Allianz 2Q Net Profit Seen +13%; Update Eyed On Full-Year Goals
August 02 2011 - 5:09AM
Dow Jones News
Allianz SE (ALV.XE) is expected to report a 13% rise in net
profit for the second quarter, helped by moderate costs for
severe-weather damage, a lower tax rate and higher investment
income that more than offset the weaker contribution from the
life/health insurance and asset management businesses.
Allianz, Europe's largest primary insurer by premium income and
market capitalization, is scheduled to release second-quarter
earnings around 0500 GMT Friday.
Twelve analysts in a Dow Jones Newswires poll on average
forecast a rise in net profit to EUR1.23 billion from EUR1.09
billion in the same period a year ago.
Total revenue is expected to decline about 1.7% to around
EUR24.9 billion from EUR25.4 billion.
ING analysts said they expect Allianz's operating profits in
life insurance and asset management to suffer from depressed stock
markets, low interest rates and the debt crisis in peripheral euro
area countries. Fierce competition in France, Italy and Asia will
also be a negative for the life operations, and the euro's gain
against the U.S. dollar will weigh on the life business of insurers
reporting in euro, the analysts write.
Allianz executives are expected to give an update about the hit
they will take from the bailout package for Greece involving
private-sector investors that was agreed in July.
While UBS analysts calculate a EUR65 million pretax hit from
Greek sovereign debt in the second quarter, ING analysts "have not
incorporated a haircut scenario into second-quarter forecast
numbers, as we believe that this will potentially occur in 2H."
ING analysts said they consider Allianz's exposure to Greece,
Portugal and Ireland "manageable," while the insurer's exposure to
Italian sovereign debt of around EUR8.5 billion net "can have a
substantial impact."
Allianz's exposure to Greek sovereign debt was EUR1.3 billion at
the end of 2010, the latest figure available.
"If we simulate a 20%-40% haircut on Greek sovereign debt, this
only has a EUR90 million to EUR180 million net impact on Allianz's
P&L with a maximum one-percentage-point negative impact" on the
Solvency I ratio, which was 180% in the first quarter, the ING
analysts write.
Allianz shares have gained around 7% over the past year, a
substantial beat to the Stoxx 600 insurance index and raising
market value to around EUR42 billion.
-By Ulrike Dauer, Dow Jones Newswires; +49 69 29725 500;
ulrike.dauer@dowjones.com