Earnings call transcript: Allianz Q2 2025 beats forecasts, stock surges

Allianz reported robust financial results for the second quarter of 2025, significantly exceeding earnings expectations. The company posted an earnings per share (EPS) of $7.39, surpassing the forecasted $6.52, marking a 13.34% positive surprise. This strong performance was mirrored in Allianz’s revenue, which reached $44.5 billion, far exceeding the expected $19.46 billion. Following the announcement, Allianz’s stock rose 5.09%, reflecting investor confidence in the company’s growth trajectory. According to InvestingPro data, the company maintains strong financial health with a "GOOD" overall rating, supported by robust profitability metrics and consistent dividend payments for 34 consecutive years.

Key Takeaways

• Allianz’s Q2 2025 EPS of $7.39 exceeded forecasts by 13.34%.
• Revenue reached $44.5 billion, significantly above expectations.
• Stock price increased by 5.09% post-announcement.
• Strategic partnerships and acquisitions bolster growth.
• Full-year operating profit guidance reaffirmed at €16 billion.

Company Performance

Allianz demonstrated strong financial health in Q2 2025, with an 8% growth in total business volume and a 9% increase in first-half operating profit, reaching €8.6 billion. The company’s core net income rose by 6%, and core EPS increased by approximately 8%. These results underscore Allianz’s ability to maintain robust growth across its segments, despite a challenging economic environment. InvestingPro data reveals impressive metrics, including a return on equity of 30% and a healthy dividend yield of 2.99%, making it a prominent player in the insurance industry. Access the full Pro Research Report for comprehensive analysis of Allianz’s financial performance and growth prospects.

Financial Highlights

• Revenue: $44.5 billion, significantly above the $19.46 billion forecast.
• Earnings per share: $7.39, a 13.34% surprise over the $6.52 forecast.
• Solvency II ratio at 209%, indicating strong financial stability.
• IFRS return on equity (ROE) above 19%.

Earnings vs. Forecast

Allianz’s Q2 2025 earnings per share of $7.39 significantly exceeded the forecasted $6.52, resulting in a 13.34% earnings surprise. This marks a substantial outperformance compared to previous quarters, highlighting the company’s effective strategic initiatives and market positioning.

Market Reaction

Following the earnings announcement, Allianz’s stock price surged by 5.09%, reflecting positive investor sentiment. Trading at $113.86, the stock sits just below its 52-week high of $118.98, signaling strong market confidence in Allianz’s future prospects and strategic direction. InvestingPro analysis indicates the stock may have additional upside potential, with analyst targets ranging from $106 to $140. Want deeper insights? InvestingPro offers comprehensive Fair Value analysis and 12 more exclusive ProTips for Allianz.

Outlook & Guidance

Allianz reaffirmed its full-year operating profit guidance of €16 billion, with a potential variance of €1 billion. The company continues to focus on strategic initiatives, including smart growth, productivity enhancements, and resilience strengthening. Allianz’s expansion into promising markets, such as India through a new partnership with Reliance Jio, is expected to drive future growth.

Executive Commentary

CEO Oliver Baethe stated, "We protect people’s most valuable assets, and we help them to prepare for retirement," emphasizing Allianz’s commitment to customer-centric growth. CFO Claire Marie Coste Leputre highlighted, "Our results are excellent. We see continued business growth emerging from all our three segments," underscoring the company’s strong performance across its diverse business lines.

Risks and Challenges

• Geopolitical uncertainties could impact global market conditions.
• Regulatory changes in key markets may affect operational strategies.
• Competitive pressures in the insurance sector could influence pricing strategies.
• Macroeconomic fluctuations may impact investment returns and asset management.

Q&A

During the earnings call, analysts inquired about Allianz’s new strategy with Reliance Jio in India, seeking clarity on growth projections and market penetration. Questions also focused on the Allianz Direct platform’s profitability and the potential impacts of U.S. trade policies on the company’s operations. Allianz executives addressed these concerns, emphasizing their strategic focus on innovation and market expansion.

