Allianz operating profit beats estimates on strong growth
The gains help keep Allianz on track to meet its full-year earnings targets.
(Bloomberg) – Allianz SE said strong growth across its businesses lifted second-quarter profit as Europe’s largest insurer keeps the market waiting on any acquisitions it will undertake.
The gains help keep Allianz on track to meet its full-year earnings targets, Europe’s biggest insurer said in a statement on Friday. Assets under management and margins grew at the Munich-based owner of Pacific Investment Management and Allianz Global Investors.
On track to meet 3-year growth target
Chief Executive Officer Oliver Baete said in the statement that he’s “confident” the firm will meet its three-year growth target.
Group operating profit grew to 3 billion euros ($3.5 billion), while net income fell 5.2% to 1.9 billion euros following the sale of a life portfolio in Taiwan. Allianz is targeting full-year operating profit of 11.1 billion euros plus or minus 500 million euros.
While U.S. hurricanes and wildfires led to record payouts for insurers last year, the disasters prompted more customers to buy policies, lifting premium prices after several years of stagnation. Despite having large investment units in the U.S. and Europe, Allianz still gets the majority of its income from insurance.
Potential acquisition targets
Allianz is exploring a number of potential acquisition targets as deal-hungry Chief Executive Officer Oliver Baete scans the market for growth. Bloomberg reported in June that potential targets range from Switzerland’s Zurich Insurance Group AG and the U.K.’s RSA Insurance Group Plc to Hartford Financial Services Group Inc. in the U.S. or, going further afield, assets in China.
Operating profit at the asset-management unit, which comprises Pimco and AGI, increased by 11.6% in the second quarter. External managers decreased their allocation by 9.2 billion euros to the firm, while assets reached 1.46 trillion euros.
Pimco had third-party net outflows of 7.9 billion euros, mainly from one large institutional mandate, and AGI 1.3 billion euros, in part from fixed income and equity strategies. But currency effects boosted third-party assets by 53.8 billion euros and total assets reached a record for the company.
Related: Allianz raises its dividend, shrugging off hurricane claims