Allianz asset management profits fall

The asset management arm of insurer Allianz has seen a 16 percent fall in profit for the second quarter of 2014.

The segment, which includes Allianz Global Investors and Pimco, posted an 11.5 percent decline in operating revenues to €1.6 billion in the quarter. Its profits fell to €675 million for the quarter, a decrease of 16 percent.

Despite the decline in profits and revenues, Allianz’s total revenues rose to €29.5 billion in Q2; an increase of 10 percent. In the first half of the year, Allianz reported a 7.8 percent rise to €63.4 billion in total revenues, which is the highest in the company’s history.

Its profit climbed 17.1 percent to €2.8 billion for the quarter, compared with €2.4 billion in the second quarter of 2013.

Within the property and casualty arm, profits grew 14.2 percent to €1.4 billion, compared with €1.2 billion in the second quarter of 2013. Its combined ratio improved by 1.4 percentage points to 94.6 percent, compared with 96 percent in the prior year quarter.

“The market environment continues to present challenges for customers and financial service providers. Our well-diversified business model as well as new solutions for customers enabled us to achieve already 55 percent of the midpoint of the outlook range in the first six months of 2014,” said Michael Diekmann, chairman of the board of management of Allianz SE.

“In view of these good half-year results, we maintain our outlook for the operating profit for 2014 of 10 billion euros, plus or minus 500 million euros, but expect the upper end of the target range to be in reach. As always, this forecast is under the caveat that natural catastrophes and capital market turbulence do not exceed expected levels.”

Asset management performed within expectations. With €3.2 billion, Allianz Global Investors recorded the highest quarterly third-party net inflows of its history, while outflows at PIMCO continued to slow. The key for future results is the investment performance, which is at a very high level: 89 percent of PIMCO’s assets under management outperformed their benchmarks on a three-year basis.”