euros.

Share buyback began at 1 billion euros and was completed at 0.5 billion euros.

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This information is not considered as investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced, or hyperlinked, in this communication.

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