Allianz Earnings: Better Life and Health Drives a Decent Beat Versus Consensus; Shares Undervalued

Allianz has delivered a solid mid-single-digit rise in operating profit, solidly ahead of company-compiled consensus. The operating profit outlook of EUR 14.8 billion has been confirmed, plus or minus EUR 1 billion. The share buyback has been extended by EUR 500 million. Meanwhile, operating profit within the property and casualty business has declined a bit due to higher natural catastrophe claims, particularly the floods in southern Germany. The life and health division has performed well and respectable net inflows have bouyed assets under management. Further, while solvency has only improved a moderate 3 percentage points, the capital generated is sound at EUR 4 billion. Growth of 6-8 percentage points for operating capital generation has been outlined. Considering Allianz produced EUR 13.8 billion in OCG last year, we think this positions the business well for the dividend for 2024 earnings. We maintain our fair value estimate and no moat rating.