Allianz says Australian property and casualty operating profit slumped last year following natural catastrophe impacts. 

The Munich-based insurer last week released its annual results, showing global property and casualty business volume increased 8.4% to €76.5 billion ($127.3 billion) while operating profit rose 1.2% to €6.9 billion ($11.5 billion). 

But a breakdown of selected operating entities shows Australian profit was €213 million ($354.5 million), down 48.8% on a year earlier. 

“Clearly, Australia is not really where we want it to be,” CFO Claire-Marie Coste-Lepoutre told a media briefing. "In addition to the nat cat load, they also experienced some negative run-off coming from the late nat cat that happened in 2022, and also I have seen a very high level of inflation.”

Allianz Australia has a “really good team”, improvements are being seen in line with expectations, and there are “good signs”, she says. 

Australia achieved total business volume growth and rate change on renewals of 9.3%, which compared with 9.9% a year earlier. 

Allianz says combined operating ratios in the selected operating entities were all below 100%, including 97.5% for Australia. 

Impacts from natural catastrophes were also felt in Germany and Switzerland, while Britain had a strongly improved operating profit. 

In property and casualty global lines, Allianz Partners’ operating profit rose 5.8% to €301 million ($501 million) and Allianz Global Corporate & Specialty, excluding fronting and captives, grew 20.7% to €953 million ($1.6 billion). 

Allianz SE groupwide operating profit, including property and casualty, life and health, and asset management, rose 6.7% to a record €14.7 billion ($24.5 billion). 

CEO Oliver Bate says the earnings were delivered amid high inflation, frequent natural catastrophes and a global environment that includes geopolitical tensions and the generative artificial intelligence revolution. “Against this environment, Allianz had a very successful year in 2023,” he said. 

An Allianz Australia spokesman says operating profit fell last year compared with 2022 due to inflationary pressures on the home and motor portfolios driving up average claims costs, plus the adverse development of 2022 catastrophe claims, specifically the floods in December that year. 

“In line with the market, we have also looked to increase premium rates to mitigate the pressure on profitability,” he told insuranceNEWS.com.au. 

The operating profit numbers were presented in euros, which also negatively affects the year-on-year comparison due to exchange rate movements, he says.