Full transcript - Allianz (ALV) Q2 2025:

Frank Stoffel, Head of Financial Communications and Valuation Relations, Allianz: Good morning, everyone, and welcome to Allianz’s 2Q and six months twenty twenty five media conference call. Thank you for joining us today. My name is Frank Stoffel. I’m Head of Financial Communications and Valuation Relations, and I’m here at our headquarters in Munich with our Chief Executive Officer, Oliver Baethe our Chief Financial Officer, Claire Marie Coste Leputre and our Group Head of Communications, Lauren Day. Today’s conference call is scheduled for sixty minutes.

And as usual, we will answer your questions following our presentations. With this, it is my pleasure to hand over to our CEO, Oliver Baethe.

Oliver Baethe, Chief Executive Officer, Allianz: Yes. Good morning, everyone. Thank you for dialing in and being with us this morning. We had the pleasure not only to welcome the sum back to Munich, but also report some very strong numbers. I will refer to the presentation that you hopefully were able to access by going through the page numbers, and I would like to turn your attention to Page A four in the deck where we talk about the perspective that Clemire and myself will offer on the second quarter and, more importantly, on the six months of the year.

Again, a record quarter in terms of earnings for the second quarter and for six months. We are very proud of that. And we will try to explain to you over the next couple of minutes to what is driving that. I will not spend too much time on repeating on Page A four what we tried to communicate at the Capital Markets Day last December. We are running two world class businesses.

We still report three product segments, but in essence, we do two things. We protect people’s most valuable assets, and we help them to prepare for retirement, and then we have a number of products that help with that. The more important thing is what are we doing now in order to accelerate the value creation in Allianz. And these three components driving smart and smarter growth going forward, that’s very important, having built the foundation over the last decade and beyond on the fundamentals for that, reinforcing productivity further. We have a very strong track record now, particularly in property casualty, but we’re driving that across the enterprise, also in asset management and life, and further strengthening resilience in very, very difficult times.

The key idea behind that is to continue to transform Allianz as an enterprise from a really world class provider of outstanding products to our consumers, again, to becoming even more customer driven and going beyond the individual product solution, and we’ll talk a little bit more about that. On Page A5, let me highlight a few points around the topic of smart growth and on productivity. Just the top, Claire Marie will give you more detail. The first one is just looking at the six months growth in property casualty, and we have highlighted the volumes effect. So what’s price and what is volume, 8% growth.

Out of that, 5% is pricing and 3% is volume. And when you look at the various components, whether that’s retail versus commercial or our platform businesses in particular, they’re all doing really well. We are earning the benefits of all the work we’ve put into productivity and excellence in the retail lines, but also commercial lines are doing well. And particularly, well are our platform businesses, Allianz Partners, as we showed that. But also, what you don’t see on the page, Allianz Direct is growing 22% in the first six months of the year, out of which is 12%.

So also, Lynn, there is an if you want to call it that way, traditional businesses, which are not really traditional anymore, and our new platforms are growing very well. The second thing that’s the right hand side of Page A5 looks at the continuous productivity delivery, which we need in order to reinvest into growing further. We are reinvesting in new technology, in new products, new services, and we can only do that because we continuously harvest further productivity gains, and that’s before any effect coming from the future technology that is NI and others. And again, in the first six months of twenty five, we have reduced relative to the first six months of twenty four, our expense ratio, and that’s just an illustration of another 40 basis points. And that journey is continuing as we speak.

Let me turn to your attention to a more strategic topic if you think about partnerships and M and A. I know there’s always a lot of interest and excitement around the topic of partnerships and M and A. So Page A6 gives you an overview of what we’ve done in the first six months and what we’re working on. By the way, everyone talks about Allianz does a lot of M and A. We do a lot of stuff.

In fact, we have done more divestments in terms of capital usage than we’ve done investments recently. It doesn’t mean we want to shrink, but we focus on the things that really make sense. Schonzardry in The U. S. Is something we discussed that is another step on the way to make our U.

S. Life business more efficient. We have worked on scaling our direct business with a number of small but very interesting acquisitions, Oilfield, IptiQ, Friday and the LUKO portfolios, which we are integrating now on a larger scale, a strategic partnership with the Royal Automotive Association in the South Of Australia. So we are building our important well doing platform as we speak. We have increased our stake in the joint venture in Sunlam as planned and announced in the past to 49% to build a strong partnership with Sunlam.

