Allianz profits drop as investors withdraw funds
German insurance giant Allianz said Friday its profits fell in the second quarter, while it saw clients withdraw their funds from its troubled asset management operations.
Between April and June, Allianz booked a net profit of 1.7 billion euros ($1.7 billion), down 23.3 percent on the same period last year.
The setback came despite revenues climbing by 8.2 percent to 37.1 billion euros, with progress seen in all areas bar asset management.
In this division, revenues stagnated, up only 0.8 percent on a year in the second quarter to two billion euros.
Allianz’s asset management unit has been rocked by legal troubles in the United States, where investors have filed a complaint over heavy losses suffered during the coronavirus pandemic.
The Munich-based firm has set aside almost six billion euros since the beginning of the year to cover the costs of the lawsuits and compensate investors.
The assets managed by Allianz on behalf of third parties fell by around six percent to 1.8 trillion euros between the first and second quarters, due to “strong market effect and net outflows”.
Clients withdrew 5.1 billion euros of their assets from Allianz Global Investors, the unit at the centre of the legal woes, and a further 28.7 billion euros from American subsidiary Pimco.
“We are well-positioned to manage the impact of high inflation and the economic pressures that are particularly evident in Europe,” Allianz CEO Oliver Baete said in a statement, highlighting the group’s core insurance business.
The property-casualty division’s operating — or underlying — profit climbed by 21 percent year-on-year to 1.6 billion euros in the second quarter.