Allianz Stock Analysis: Insurance #1 and German Popular Participation

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Allianz (ETR:) SE Stock and Stock Analysis

  • Allianz is the number one insurance company in Germany and number two in the world. In terms of total assets, Allianz is the largest insurance company in Germany and the second largest in the world. For decades, Allianz has made a name for itself as the most popular insurance company. Allianz only focuses on the areas that it truly understands 100% and is very successful with this strategy.
  • People love insurance because it takes away our fear of the unknown. They insure us against any risk and seem affordable compared to the insured risk. There are many dangers in our life that can cause financial ruin. Very few people or companies want to take such risks. That’s why there is insurance. So the insurance companies make money off of the fear of the masses. The Alliance sells people freedom and is there when you need it.
  • Allianz has a dividend yield of over 6%. There is still a lot of financial leeway in the insurance industry when it comes to valuations. Allianz is one of the cheapest shares on the market with 9.5 times earnings. The dividend has not been reduced in 13 years. The payout ratio of around 50% still offers plenty of room for higher dividend payouts. They are also buying back shares on a large scale.
  • Solid business figures. The alliance is growing slowly but steadily. Sales are regular and highly diversified. Therefore, profits have not plummeted, even in times of crisis. Allianz has become a kind of global ETF.

Allianz share price

Stock chart, Allianz

allianz business model

Company history: tradition meets global and digital

Allianz is a German insurance company with a global presence. With more than 155,000 employees in more than 70 countries, it works every day for 100 million satisfied customers and tries to make the world a little safer. It is the market leader in many areas and has a very strong brand. Not surprisingly, almost everyone knows the saying: I hope Allianz is insured.

1890 The alliance is formed. Carl Thieme and Wilhelm Finck founded the company in Berlin with a common mission: security for a world where everything is changing and accelerating. Both had already founded Munich Re 10 years earlier.

1949 Restart of the alliance after many crises. The alliance had to survive some crises and is practically bankrupt after world wars and hyperinflation. Due to the nationalization of insurance companies in the GDR, Allianz decides to move its headquarters to Munich.

1958 Hopefully Allianz is insured. Humor in advertising leads to notoriety. Funny caricatures on matchboxes make Allianz known. The slogan has a lasting effect and is still associated with Allianz today. Auto insurance premium income knows no bounds. More than half of premium income comes from this area.

2001 9/11 triggers the largest lawsuit in business history. The 9/11 terrorist attacks cost insurers and reinsurers more than $58 billion, a record. Allianz is facing the largest debt payments in history.

2009 Alliance strengthened after the global economic crisis. Despite the bankruptcy of the investment bank Lehman Brothers and the resulting global economic crisis, Allianz was able to maintain its international rating at the pre-crisis level and came out stronger.

This day Allianz Global and Digital. Allianz is now one of the largest insurance groups in the world and is known throughout the world. Digital transformation is in full swing. In 132 years of experience, Allianz has become a true insurance champion that understands its business and its clients.

Mission: Secure the future

We secure your future— Allianz

Allianz’s mission is to provide its customers with security and confidence in their future. A fair and trustworthy partner for the protection and growth of clients’ most valuable assets and health. In addition, Allianz offers modern insurance solutions for companies and individuals throughout the insurance sector. Sustainable and compelling.

To achieve the goal, the alliance focuses on the following three promises:

  1. balance between stakeholders
  2. Achieve benchmark results at scale
  3. High resilience (resistance) in a rapidly changing world
key factors

Allianz share key figures

AAQS: Unable to determine AlleAktien Quality Score for Allianz

Allianz is a financial group, which means that the company has a different balance sheet structure than many companies in traditional economic sectors. Therefore, the AlleAktien quality score concept at Allianz does not make sense. However, one can see some things directly at Allianz: Earnings are a bit more cyclical than many other companies, and sales development is moderate.

AAQS Alliance

Allianz Stock Summary: A Big Dividend Investment in the World’s No. 1 Insurer

industry. Allianz is actively involved in the insurance industry. It is the world market leader in many areas. From life insurance to commercial credit. Insurance companies make money on the fears of people and companies. This allows Allianz to generate more consistent profits, as contracts are often agreed for decades. The growth of the insurance industry is quite low, 4% per year. However, there are some future trends that could help the market gain momentum.

Business model/strategy. Allianz has a very complex corporate structure where it is easy to lose your way. Allianz is active in many segments of the insurance industry. The core business is health and life insurance, property and casualty insurance, and asset management business. Sales are mainly generated by the insurance divisions. When it comes to operating income, the situation is different. Here the distribution is uniform among the three divisions. Allianz’s strategy is above all to be the market leader in its fields of activity. In addition, a long-term transformation will take place that will focus on trends such as climate change and digitalization.

Valuation. Allianz has a price-to-sales multiple of 0.47 and a price-to-earnings ratio of 9.5. This makes it slightly cheaper than the historical average. In the AlleAktien DCF and FMV model, it achieves expected returns of 14% and 9% per year, respectively.

Opportunity #1. One of the biggest opportunities for Allianz is the growing markets of North America and emerging markets like China. A new middle class is brewing here, which until now has not insured many risks. There is also great market potential. With further growth in these markets, Allianz could continue to grow for many years to come.

Risk #1. The biggest risk for Allianz is natural disasters, terrorist attacks and cyber attacks, which cause great damage. That risk is followed by a drop in earnings that reduces dividends. The wide diversification and the solid financial situation ensure that the risk does not turn into danger.

Perspective / type of investor. I think Allianz shares are worth buying with an expected return of 14%. Allianz is a good choice for dividend investors looking for quality, reliable German stocks. Due to long-term growth engines, here is an exciting opportunity to receive ever-increasing distributions for years to come.

Sincere greetings,
Michael C. Jacob
All founding shares and CEOs

Michael C. Jacob

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Transparency Notice and Disclaimer: The authors have created this article to the best of their knowledge, but cannot guarantee the accuracy of the data provided. No investment advice from AlleAktien or the authors who work for AlleAktien. This article is a journalistic publication and is for informational purposes only. The information does not constitute an invitation to buy or sell any security. The purchase of shares involves high risks, including total loss. You can only make your investment decisions based on your own research and not on information provided by AlleAktien. AlleAktien and the authors working for AlleAktien do not accept any responsibility for any consequences or losses arising from the use of our information. The author currently owns Allianz shares.

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