We’re now, I think, 3x to 4x the size in Africa of our next competitor. We have closed the Viridium consortium transaction now successfully with a number of very strong partners building what we hope will be the leading live runoff platform, not just in Germany, but over the years also in other markets of Europe. And last but certainly not least, we’ve just announced a new partnership in India. We’ll probably talk about it. We have sold and that you know in the process of selling our participation in the legacy joint ventures with Badajj Allianz and have just announced a new partnership with Reliance under the brand of Jio, which is their financial services and digital product branch, and we’ll talk about that, meaning that after twenty five or twenty four years of very successful presence in India, however, without the ability to really run the companies, we are now in the position with the strongest corporate in India to build a business where we have an eye to eye view and the ability to operate this business rather than be seen as an investor in Now Page A7 gives you another view, and that is how resilient we are.

There’s a lot of always debate over the years, the blah, blah, blah, are you too complicated? What does diversification really mean? We have been saying for a long time now that we really believe that it works, and you see that again in the number, whether that’s in growth momentum across Property Casualty, Life and Health and Asset Management, whether you see that in the financials on operating profit, core EPS or return on capital. And remember, for a long time, we had ROEs that were single digit in Allianz. Now we’re really reaching an exceptionally strong level of returns on capital, but also the resilience of the balance sheet, whether that’s solvency to capital generation, which has significantly improved over prior year’s performance, solvency being very stable and having a very strong financial rating set.

So that’s really what I wanted to say. There is nothing exciting other than we continue to do really well in a very tough environment. You see how difficult it is, particularly for the industrial sector, to deal with the political noise. We have been able to decouple from that and will continue to do so. And with that, I hand over to Claire Marie, who’s going to give you a few more insights into what are the financial and nonfinancial drivers of this excellent quarter and very strong performance in the first six months.

Thank you for your attention. Clemery, please.

Claire Marie Coste Leputre, Chief Financial Officer, Allianz: Thank you very much, Oliver, and good morning as well from my side. Let’s move to Page B3, where you can see the that overall, the group has delivered excellent results in the first half of the year and the second quarter as well. Clearly, this is positioning us very well for the delivery of our full year targets, and I will say even more importantly towards our Capital Market Day ambition. First, what we see on this page is that we continue to see a strong growth across our three segments as we have previously experienced, and this despite some FX effect. We grew our total business volume by 8%.

And actually, at constant FX, it would have been double digit at 10%. Our operating profit in the second quarter is even higher than the record level we have achieved in the first quarter. So overall, our first half operating profit is at EUR 8,600,000,000.0, which is up 9%, an excellent level, which is fully on track for our guidance of EUR 16,000,000,000, plusminus EUR 1,000,000,000 for the full year 2025. And here as well, and I believe it’s very important, you can see that our three businesses are contributing to this positive development. We see as well an excellent development of our core net income, which benefited as well from the sale of the JV with UniCredit in Italy, so the UniCredit Vita JV for our Life business in the second quarter.

But even if I adjust for this gain on sale and the Badaj related tax provision that we have booked in the first quarter, you may remember this one, our core net income is up 6% and our core EPS is up approximately 8%, which is at the midpoint of our 7% to 9% EPS growth rate that we have mentioned during the Capital Market Day. As mentioned by Oliver, we continue to deliver an excellent level of IFRS ROE. And for the quarter, our IFRS our core IFRS ROE was above 19%. Beyond the P and L item, our resilience remains strong, and our Solvency II ratio emerged at 209%. What we see as well is that we have an excellent capital generation of around 30 percentage point in the first half of the year.

So overall, we have an excellent set of number from growth to profitability and financial strength. Clearly, that makes us very happy together with the nice sun we see currently in Munich for a change. If we move to Page B4, and we have a look at our P and C segment. Here, you see a strong level of growth and an excellent level of profitability in both retail and commercial. In the second quarter, we achieved an even better level of combined ratio compared to the first quarter, and we delivered an even higher level of operating profit, which was already at a record level last quarter.

