(new: statements from conference call with CFO Terzariol on the sale of the Lebanon business, full-year 2022 figures after new accounting, share buyback, updated share price reaction)

MUNICH (dpa-AFX) - High prices in property and casualty business have given insurer Allianz a surprisingly strong jump in profits to start the year. In the first quarter, the Munich-based DAX-listed group posted an operating profit of a good 3.7 billion euros, almost a quarter more than a year earlier. According to statements made on Friday, the board of management headed by Allianz CEO Oliver Bäte sees the group on course to achieve an operating profit of between 13.2 and 15.2 billion euros this year, as planned. The bottom line even quadrupled at the start of the year. However, this was due to a billion euro charge a year ago. This time, too, there was a downer.

On the stock exchange, the news was initially acknowledged in the morning with price losses of just under two percent, but then things started to look up. At lunchtime, the Allianz share was up 0.2 percent at 212 euros, but was still one of the weaker stocks in the Dax. Since the turn of the year, the stock has gained around five percent and thus developed significantly weaker than the leading German index. On Wednesday evening, Allianz had already announced a share buyback program worth 1.5 billion euros, but this did not cause any major price reactions on the stock market.

Industry expert Kamran Hossain of U.S. bank JPMorgan called the quarterly figures solid and praised above all the Group's capital strength. However, Jefferies analyst Philip Kett found the combined ratio in the property and casualty business too high. If the insurer had not benefited from small major losses, the ratio would have missed expectations in his view.

The bottom line for Allianz shareholders in the first quarter was a profit of 2 billion euros, a good four times as much as in the same period last year. At the time, an investment scandal involving the fund subsidiary Allianz Global Investors (AGI) in the U.S. had burdened Allianz with penalties and damages of 1.9 billion euros.

For the first time, the figures were calculated in accordance with the new accounting standards IFRS 17 and IFRS 9, which will apply to large insurers from the beginning of 2023. The prior-year figures have been adjusted accordingly. Under the new rules, Allianz's operating profit for the full year 2022 would have been 13.8 billion euros instead of 14.2 billion euros. Net income attributable to shareholders would also have been 6.4 billion euros, below the 6.7 billion reported in February.

While Allianz performed better than analysts had expected in its day-to-day business in the past quarter, experts had expected net income to be around 300 million euros higher on average. However, Allianz plans to sell its business in Lebanon, which resulted in a charge of about 200 million euros in the first quarter.

CFO Giulio Terzariol explained the planned separation with the prevailing hyperinflation in the Middle Eastern country. Allianz receives virtually no dividends from there, he said, and the charge now booked stems from losses accumulated so far due to the extreme fall in the value of the Lebanese currency. However, the sale of the Lebanon subsidiary should certainly bring in money for the group, he explained.

Group-wide, Allianz increased its business volume in the first quarter by about four percent to 46 billion euros. This was due solely to the property and casualty business, where the volume grew by a good eleven percent to around 24 billion euros - partly because the insurer demanded higher premiums from its customers. Higher prices alone pushed up the business volume of the division by 5.6 percent, Allianz explained.

Because the insurer also had to shoulder lower claims from natural catastrophes, the division's operating profit jumped almost 23 percent to 1.9 billion euros. Claims from natural catastrophes cost Allianz a total of 117 million euros, significantly less than a year earlier. The burden was entirely due to the devastating earthquake in Turkey and Syria, the presentation said.

The situation was different in life and health insurance. There, the present value of new business declined year-on-year, and total business volume fell by almost three percent. Nevertheless, operating profit jumped by almost two-thirds to 1.3 billion euros thanks to business in the United States.

In the fund business of the subsidiary Pimco and AGI, operating income slumped by around eight percent. Operating profit even fell by 13 percent to 723 million euros. However, the funds of the two companies collected almost 15 billion euros net in fresh money from customers in the first three months of the year. At the end of March, the funds thus managed assets of almost 1.7 trillion euros for customers./stw/lew/mis