Allianz Cuts Buyback Program Amid Pandemic Uncertainty -- Update

--Allianz has discontinued its 2020 share buyback program, citing economic uncertainties

--The outstanding part of the program, totaling $887.3 million, won't be executed

--The coronavirus hurt earnings in the first nine months of the year, though net profit in the third quarter rose on-year

By Cecilia Butini

Allianz SE said Friday that it decided to discontinue the 2020 share buyback program it previously suspended in light of the economic uncertainties brought about by the coronavirus pandemic.

The German insurer said it won't execute the outstanding part of the program, which amounts to 750 million ($887.3 million).

Allianz attributed a decline in operating profit in the first nine months of the year to a EUR1.3 billion hit from the coronavirus pandemic, it said. Operating profit for the first nine months dropped to EUR7.78 billion from EUR9.10 billion the year prior.

The property-casualty segment was particularly hurt by the coronavirus pandemic through the first nine months of the year, Allianz said. Operating profit in the segment declined 17% in the period compared with the previous year, as the underwriting result was heavily affected by the pandemic.

Allianz's life and health insurance segment was also affected by the pandemic as the present value of new business premiums declined in the third quarter, especially in the U.S. and in Germany, the company said.

In the third quarter, however, the company's net profit increased due to a higher non-operating investment result, which was then partly offset by higher restructuring and integration expenses and by lower operating profit, the company said.

Allianz posted net profit of EUR2.06 billion for the third quarter compared with EUR1.95 billion the year before. Operating profit fell slightly in the quarter to EUR2.91 billion, from EUR2.98 billion a year prior, while revenue fell to EUR31.4 billion from EUR33.4 billion.

The insurer's solvency II ratio--which represents capital strength--was 192% at end of the third quarter.

Write to Cecilia Butini at cecilia.butini@wsj.com

(END) Dow Jones Newswires

November 06, 2020 02:48 ET (07:48 GMT)

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