This is bringing our first half operating profit to €4,500,000,000 which is up 12% versus last year. This is the outcome of higher volume at increased margin with some offset from FX effects in the investment results. First, what we see on this page is a good top line momentum that is continuing in the second quarter. This results in an internal growth rate of 8% for the half year. The growth was driven by both price for 4% and volume for 5% in the second quarter on a stand alone basis.

The volume effect was higher compared to the first quarter with very good volume growth coming from Commercial Lines, in particular, from partners. And we see as well, I think, in this quarter numbers, a lot of good examples around our platform play. So beyond partners, we also see this very high growth that Oliver has already mentioned on our direct business, and we expect to continue building on that one as our direct entity is going to grab the benefits from the integration of Friday and IptiQ that we have closed recently. Our pricing trends continue to be robust in general with differences across geographies and line of business. Very clearly, this is a very nuanced world.

But the average renewal rate at six ms amounts at plus 5%, which is slightly down compared to what we had at the end of the first quarter. Our underwriting profitability is excellent with the combined ratio at 91.5%. This is fueled by three main components. The first one is an excellent attritional performance as we are very clearly, and we see that across the portfolio, earning our pricing and underwriting actions structurally. We have a relatively benign nat cat experience in the first half, which is counterbalanced by a conservative level of reserve setting that we have taken in that first half as well.

And we continue to focus on productivity with an expense ratio, which is 40 bps lower than the expense ratio last year at 24%. By segment, we see strong improvement in our retail business, while commercial profitability remains very good, as you can see on this page as well. So overall, it’s an excellent first half for the P and C business. Our operating profit is 12% ahead of the midpoint of our guidance run rate. We have good underlying volume growth, and we have an excellent underwriting profitability.

So positive developments here are very broad based, both from a line of business and from a geography perspective. So high level of diversification contributing to those excellent set of numbers. Let’s move to Life and Health on Page B5. And here, we continue to see double digit new business growth at an attractive new business margin in our preferred line of business. Our operating profit is up 5% versus last year, which is exactly in line with our outlook and our Capital Market Day expectations.

It is very interesting from my perspective to realize that our Life businesses outside of our two largest entities in Germany and The U. S. Contributes over 60% of the operating profit and increases their contribution 11% year on year. So we have a high quality, well diversified portfolio on the Life and Health side. And this is as well what you see in the new business growth for the half year, which is broadly spread with double digit growth in Germany, in Italy, in Asia and CEE as an example.

We are as well particularly pleased with the underlying CSM development in the first half of the year. What we see here is that, first of all, our CSM growth adjusted for the negative FX effect is almost 4%, which demonstrates our low level of noneconomic variances in the current environment. And the second thing is that our normalized CSM growth is around 3%. This is clearly a strong level of growth relative to the 5% of annual expectations we do have here. So in Life and Health, the market appetite for our products continue to be fueled by the secular trends we have discussed in the Capital Market Day, the quality of the Alliance brand and the trust in our resilience.

This allows us to build sustainable value to be earned in the future. Let’s move to Page B6 and let’s look at the Asset Management segment, where here as well, we are delivering very good results in a very volatile quarter. First, when you look at our results, you need to keep in mind that more than 70 of our third party assets under management are U. S. Dollar denominated, meaning that we need to understand the underlying drivers to judge the performance.

And from all our segments, Asset Management is as well the most impacted by the U. S. Dollar volatility. Corrected for FX, our Asset and our Management growth is around 4%. What we have seen in the first half is net inflows of EUR 42,000,000,000, which means an organic growth rate of around 4% annualized, which is very strong for a pure active manager, in particular, in the volatile market we have experienced in the first half of the year.

Those inflows mainly emerged from PIMCO. And some colors I’d like to give here. So first of all, PIMCO continues to see an excellent traction in its active ETF proposition, which is now sitting at EUR 40,000,000,000 of assets under management with EUR 10,000,000,000 year to date net flows. Beyond the fixed income strategies, the credit and the private alternative strategies are the ones which have attractive most flows this year, so very also much in line with our Capital Market Day perspective. And into July, we have continued to see more than EUR 20,000,000,000 of inflows, where clearly, the offering from PIMCO continues to be supported by a strong outperformance for our customers of our strategies consistently over time.

