Allianz profits beat forecasts despite Pimco troubles
Allianz Group has reported solid growth for the second quarter of 2014, despite ongoing challenges at Allianz’s US investment firm Pimco.
The group reported a 10 percent increase of total quarterly revenues to €29.46bn. It attributed a large section of profits to the segment property and casualty insurance, which contributed roughly half of Allianz Group’s operating profit in the second quarter. This was partly because the impact of natural catastrophes was lower compared to the second quarter of 2013. Gross premiums written in property and insurance reached €10.85bn.
Key challenge for Allianz remains the asset management segment, as investors continued to withdraw funds from Pimco due to weak performance of Pimco’s flagship total return fund and the public fallout between Bill Gross and Mohammed El-Erian. Investors are also positioning themselves for a rise in interest rates in the US. Consequently, asset management revenues declined by 11.5% to €1.82bn for the second quarter.
However, Dieter Wemmer, CFO of Allianz SE also highlighted that outflows at Pimco continues 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” he said.
With overall group overating profits climing to €2.77bn, Allianz confirmed its operating profit outlook of €10bn for 2014.