OREANDA-NEWS. March 01, 2012. In 2011, Allianz in Central and Eastern Europe (CEE)1 delivered strong results despite the ongoing financial crisis and a still volatile economic environment. Total revenues remained stable at 3.8 billion euros. Exchange rate fluctuations had only a minor effect overall. Operating profit in the region increased by 158 percent to 295 million euros compared to 114 million euros in 2010, reported the press-centre of Allianz.

"Allianz in Central and Eastern Europe delivered a strong set of results in 2011 despite the ongoing financial markets turmoil, weak economic environment and strong competition. We are satisfied with the strong recovery in profits and we are well positioned to benefit from any upturn in the markets," said Manuel Bauer, Member of the Board of Management of Allianz SE responsible for growth markets.

Property and Casualty Insurance drives the improved result

In 2011 gross premiums written in the Property and Casualty business in CEE amounted to 2.57 billion euros compared to 2.63 billion in 2010 which corresponds to a decrease of 2.2 percent. Internal growth amounted to an increase of 1 percent.

Operating profit in the Property and Casualty business in CEE demonstrated a strong growth of nearly 250 percent amounting to 194.4 million euros in 2011 versus 56 million euros in the year before. This positive development was driven by the combined ratio which improved by 5.4 percentage points to 96.6 percent.

"Even though challenging economic circumstances in many parts of the region influenced revenue development in our property and casualty business, operating profit improved in every country with widespread improvements in the combined ratio. As well as benefiting from a much lower level of natural catastrophe claims than in the prior year, we made significant progress in expense reduction initiatives, building a more efficient platform that is essential to our success going forward," commented Bruce Bowers, regional CEO of Allianz in Central and Eastern Europe.

In Russia, the integration of our three Property and Casualty companies which started in summer 2011, has now entered the final stage and from April 2012 the new company will trade only under the brand name of Allianz. The rebranding in Russia is an important part of the global policy that Allianz has been pursuing in order to establish a single image of the Group around the world and to leverage Group global business lines and activities.

Bruce Bowers: "With an expected growth rate of 3.7 percent, Russia represents one of the fastest growing economies in the CEE region in 2012. Taking the brand of the global financial leader which will replace the brand ROSNO, we show our customers that the unified Allianz has become even stronger in the Russian market".

Life and Health insurance continues to perform

Total premiums in the Life and Health business in CEE kept growing and reached 1.1 billion euros which reflects an increase of 5 percent compared to the same period in 2010. Internal growth amounted to 1.1 percent.

Russia performed outstandingly with newly developed investment products driving a doubling of its life revenues. The Czech Republic, Slovakia and Poland also continued to deliver positive growth to the CEE Life and Health business.

Operating profit amounted to 76.6 million euros in 2011, corresponding to a 20 percent increase. This was mainly due to improved efficiency and increased sales of profitable products. Growth in operating profit was particularly high in Slovakia with a 32 percent increase, and Russia moving from loss to profit.

Bruce Bowers: "Population aging in the CEE region is a growing trend that is expected to significantly increase the burden on state pension systems, the result of which is very likely to be reduced payouts for pensioners. Supplementary retirement provision products are therefore becoming more necessary than ever, and being financially strong and innovative, Allianz remains a reliable partner for its clients in this promising market".

Pension Fund and Asset management business continues to grow

In Hungary, a re-nationalization of the mandatory private pension fund business resulted in 1.4 billion euros of pension assets being transferred from the Allianz Pension Fund in Hungary to the State in the second quarter of 2011. This represented two-thirds of pension assets under management, and had a severe negative impact on our results from this business. Assets under management of other Allianz pension fund operations in the region grew by 6,5 percent to 70.7 million euros in 2011. With a cost-income ratio of 54.3 percent Allianz Pension Fund and Asset management operation contributed an operating profit of 32.3 million euros to the CEE results.

The Allianz Pension Fund in the Czech Republic once again won the respected monthly magazine "Banka" award for best Pension Fund.

Focus on core markets

The implementation of Allianz Group’s strategy of focusing on efficiency improvement and development in markets with high potential resulted in a number of structural changes in the CEE region in 2011. We completed the divestment of our banking activities in Poland and withdrew from Kazakhstan.

"Our stable business portfolio and underlying earnings resilience puts us in a good position to weather economic headwinds in 2012. Whilst CEE grew approximately 3.8 percent in 2011, in 2012 we expect only a growth rate of 2.7 percent with shrinking economies in Croatia and Hungary," commented Manuel Bauer: "In 2011 we have seen a positive development in the number of customers in CEE, especially in the Czech Republic, Bulgaria, Hungary, Romania. This is a clear sign that customers look for a reliable and stable partner in times of uncertainty," he added.

1 Allianz is active in: Bulgaria, Croatia, Czech Republic, Hungary, Poland, Russia, Romania, Slovakia, Ukraine.