The COVID-19 crisis caused one of the most severe economic and financial market turmoils. While financial markets have rallied in the second quarter of 2020, the economic recovery remains fragile. However, Allianz with its well-diversified business portfolio and robust balance sheet has continued to successfully navigate through the current crisis and has achieved solid results in the second quarter of 2020. Due to the continuing uncertainties we currently do not give an updated operating profit outlook for 2020.
Internal revenue growth, which adjusts for currency and consolidation effects, amounted to -7.7 percent in the second quarter of 2020, mostly driven by the Life/Health business segment. Total revenues decreased 6.8 percent to 30.9 (2Q 2019: 33.2) billion euros in the second quarter of 2020. Operating profit decreased 18.8 percent to 2.6 (3.2) billion euros in the second quarter of 2020. In our Property-Casualty business segment, operating profit dropped due to COVID-19-related losses, as well as a lower operating investment result. Operating profit from our Life/Health business segment was resilient and decreased mostly due to a favorable one-off profit in 2019. Our Asset Management business segment recorded a solid albeit lower operating profit mainly driven by lower performance fees. Net income attributable to shareholders decreased 28.6 percent to 1.5 (2.1) billion euros in the second quarter of 2020 largely mirroring the development of operating profit.
Basic Earnings per Share (EPS) decreased 27.6 percent to 7.07 (9.76) euros in the first half-year of 2020. Annualized Return on Equity (RoE) amounted to 10.0 percent (full year 2019: 13.6 percent). The Solvency II capitalization ratio was at 187 percent at the end of the second quarter of 20201, compared to 190 percent at the end of the first quarter 2020.
In the first half-year of 2020, total revenues were stable. Operating profit fell by 20.5 percent to 4.9 (6.1) billion euros, with COVID-19 having a significant negative impact on our insurance businesses’ operating profit. Property-Casualty recorded a lower underwriting and operating investment result. Our Life/Health business operating profit decreased due to a favorable one-off profit in 2019 and a lower investment margin. Higher AuM-driven revenues led to an increase in operating profit from our Asset Management business. The decrease in net income attributable to shareholders was largely driven by the drop in operating profit.
“The pandemic continues to be a challenge for all industries. Nevertheless, Allianz has achieved robust results and shown a remarkable resilience in the first six months of 2020. It makes us confident that we will see a solid financial performance also in the second half of 2020,” said Oliver Bäte, Chief Executive Officer of Allianz SE.
1 Including the application of transitional measures for technical provisions, the Solvency II capitalization ratio amounted to 217 percent.