W.inheritance. The corona crisis has left its mark on the insurance industry. The numerous cancellations of major events are particularly troubling for Allianz. Europe’s largest insurance group had already warned in May that further burdens could be expected even after the weak first quarter. Ultimately, the numbers for the latest reporting period from April to June were not as bad as analysts had feared beforehand. CFO Giulio Terzariol confirmed that the property and casualty insurance division had proven to be resilient. While the combined ratio reached an increased level of 96.7 percent in the entire first half of the year, it fell again to 95.5 percent in the second quarter. The key figure indicates what proportion of its premium income the insurance company has to spend on damage, administration and acquisition costs. It is therefore an important indicator of profitability. Analysts had expected a deterioration to 97.5 percent in the second quarter and were therefore positively surprised.
As the group’s largest division, property and casualty insurance has so far achieved largely stable sales despite the decline in earnings caused by the crisis. Group-wide, however, revenue fell by 6.8 percent to EUR 30.9 billion in the second quarter of 2020, with the decline mainly being caused by the life and health insurance line. In operational terms, Allianz earned almost 2.6 billion euros in the period from April to June, 19 percent less than in the previous year. The bottom line was that consolidated net income shrank by 29 percent to a good 1.5 billion euros. The asset management with its subsidiaries Pimco and Allianz Global Investors delivered encouraging figures. Net inflows of investment funds combined with rising market values let the assets under management grow to a total of 2.25 trillion euros.
The chairman of the board, Oliver Bäte, described the group figures as robust and said he was confident of “stable business results also in the second half of 2020”. However, Bäte did not provide a new profit forecast for the full year. The management has put the previous burdens from Covid-19 based on the operating result at 1.2 billion euros. Analysts expect Allianz to achieve an operating profit of 9.7 billion euros in 2020 instead of the previously targeted 11.5 to 12.5 billion euros. According to forecasts, the dividend should remain at a stable level of EUR 9.60 per share. Based on the current share price (EUR 181.98, as of September 7, 2020), the Allianz share has the prospect of a high expected dividend yield of almost 5.3 percent.
Allianz shares have now made up for a good part of the price setbacks caused by the crisis in spring 2020. Investors who generally share a positive assessment of Allianz can find investment alternatives in Express Certificates Relax. These offer opportunities to implement your own strategy with a possible early repayment, high potential interest rates and a bullet buffer.
4.30 percent interest per period in the case of early repayment and 40 percent final buffer
The DekaBank Allianz Express Certificate Relax 12/2026 (WKN DK0X03) offers the option of early repayment at the nominal amount (EUR 1,000.00) plus the corresponding interest amount if the redemption thresholds fall. Otherwise, the maximum payout of EUR 1,258.00 per certificate can be achieved on the final maturity date in December 2026 if the closing share price on the valuation day maintains the barrier (60.00 percent of the starting value).
Falling below the barrier on the valuation day, however, leads to losses. In such a negative scenario, no interest is paid and Allianz shares that have fallen in value are transferred to the investor instead of the nominal amount at 100 percent of the starting value. In addition, as with any certificate, the issuer risk must be taken into account because, particularly in the event of DekaBank’s insolvency, there is a risk of losses or even total loss.
The subscription runs from 14.09.2020 to 02.10.2020, subject to an extension or shortening.
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Rating from September 25th, 2019, more information at www.deka.de/privatkunden/auslösungen/scope-zertifikate-management-rating
As Head of the Private Banking, Product Management and Product Sales unit of the Deka Group, Hussam Masri is responsible for product development and product management for mutual securities funds, asset management and pension products, certificates and private banking.