We Increase Our Fair Value Estimate as Allianz Beats on; Shares Undervalued

After we analysed the Aug. 5 results for Allianz, we raise our fair value estimate to EUR 230 per share as the company continues to beat on. The performance of Allianz property and casualty has been stellar year to date, delivering double-digit top-line growth even after currency effects. Further, the underwriting quality delivered far exceeded our expectations with a 94.1% combined ratio in the business unit overall. Allianz has used travel disruption as an opportunity to grow Allianz partners significantly and Allianz global corporate and specialty is benefiting from rate increases in the broader market. We have raised our outlook for gross written premium in this division this year before dropping back to longer-term and more subdued levels. Our long-term estimate is for a combined ratio of around 95.4% and we stand marginally below that for the full year at 95.1%.