Europe’s biggest insurer Allianz said it would post operating profit at the top of its target range this year, as low damage claims and gains from asset sales helped offset the lingering pain of investor outflows at asset manager Pimco.
Allianz predicted it would achieve operating earnings of €10.8 billion in 2015, compared with a previous goal of €10.4 billion, plus or minus €400 million depending on claims and financial market developments.
“Despite negative one-offs, we have achieved an excellent performance,” Allianz chief executive Oliver Baete, who took over the insurer’s helm in May from long-serving predecessor Michael Diekmann, said yesterday.
The quarterly results showed that Baete, who plans to complete a review of the group’s strategy by the end of the year, still has much to do.
Operating profit at its main money spinner of property and casualty insurance rose 30 per cent in the second quarter, helped by low damage claims and a €200 million gain booked on the sale of US unit Fireman’s Fund to insurer ACE Ltd.
But Allianz’s asset management business continued to suffer, with quarterly operating profit falling by a quarter as third-party investors pulled a further €29.3 billion in funds from Pacific Investment Management Company (Pimco).
US-based Pimco, which contributes more than a fifth of the German insurer’s operating profit, saw record outflows and management turmoil last year, including the acrimonious departure of its leader Bill Gross, known as the “Bond King”.
DZ Bank analyst Thorsten Wenzel described the quarterly results as a mixed bag.
“Operating profit remained slightly below expectations and net outflows in asset management are still on a high level,” Wenzel said in a note to clients. “On the positive side, net profit is clearly above expectations, economic solvency at a strong level and the guidance was slightly adjusted upwards.”
Quarterly net profit was €2.02 billion, compared with an average estimate of €1.78 billion in a Reuters poll of banks and brokerages and €1.76 billion in the year-earlier quarter.