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(Reuters) — German insurer Allianz on Friday declined to provide a forecast for 2020 given uncertainty around the COVID-19 pandemic, despite delivering an unexpected 6% rise in third-quarter net profit.
Allianz, like other insurers, has warned about the impact of clients making claims for business interruption and canceled events from lockdowns, while demand for car and travel insurance has fallen.
Chief Financial Officer Giulio Terzariol said on Friday that volatility in financial markets could also increase due to the U.S. election outcome. He refrained from offering guidance about the company's full-year prospects.
“These are not normal times,” he told journalists.
Net profit attributable to shareholders of €2.063 billion ($2.44 billion) in the three months through September compared with €1.947 billion a year earlier. It was higher than a €1.626 billion consensus forecast.
The bottom line was helped, though, by an increase in profit unrelated to Allianz's core activities. The company saw higher realized gains over the summer from sales in its portfolio and lower impairments, after a write-down for Argentinian bonds a year ago.
The company also definitively canceled a share buyback that had been on hold “in light of the ongoing economic uncertainties.”
Allianz’s shares were up 1% in mid-morning trading, with analysts at Barclays calling the results “overall a decent beat.”
Earlier this year, the insurer abandoned its 2020 profit target of between €11.5 billion and €12.5 billion due to economic uncertainty resulting from the pandemic, and said it expected to post the first annual decline in profit in nearly a decade.
"We remain confident to not just weather the COVID-19 crisis well, but to build an even stronger Allianz," CEO Oliver Baete said.
Allianz's combined ratio, a measure of profitability for its property/casualty division, one of its highest revenue producers, worsened slightly to 94.5% in the third quarter, from 94.3% a year earlier. Readings below 100% indicate profitability.
More insurance and risk management news on the coronavirus crisis here.