Please activate JavaScript!
Please install Adobe Flash Player, click here for download

Allianz Annual Report 2013

C Group Management Report Management Discussion and Analysis 64 Business Environment 66 Executive Summary of 2013 Results 71 Property-Casualty Insurance Operations 78 Life/Health Insurance Operations 82 Asset Management 85 Corporate and Other 87 Outlook 2014 92 Balance Sheet Review 99 Liquidity and Funding Resources 104 Reconciliations Annual Report 2013    Allianz Group 65 In the property-casualty sector, overall market conditions were basi- cally unchanged from the previous year. Stable premium growth in advanced markets was underpinned by moderate rate increases and the gradual improvement of economic activity, for example in the United States and Germany. On the other hand, many markets in southern Europe, for example Italy and Spain, remained in reverse gear with continuous declines in premium income. Premium growth in emerging markets generally proved robust, despite turbulent financial markets. In particular, premium increases in China and Latin America recorded double-digit growth rates. Overall, according to our own market estimates and based on preliminary figures, global premiums grew around 4.5 % in 2013 (adjusted for foreign currency translation effects). Underwriting profitability improved slightly in 2013, reflecting the general positive pricing momentum and the low level of natural catastrophes. But overall profitability was restrained by the challeng- ing investment environment. Despite small increases in the wake of the assumed change in U.S. monetary policy (“tapering”), interest rates remained at low levels and investment returns were therefore subdued. In the life sector, global premium income growth recovered slightly in 2013. This improvement was mainly led by emerging markets, which benefited from relatively strong increases in China and South- East Asia. Latin America continued to post double-digit growth as well. The performance of advanced markets was more mixed, with some – notably the U.S. market – under pressure and others recover- ing rather strongly, for example Germany, France and Italy. In total, according to our own market estimates and based on preliminary figures, global premiums grew by around 3 % in 2013 (adjusted for foreign currency translation effects). The persistent low-yield environment coupled with modest eco- nomic growth depressed new business profitability for traditional life business. Insurance savings products continued to suffer from weak demand against a backdrop of reduced guarantees. However, risk protection products fared better. These included not only tradi- tional mortality, but also health insurance products such as disability and long-term care insurance – which benefited from rising con- sumer awareness of a “protection gap” in these fields. For the asset management industry as a whole, 2013 was a favorable year, although it was a further year of uncertainty in capital markets with volatility remaining at elevated levels. The announcement of the Federal Reserve in May that it would start to take a reduction of its asset purchases into consideration, led to an increase in interest rates. The yield on 10-year U.S. government bonds increased from 1.6 % at the end of May 2013 to around 3 % at the end of the year. As a result of the interest rate increase, valuations for fixed income assets declined, while equities recorded a strong performance. On a global basis, equities rose by 29 % last year. Market flows into equity and fixed income were strong in the first half of 2013. During the second half of the year, fixed income flows were to a certain extent impacted by the rise in interest rates. Flows into equity assets mostly continued throughout the year, reaching levels not observed in the recent past. These equity flows were not only driven by passive products. Active equity managers were also able to capture a portion of the organic growth. The flow development, as well as rising asset valuations, drove revenues and profits higher. Industry efficiency generally improved, despite the continuing growth trend in expenses – due to higher compensation or marketing costs, for example.

Pages Overview