Clearly, our profitability in the Asset Management segment is very resilient with an operating profit, which is up 5% in the context of negative FX effect and lower performance fees. Excluding performance fees and FX adjusted, our operating profit is up 7%, which demonstrates the strength of the underlying in a volatile environment. At both our asset managers, our third party asset under management margin remains very stable in a competitive environment, and our focus on productivity is clearly unchanged as the development of our costincome ratio demonstrates. So while we may continue to see some translation effects from the U. S.

Dollar into our numbers in future quarters, Our strong track record on managing productivity, efficiency and profitability provides resilience. Clearly, here, we are confident on continued net inflows and our ability to create value for our customers and shareholders as well. Similarly, on Page B7, I’m very happy with the development of our solvency ratio. We remain strongly capitalized with our sensitivities broadly unchanged. Some elements I would like to highlight on the development of our solvency ratio since beginning of the year.

First of all, we have an excellent organic capital development at 13 percentage point year to date. So as an organization, we have been much more focused on these metrics, and you can clearly see some of the early benefits of this focus in the improved generation year to date. It’s very nice to see more finance colleagues working with the business colleagues in order to improve that metric. So this is clearly paying off. Our OCG is also partially offset by the cost of the 2025 buyback program and as well as the normal dividend accrual.

Then we have a small negative market effect, and we have a positive contribution from the management actions we have taken, mainly from the reinsurance transactions at Easy Life and the disposal of UniCredit Vita. So those results reiterate our confidence on the strength and resilience of our capital position. At this stage in the year, we feel even more confident in our ability to improve our capital generation as we advance the initiatives we have outlined in the Capital Markets Day. Let me conclude on Page B8. Our results are excellent.

We see a continued business growth, which is emerging from all our three segments, and we have a record level of profitability. This position us very well for the second half and allows us to reiterate our outlook of €16,000,000,000 plusminus €1,000,000,000 operating profit for 2025. More fundamentally, this is as well positioning us very well for the delivery of our Capital Market Day ambitions. As mentioned by Oliver, we are working on the initiatives along those three levers: driving smart growth, reinforcing productivity and strengthening resilience. And maybe as an anecdote, we have twice per year with Oliver sessions with the Board of Management of each of our operating entities.

And the sessions we had in May, which are the strategic sessions, were particularly energizing in terms of ideas and cross sharing of initiatives from one operating entities to the next, which is allowing us to have full confidence for the future. So I’m very much looking forward to that. And now I clearly want to thank as well all our employees for their contributions to those excellent set of numbers. And I hand over back to you, Frank, for questions.

Frank Stoffel, Head of Financial Communications and Valuation Relations, Allianz: Thank you, Claire Marie. And before we start our Q and A session, let me mention the usual housekeeping items. We will answer all questions in English, but if you’re more comfortable to ask a question in German, please feel free to do so, and we will repeat it back in English for everyone on the call to understand. Star five if you have joined via telephone or press the talk request button on the web audio call. If you are on an IP based telephone, this may cause technical problems for you.

If this is the case, please e mail, as usual, media dot contactallianz dot com, and we can assist you with your setup or we can take your question and ask it on your behalf. The first question comes from Alexander Hoeppner from Reuters. Alexander, the line is open.

Alexander Hoeppner, Journalist, Reuters: Hello? Can you hear me?

Frank Stoffel, Head of Financial Communications and Valuation Relations, Allianz: Loud and clear.

Alexander Hoeppner, Journalist, Reuters: Perfect. I’ll limit myself to just one question. Claire Marie, What have to happen in the third quarter that you’re confident enough to raise your outlook for the whole year? In recent years, we have heard it at this point of time that you will, for example, be at least in the upper half of your outlook. Can you elaborate a bit on that?

Claire Marie Coste Leputre, Chief Financial Officer, Allianz: So thank you very much for your question. So clearly, this is too early for us to adjust our outlook at this point in time. Clearly, I mean, in the first half of the year, we have seen a lot of geopolitical instability, a lot of economic instability in the financial markets. And it’s also from a nat cat perspective too early to react react very clearly. I mean like the world is quite unpredictable, I think, from a weather perspective, and we need to reflect on that point as well.

