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Nat cat record drags down Allianz profit

Allianz has reported a 2.3% decline in net profit for last year, with CEO Oliver Bate blaming the industry’s “costliest natural catastrophe year”.

Accounting changes from the one-off impact of US tax reforms and the sale of bank subsidiary Oldenburgische Landesbank were other contributing factors to the net profit falling to €6.8 billion ($10.7 billion).

Operating profit increased marginally to €11.1 billion ($17.4 billion) from €11.06 billion ($17.3 billion). Claims from California wildfires, hurricanes and other natural catastrophes totalled about €1.1 billion ($1.73 billion) last year, up from €700 million ($1.1 billion).

Allianz’s property and casualty (P&C) business was affected by these huge claims, with operating profit falling 7.5% to €5.1 billion ($8 billion), while the combined operating ratio weakened to 95.2% from 94.3%.

P&C gross written premium increased to €52.3 billion ($82 billion) from €51.5 billion ($80.77 billion).

The Australian P&C unit made an operating profit of €342 million ($536 million), down 4.2%, while the combined operating ratio deteriorated by 0.3 percentage points to 93.9%.

The German insurer is aiming for an operating profit of €11.1 billion ($17.4 billion) this year, plus or minus €500 million ($785 million).