Allianz (ALVG.DE) reported a 30% decline in its net profit for the third quarter, primarily due to an increase in claims stemming from natural disasters.
Despite this setback, the German financial services company maintained its full-year profit outlook.
For the three months ending on September 30, Allianz posted a net profit attributable to shareholders of 2.021 billion euros ($2.16 billion).
This figure slightly exceeded analysts’ expectations, who had forecasted 1.989 billion euros. However, it marked a significant drop from the 2.866 billion euros recorded during the same period in the previous year.
The company faced an unusually high level of claims during the third quarter, mainly as a result of flooding and hail storms that affected continental Europe, including countries like Germany, Italy, and Austria.
Despite these challenges, Allianz remained committed to its 2023 operating profit target, which ranges between 13.2 billion and 15.2 billion euros.
Giulio Terzariol, the Chief Financial Officer of Allianz, expressed confidence that the company would achieve the upper half of this target.
Following the announcement, Allianz’s shares saw a 2% increase in late morning trading in Frankfurt.
This decline in quarterly profit marked a departure from the gains observed over the past few quarters, during which Allianz had been recovering from losses related to the war in Ukraine, volatile financial markets, and the global pandemic.
One key indicator of the company’s performance is its combined ratio, which measures the profitability of its property and casualty division—an essential revenue source for Allianz.
In the third quarter, the combined ratio deteriorated to 96.2%, compared to 92.5% in the same period a year earlier.
A reading below 100% indicates profitability, so the higher ratio suggests that the company faced increased challenges in this division during the third quarter.