Insurer's CEO calls the results solid, despite a challenging environment.
Allianz Life Insurance, which said it made key investments during the year to strengthen its "financial and competitive position," reported that net operating profits dropped 9 percent to $428 million in 2011.
The Golden Valley-based company largely sells fixed-rate and variable annuity products that have been dogged by low rates as the Federal Reserve has flooded the economy with money to keep rates low, revive the economy and Wall Street, and help big banks recover from real estate-related losses.
In an interview, Allianz Life CEO Walter White said the company's strategy is sound because fixed-interest products increasingly resonate with baby boomers who want to put money into products that pay a guaranteed stream of income, and which can also help cover long-term care and other expenses in retirement without having to worry about stock market volatility.
"Allianz Life strengthened our financial and competitive position, while protecting and growing Americans' retirement savings," White said. "We posted solid results in 2011 in terms of sales, operating profit and capital strength despite a challenging market environment. We saw strong demand for our core products in the fourth quarter."
Allianz Life, which employs an expanding workforce of 2,100, said total premiums (new sales and recurring premiums) of $10.8 billion in 2011 were unchanged from 2010, with fixed-annuity sales declining 8 percent, to $6.5 billion, and variable-annuity sales increasing 19 percent, to $3.8 billion in premiums.
Assets under management increased 9 percent to $95.3 billion during the year.
White said Allianz Life, one of the biggest sellers of fixed-income annuities in America, is encouraged by surveys that show that baby boomers are tired of stock market volatility and are willing to invest more of their savings into guaranteed-income products.
Allianz Life sells through independent agents and operates from two buildings that it has constructed over the last decade in Golden Valley. It is part of Germany's Allianz SE group that also includes Fireman's Fund and Pacific Investment Management Co. (PIMCO), one of the world's biggest fixed-income managers.
Neal St. Anthony • 612-673-7144