Allianz's Strategic Momentum and Resilient Profitability in H1 2025: A Case for Long-Term Equity Investment

In an era of macroeconomic turbulence, where inflationary pressures, geopolitical tensions, and energy transitions test the mettle of even the most seasoned corporations, Allianz SE has emerged as a beacon of disciplined growth and operational resilience. The German insurer's first-half 2025 results underscore a compelling narrative: a company leveraging its diversified business model, strategic capital allocation, and underwriting discipline to outperform expectations while rewarding shareholders. For investors seeking stability amid uncertainty, Allianz offers a rare combination of profitability, growth, and long-term value creation.

Resilient Profitability: A Foundation for Confidence

Allianz's operating profit in H1 2025 surged to €8.6 billion, a 9.3% year-over-year increase, with the first half alone accounting for 54% of its full-year 2024 profit. This performance was driven by robust contributions across all segments. The Property & Casualty (P&C) division, a cornerstone of Allianz's operations, reported a record €4.5 billion in operating profit for the first half, a 12% rise, despite elevated natural catastrophe losses in Germany. Its combined ratio of 91.2% in Q2 2025—down from 93.5% in Q2 2024—reflects improved underwriting efficiency, with a loss ratio of 67.4% and expense ratio of 23.9%.

The Life & Health (L&H) segment also delivered strong results, with operating profit of €2.8 billion in H1 2025, a 4.6% increase. Notably, the segment's new business margin of 5.6% exceeded its 5% target, driven by a 92% concentration of new business in preferred lines. Meanwhile, the Asset Management (AM) segment, though smaller, demonstrated steady growth, with operating profit rising 4.8% year-to-date to €1.6 billion, supported by €42 billion in third-party net inflows and a 7% year-over-year increase in assets under management (AUM) to €1.896 trillion.

Strategic Expansion: Strengthening Core Markets

Allianz's expansion in its core insurance segments has been both organic and strategic. In P&C, internal growth of 7.9% in H1 2025—despite a challenging claims environment—highlights the company's ability to balance risk and reward. The retail and commercial lines, with combined ratios of 91.8% and 90.3% respectively, demonstrate精细化的定价和承保纪律。 Meanwhile, the L&H segment's 10.9% year-over-year growth in present value of new business premiums (PVNBP) to €45.6 billion underscores its appeal in a world increasingly prioritizing health and longevity risk management.

The insurer's global footprint further amplifies its resilience. While European markets remain central, Allianz's operations in Asia, North America, and Latin America have shown consistent growth, mitigating regional economic shocks. For instance, its Life & Health business in Asia-Pacific grew by 14% in H1 2025, driven by demand for annuities and health coverage in aging populations.

Capital Return Initiatives: Rewarding Shareholders with Discipline

Allianz's capital management policy, updated in December 2024, has positioned it as a top dividend payer in the DAX. The company's 2025 dividend of €15.40 per share—a 11.6% increase—reflects its commitment to returning capital to shareholders while maintaining a 60% payout ratio of adjusted net income. This dividend, approved at the May 2025 Annual General Meeting, builds on a decade of 8% average annual growth, reinforcing its appeal to income-focused investors.

Beyond dividends, Allianz has launched a €2 billion share buyback program, with €1 billion executed in H1 2025. This initiative, coupled with a Solvency II capitalization ratio of 209%, ensures that the company can sustain returns without compromising its financial strength. The buybacks also signal management's confidence in the stock's intrinsic value, particularly as the market discounts its long-term growth potential.

A Case for Long-Term Investment

Allianz's strategic momentum is underpinned by three pillars: profitability resilience, segmental expansion, and capital discipline. Its ability to generate a core return on equity (RoE) of 18.5% in H1 2025—up from 16.9% in 2024—demonstrates its capacity to create value even in a low-growth environment. Meanwhile, its updated capital management policy ensures that shareholders benefit from both dividends and buybacks, with a minimum of 15% of net income allocated to additional returns through 2027.

For investors, the case for Allianz is clear. The insurer's diversified business model insulates it from sector-specific downturns, while its focus on risk-optimized underwriting and digital transformation positions it to capitalize on long-term trends such as climate risk management and longevity. In a world where macroeconomic uncertainty is the new normal, Allianz offers a rare combination of stability, growth, and shareholder-centric governance.

Conclusion

Allianz's H1 2025 results are more than a quarterly triumph—they are a testament to the company's strategic foresight and operational excellence. As it navigates a complex global landscape, its disciplined approach to capital allocation, underwriting, and innovation ensures that it remains a leader in the insurance sector. For long-term investors, the insurer's combination of resilient profitability, strategic expansion, and shareholder returns makes it a compelling addition to a diversified portfolio, particularly in an era where certainty is scarce.