So I think what is clear from our end is that on the fundamentals, we are extremely confident, and we also plan for different type of economic scenarios to be ready. So I think our level of resilience is extremely strong, and that’s the way we are thinking as a team, but it’s too early for us to react at this point in time.

Alexander Hoeppner, Journalist, Reuters: Okay. Thank you.

Frank Stoffel, Head of Financial Communications and Valuation Relations, Allianz: Thank you, Alexander. The next question comes from Herbert Fromme, Physicians Monitor. So fromme, your line is open.

Herbert Fromme, Journalist, Physicians Monitor: Munich Re has left some climate initiatives a couple of months ago. Does Allianz have similar plans?

Claire Marie Coste Leputre, Chief Financial Officer, Allianz: So I think on the so we do not have similar plans. But more fundamentally, what is important for us is to deliver against the plan we have been mentioning we want to deliver against, right? So that’s really what is driving us as an organization because we believe what we are doing is creating value and is ultimately creating value for all stakeholders, but including our shareholders very clearly. So that’s the way we are approaching it. So including the KPIs we are reporting our information we are using for steering against the plans we want to deliver towards.

Frank Stoffel, Head of Financial Communications and Valuation Relations, Allianz: Thank you. Let me repeat. There seems to be no further question. There are more questions coming in. The next question comes from Tom Sims from Reuters.

Tom, your line is open.

Tom Sims, Journalist, Reuters: Good morning. Could you elaborate just more on what might be coming from India and plans in India? And also maybe talk a little bit more about plans for AGI in The United States?

Oliver Baethe, Chief Executive Officer, Allianz: AGI, I can do briefly, no change. More flexibility, but as we speak, no change. On India, if you allow me, I take a little bit more time because we started in India in the year 2001 with our partners, Badajj. We brought all the capital ever invested in Badajj insurance came from Allianz. All the people ever hired came from Allianz.

All the technology overdeployed. The problem was because of regulation, we could only take 26% of the company, and we were running them for a long time with our partners successfully. The issue was always we wanted to run this business rather than just invest and build it. And we couldn’t agree with our partners when and how we could do that. So at some point, we had the discussions that we need two separate ways because we want to be an operator in one of the most promising growth markets in the world in terms of insurance.

And we are lucky in two ways. One, we found a very amical and for our shareholders, very attractive solution to exit this very long partnership. We’re in the process of doing that both financially and operationally. It’s a very amical separation, and it’s very good for us. The second one is we have been lucky again because we found with Reliance the most powerful institution, private institution in India and one of the most innovative that we believe in the world actually.

Just look what they have done to mobile phones. They have 700,000,000 clients in India now, and half of the population and on mobile phones, 70% market share. So we are looking forward to building a comprehensive partnership around insurance and protection in India. We have just launched the first piece of it, reinsurance. People ask why reinsurance?

Very simple. Because we have no noncompete because we haven’t had a reinsurance partnership with Badajoz before, so there’s also no confusion for business partners and clients. So that’s chapter one. Now as we run the separation, just think about very operational things like taking the Allianz brand of Allianz Badajj offices, that takes quite a little bit of time. We expect by the first quarter of next year to be able to launch maybe the second quarter, let’s not be too be over ambitious, our new businesses.

Next chapter is Commercial Lines, then Retail Property Casualty and then Health Insurance. And we always look at it not just at the insurance component but also leveraging our platform businesses. So we will have work with partners. We will work with the new services that have we’ve been developing over the last few years because that’s what we both believe is needed. So we are super excited, and we’re building it up.

Also, the government has been super supportive. We’ve received all necessary approvals that we needed for the exit from Badajoz, and now we’re looking forward to getting the approvals for launching the new businesses. So all good for the moment. Let’s keep fingers crossed, too. We always need a little bit of luck as well.

Tom Sims, Journalist, Reuters: Okay. The answer on The U. S. And AGI was just a little bit short. Is it what do you mean no change?

Oliver Baethe, Chief Executive Officer, Allianz: Exactly what I said, no change. The issue is we have now a lot less onerous things to do. So I don’t have to sign certain papers anymore. By the way, we also had obligations for PIMCO and Allianz Life of America. They have gone away, and we have more freedom to think and what to do, but there’s nothing planned at this point in time to do different from what we’ve done.

