Investing.com -- Allianz (ETR:ALVG) reported its fourth-quarter results on Friday, posting solid earnings that came in ahead of market expectations.
Operating profit and net income were both 5% higher than anticipated, driven by better-than-expected cost discipline across all divisions, favourable life variances, and higher assets under management (AUM) in its asset management business.
However, the German insurer’s Solvency II ratio, a key measure of financial strength, stood at 209%, missing estimates by two percentage points.
Jefferies noted that the shortfall was likely due to non-parallel shifts in yield curves, which are difficult to predict using the company’s published sensitivities.
Alongside the results, Allianz announced a €2 billion share buyback, exceeding market expectations of €1.7 billion. While some analysts had anticipated this level, Jefferies had forecast a more conservative €1.5 billion.
The company’s property and casualty division posted 10.9% growth, beating forecasts by 3.6 percentage points.
However, the insurance service result lagged expectations by 15.1%, and the combined ratio—a key measure of underwriting profitability—was one percentage point worse than anticipated. Offsetting this, the division’s investment result was significantly stronger, beating estimates by 23.1%.
In life and health insurance, Allianz saw a 7.6% increase in the value of new business, though new business margins were slightly weaker than expected.
Its asset management arm also performed well, with third-party AUM coming in 2.5% ahead of forecasts and the cost-income ratio beating expectations. However, net flows were significantly weaker, missing estimates by 26.1%.
For the full year, Allianz reported modest earnings beats across key metrics, with earnings per share exceeding estimates by 0.5%, core EPS by 0.2%, and the dividend per share by 1.2%.