Economy Allianz profit hit by damage claims, Pimco outflows slow

Allianz profit hit by damage claims, Pimco outflows slow

The logo of Europe's biggest insurer Allianz SE is pictured at their headquarters in Unterfoehring, near Munich.
The logo of Europe’s biggest insurer Allianz SE is pictured at their headquarters in Unterfoehring, near Munich.

German insurer Allianz’s net profit fell by half in the second quarter, hit by higher damage claims, the sale its South Korean business and weaker investment performance.

The owner of Pimco said on Friday that outflows at the bond manager had slowed, but there was still work to do at the unit.

Quarterly net profit was 1.1 billion euros (928 million pounds), compared with an average forecast of 1.53 billion euros in a Reuters poll and 2.0 billion in the year-earlier quarter, which was favored by realized gains on equity and debt investments.

Allianz shares were indicated to open 2 percent lower.

Europe’s largest insurer took a 352 million euro hit to net profit from the expected sale of its businesses in South Korea, which was performing below Allianz’s target.

Nevertheless, Allianz confirmed it would reach its target operating profit of 10.5 billion euros this year, plus or minus 500 million euros, with the range reflecting uncertainty about natural catastrophe and financial market developments.

Group operating profit fell 17 percent to 2.4 billion euros in the second quarter, with revenue down 2.5 percent.

Like other insurers, Allianz’s property and casualty business was hit hard by European floods and storms in the second quarter, contributing to a 37 percent drop in operating profit drop in that business.

Operating profit fell slightly in asset management, where Allianz is struggling to stem investor withdrawals and bring down costs at bond manager Pimco.

“Net outflows at Pimco have slowed, but we have not yet reached our goals,” Allianz Chief Executive Oliver Baete said in a statement.

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