(new: statements from conference call on catastrophe losses in Germany and other countries, cessions to reinsurers, clarification of profit expectations for the full year, updated share price reaction)

MUNICH (dpa-AFX) - The severe storms in Germany, Italy and Austria have cost Allianz dearly this summer. In total, the consequences of natural disasters cost the insurer almost 1.3 billion euros in the third quarter, almost four times as much as a year earlier, as it announced in Munich on Friday. As a result, the operating profit fell by 15 percent to 3.5 billion euros. However, CFO Giulio Terzariol expressed confidence that Allianz will achieve a record operating profit this year.

After the Allianz management had initially targeted 13.2 to 15.2 billion euros for 2023, Terzariol now expects an operating profit clearly in the upper half of this range. This would mean that Allianz would exceed its record of just under 14.2 billion euros from 2022. After the first nine months of the year, its operating profit is just under 11 billion euros.

The news was received positively on the stock market. Allianz shares rose by around three and a half percent at times in the morning. In the afternoon, it was still up just under two percent at 226.45 euros, making it one of the strongest stocks on the DAX. At the same time, it was trading around 13 percent higher than at the turn of the year, having reached its highest price for more than two decades at 234.55 euros in September. Analysts had expected an even greater slump in earnings for the third quarter.

In Germany, the storms "Denis", "Erwin" and "Bernd" cost Allianz dearly with hail and heavy rain in the summer, as CFO Terzariol explained in a conference call with journalists. A spokesman put the cost in Germany at almost 600 million euros. In addition, storms in Italy cost around 400 million euros, as did the devastating floods in Austria, Slovenia and Croatia.

The operating profit in the property and casualty business slumped by a quarter to a good 1.4 billion euros. The losses from natural disasters of just under 1.3 billion euros consumed 7.3 percent of income in this segment - the highest level in a decade. Even after the severe flood disaster in Germany in 2021, this ratio was only 4.9%. At 659 million euros, Allianz's total natural catastrophe losses in the third quarter of that year were only around half as high as this time.

According to Terzariol, Allianz has kept a larger proportion of the risks on its own books since 2022 instead of ceding them to reinsurers such as Munich Re. This is because reinsurers have raised the thresholds above which they will cover major claims - and have also increased prices.

Accordingly, Allianz has also raised premiums for its customers in the property and casualty business in order to absorb higher costs, also as a result of inflation. Overall, the division increased its business volume in the third quarter by 10.8 percent on a currency-adjusted and comparable basis. At 5.3 percent, however, price increases accounted for almost two percentage points less than in the second quarter.

Income was sufficient to cover expenses for claims, administration and sales. However, the combined ratio deteriorated year-on-year from 92.5 percent to 96.2 percent.

Life and health insurance fared better. Their operating profit fell by around five percent to 1.3 billion euros. However, this was mainly due to changes in exchange rates and transitional effects as a result of the new accounting standards. Since 2023, large insurance companies have had to calculate their business figures in accordance with the new IFRS 17 and IFRS 9 standards. The figures from the previous year have been adjusted.

Meanwhile, the funds of Group subsidiary Pimco and Allianz Global Investors (AGI) collected additional money from customers. In the third quarter, they recorded net inflows of 10.5 billion euros. The entire fund business kept its operating profit practically stable at 788 million euros. Although operating income fell by just under three percent, it received higher performance-related commissions.

The bottom line for Allianz shareholders in the third quarter was a surplus of a good two billion euros, almost 30 percent less than in the same period last year. At that time, the Group had made a special profit because it had transferred assets from AGI in the USA to a business partner. The reason for this was an investment scandal worth billions: AGI therefore had to divest the majority of its US business at the behest of the authorities.

CFO Terzariol will no longer be announcing Allianz's annual results in February: He is moving to Italian competitor Generali in January. There he will be in charge of the entire insurance business. The new Chief Financial Officer at the side of Allianz CEO Oliver Bäte will be the former Chief Actuary Claire-Marie Coste-Lepoutre./stw/men/mis