Frank Stoffel, Head of Financial Communications and Valuation Relations, Allianz: The next question comes from Ben Dyson, S and P Global Market Intelligence.

Ben Dyson, Journalist, S&P Global Market Intelligence: Yes, just want to ask a little bit about Allianz Direct. Mr. Bates mentioned a top line figure there. I was wondering if you could say anything about the profitability of it. And also what the next plans are for Allianz Direct development, whether there’s going to be more acquisitions because I know there have been quite a few.

But yes, just how are you going to proceed from here on that particular business? Yes.

Oliver Baethe, Chief Executive Officer, Allianz: Clemery can give you some numbers. We have had, as I said, 20% top line growth. That’s fair. We’ll show you the numbers. The profitability is actually very good.

We’ll show them to you in a second. It’s both price and volume. It’s, however, always differentiated. We have The Netherlands. We have Germany, which is, by the way, now doing very well.

We have Italy. These are the three engines for that. And yes, you’re right, we have done a few acquisitions. We now need to carefully integrate them in order to make sure that we deliver the scale benefits to the bottom line, but we are very optimistic to deliver on that. Again, some numbers to come from Glamoury.

But just let me tell you what it is because a lot of people always are asking, how does that work? We used to tell the story for twenty years, we’re hedging sort of against a loss of market share and customer interest in what’s supposed to be more expensive distribution channels, let’s say, agents or broker. That is not the case anymore. What the purpose of Allianz Direct is to offer a self-service and therefore, more efficient and lower cost alternative for consumers that want to purchase and service themselves. So there is a rational decision for people to make, do I want to have the lowest possible price option by having very low cost because I service myself as a consumer?

Or do I want to use the service of our agents? And that is can be product specific. People can buy auto insurance online, and they can get great advice on how to protect their home, their health or prepare for retirement. So in Germany, for example, we call this Auto for Alle, car for everyone. And all our channels, in particular, our agents have access to the same sets of products.

So in fact, we are having seen beneficial synergies before the channel, and that was is totally different to the story that has always been told that direct would cannibalize other channels. We do not see that. We have almost zero, to be precise, cannibalization between the channels, and therefore, going to double down. And the second benefit we see, there was always the story around, do you need to not have a different brand for your channel? The opposite is true.

Consumers are increasingly flocking to us directly to our websites and front ends and are deciding themselves where to buy. So we actually would be confusing consumers if we would brand it differently. It’s a part of a comprehensive offer where you, as a consumer, decide what you want to do, how you want to do it and at what price versus value trade off you’re going to buy and get service. Now, Claire Marie, some numbers on profitability?

Claire Marie Coste Leputre, Chief Financial Officer, Allianz: Yes, sure. So on direct, so we have seen an improvement as well of our combined ratio, which has moved from last year’s six ms 98.5% to 93.5 combined ratio for the six ms this year. So clearly, what we see at direct is, as mentioned by Oliver, right, is our strategy working in terms of increased growth and increased profitability in the setup as we are also gaining scale into the Direct platform. So you mentioned as well that we have a number of smaller acquisition that are ongoing, right, which are very important for the direct platform, always as well with that logic of building scale here. So we have closed now for the third quarter Friday, which was an acquisition for both, I mean, in France and Germany, which is now going to come into play in the second quarter.

IBTQ is also has also closed on July 1 and is also going to come into play in the third quarter. So from those two, we expect approximately 450,000 more policies to join our platform. So that’s relevant, right? And we have signed as well another smaller deal, Eurofil in France, which is going to be closed likely 2026, which is again going to contribute to the scale up of direct.

Frank Stoffel, Head of Financial Communications and Valuation Relations, Allianz: Our next question comes from Susanne Schier, Handelsblatt. Susanna, your line is open.

Claire Marie Coste Leputre, Chief Financial Officer, Allianz: Hello. I have a question regarding the German Life business. The first quarter was relatively strong and but sales in the second quarter declined. So what are your expectations for the second half? So thank you very much for your question.

