FRANKFURT (Reuters) – German insurer Allianz <ALVG.DE> on Friday declined to provide a forecast for 2020 given uncertainty around the COVID-19 pandemic, despite delivering an unexpected 6% rise in third-quarter net profit.
Allianz, like other insurers, has warned about the impact of clients making claims for business interruption and cancelled events from lockdowns, while demand for car and travel insurance has fallen.
Chief Financial Officer Giulio Terzariol said on Friday volatility in financial markets could also increase due to the U.S. election outcome. He refrained from offering guidance about the company’s full-year prospects.
“These are not normal times,” he told journalists.
Net profit attributable to shareholders of 2.063 billion euros ($2.44 billion) in the three months through September compares with 1.947 billion euros a year earlier. It was higher than a 1.626 billion euro consensus forecast.
The bottom line was helped though by an increase in profit unrelated to Allianz’s core activities. Those included higher realised gains over the summer from sales in its portfolio and lower impairments, after a writedown for Argentinian bonds a year ago.
The company also definitively cancelled a share buyback that had been on hold “in light of the ongoing economic uncertainties”.
The shares were up 1% in mid-morning trade, with analysts at Barclays calling the results “overall a decent beat”.
Earlier this year, the insurer abandoned its 2020 profit target of between 11.5 billion euros and 12.5 billion euros due to economic uncertainty resulting from the pandemic, and said it expected to post the first annual decline in profit in nearly a decade.
“We remain confident to not just weather the COVID-19 crisis well, but to build an even stronger Allianz,” Chief Executive Oliver Baete said.
Allianz’s combined ratio, a measure of profitability for its property and casualty division, one of its highest revenue earners, worsened slightly to 94.5% in the third quarter, up from 94.3% a year earlier. Readings below 100% indicate profitability.
(Reporting by Tom Sims and Alexander Huebner;Editing by Jane Merriman and Elaine Hardcastle)