Europe’s biggest insurer has confirmed its full-year earnings forecast as a result of low damage claims and gains from asset sales. But investors were unimpressed, pegging the stock lower.
German insurer Allianz announced Friday it would post operating profit at the top of its target range this year, with earnings predicted to reach 10.8 billion euros ($11.7 billion), compared with a previous goal of 10.4 billion.
The result was plus or minus 400 million euros depending on claims and financial market developments, Allianz Chief Executive Bäte told investors during a conference call.
“Despite negative one-offs, we have achieved an excellent performance,” said Bäte, who took over the insurer’s helm in May from long-serving predecessor Michael Diekmann.
In early trading at the Frankfurt Stock Exchange on Friday, shares in Europe’s biggest insurer eased, however, dropping 1.6 percent to about 153 euros.
Analysts said investors had decided to take their profits now on the stock, which had gained 15 per cent since bottoming out at 136 euros last month.
German news agency DPA quoted an unnamed trader as saying the insurer’s second-quarter result presented Thursday was “mixed and hard to interpret.”
Apart from a major decline in major claims, Allianz earnings between April and June were mainly helped by completing the sale of US personal insurer Fireman’s Fund to ACE.
Asset managers underperform
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 euros in funds from the insurer’s asset management unit, Pacific Investment Management Company (Pimco).
US-based Pimco, which contributes more than a fifth of Allianz’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 said net outflows in asset management were still on “a high level.”
“On the positive side, net profit is clearly above expectations, economic solvency at a strong level and the guidance was slightly adjusted upwards,” he said in a note to clients.
Quarterly net profit was 2.02 billion euros, compared with an average estimate of 1.78 billion in a Reuters poll of banks and brokerages and 1.76 billion in the same quarter a year ago.
uhe/jd (dpa, Reuters)