So in Life, we always have a bit of of seasonality in the numbers from one quarter to the next. Usually, in the Life business, the first quarter is always stronger, and the fourth quarter is as well stronger compared to the second quarter and the third quarter, in particular, in Germany or in France, so it depends a bit from one market to the next. So that’s clearly what you have seen in the second quarter for Alliance Leben. And also, we had a bit of an amplification of this seasonality effect, if you want, as we had less large ticket contract in this second quarter. Those large tickets always tend to be a bit volatile.

You never really know when you are going to sign large tickets. The fundamentals are even better compared to last year on the Leban business. So I expect the fundamentals to continue if you want, and then we will always see a bit of volatility coming from those large tickets. Thank you.

Frank Stoffel, Head of Financial Communications and Valuation Relations, Allianz: Thank you, Zane. I’ve got a follow-up question from Herbert Frommer from Physicians Monitor. Herbert, your line is open.

Herbert Fromme, Journalist, Physicians Monitor: Couple of follow ups. On Allianz Direct, could you give us a number of insured vehicles for the group the Direct group? The second question, The U. S. Trade policy.

I couldn’t listen to your first minutes for technical reasons, but I’m sorry if you already mentioned that The U. S. Trade policy with its various levels of punishing countries, does that affect Allianz in any way? Does it have a negative effect? And third, again, the climate.

You said you didn’t plan to leave climate initiatives. Is there a pressure in The United States on your operation there to leave or to cancel climate initiatives as this pressure is felt by other financial institutions?

Oliver Baethe, Chief Executive Officer, Allianz: Yes. Thank you. Let me start with The U. S. Trade policy because that’s obviously a very, very astute question.

We do not see that directly. It’s more related to the sectors in the manufacturing sphere who have a global sort of footprint where tariff on spare parts or productions are much more volatile and have much more negative effects, sometimes more than people sort of show yet. Where we see it is obviously in the volatility in the financial markets. So we have, as Glammarie said, have taken a more conservative stance on how we do asset allocations. So overexposure to The U.

S. Is much less than in other places. Just generally, exposure of Allianz to volatile assets is a lot less. Where we do see it is in a lot of the accounting noise, Mr. Frommer, when you look at revenues and others, but Clemery said it, you’re talking about €160,000,000 effect to a company that hopefully will have at least €16,000,000,000 of operating profit.

So even there, the numbers are not huge, but there’s lot of noise around it. If I may add, Clamery said it already in an interview, we do hedge the one the numbers that are really important. That’s the free cash flows that we intend to distribute as dividends. We hedge those free cash flows 100% for twelve months out and then to hedging efficiency less for the a little less actually for the second year. Think it’s about 70%.

I don’t know the number precisely. So we are trying to make sure that we, as much as economically useful, immunize ourselves against the volatility in the cash and the rest is noise. Now however, as we all know, eventually, trade conflicts reduce global growth. And therefore, it’s very important for Allianz to continue to diversify across globally. Claire Marie just mentioned, we have now the majority of our P and C premiums from outside of Europe.

That’s something people really do not know and don’t expect. It’s important we keep on diversifying and doesn’t mean doing stuff that’s mediocre but being very strong outside of the Eurozone. That’s why we are doing very well even under pressure. At least for now, keep your fingers crossed, please. Yes.

And on the climate side, let me add, I forgot, we do not have the pressure that other people feel. It also has something to do with the fact that we do not have members that you force into doing anything. The issue that the U. S. Administration has, and that’s not just on climate, if it becomes discriminatory.

So we have agreed in particularly in the asset owner lines that we share objectives, but we, for example, don’t change capital allocation. We don’t enforce the preference of certain investors. We have each of us, independently common standards. And as Claire Marie said, this is what we’re following on. And nobody has anything against having your own targets.

Claire Marie Coste Leputre, Chief Financial Officer, Allianz: And I think, Usain, had a question on the number of policies, right, we are aiming for direct. This is not an information we do share individually operating entity by operating

Frank Stoffel, Head of Financial Communications and Valuation Relations, Allianz: Good. Thank you very much. It looks as if this was the last question for today. For your calendars, we will report our financial results for the third quarter on November 14, and we very much look forward to continuing our exchange then. This concludes today’s media call on our 2Q and six months financial results.

Thank you very much and goodbye.

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