(Bloomberg) -- Allianz SE said second-quarter profit almost halved, missing estimates, as Europe’s biggest insurer faced higher claims from natural disasters and charges for the expected sale of its South Korea unit.
Net income declined to 1.1 billion euros ($1.2 billion) from 2.02 billion euros a year earlier, the Munich-based company said in a statement on Friday. That compares with the 1.55 billion-euro average of 12 estimates compiled by Bloomberg. Allianz confirmed its target for full-year operating profit of 10 billion euros to 11 billion euros compared with 10.7 billion euros in 2015.
Insurers in Europe are under pressure as low interest rates crimp investment returns, which typically provide a buffer for earnings when claims rise or prices for coverage decline. The industry is also grappling with stricter regulatory capital requirements and subdued prices in some markets. Chief Executive Officer Oliver Baete seeks to achieve annual growth per share growth of 5 percent on average over the next three years and an adjusted return on equity of 13 percent by 2018.
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