German insurance company Allianz on Friday posted a 23% fall in second-quarter net profit

German insurance company Allianz

German insurance company Allianz on Friday posted a 23% fall in second-quarter net profit.

German insurer Allianz on Friday posted a worse-than-expected 23% fall in second-quarter net profit, dampened by volatile markets and restructuring costs, but confirmed its target for the year. 

Despite the drop in profit, the quarter marks a return to business as usual for Allianz. Also Read, About Gold Line Company seller of gold and silver coins

The insurer had in recent months been dogged by a fraud case at its U.S. funds unit that resulted in a $6 billion settlement with U.S. authorities in May. 

The matter has cast a shadow over Allianz, one of Germany’s most valuable companies, and while the bulk of the costs associated with the case is behind it, the issue still left its mark in the second quarter as Allianz booked restructuring expenses of more than 100 million euros to wind down its U.S. funds unit AGI, which was at the center of the troubles. 

German insurance company Allianz
German insurance company Allianz

German insurance company Allianz

Net profit attributable to shareholders of 1.706 billion euros ($1.75 billion) in the quarter to June 30 missed a consensus forecast of 1.846 billion and was down from 2.225 billion a year earlier. Also Read, WWE News Latest Summer Slam 2022 results

But the company said that the insurer’s target of 2022 operating profit between 12.4 billion and 14.4 billion euros remains intact. “We are well-positioned to manage the impact of high inflation and the economic pressures that are particularly evident in Europe,” Chief Executive Officer Oliver Baete said. 

Volatile markets took a toll on Allianz in the quarter, prompting it to take a 282 million euro impairment charge and also contributing to a 12% drop in operating profit at its life and health division. 

Analysts with Jefferies, which rate Allianz a “buy,” noted that the non-operating losses and corporate costs “were far higher than expected” and called the results a “mixed beat.” 

Allianz is a German multinational financial services company headquartered in Munich, Germany. 

Its core businesses are insurance and asset management. 

As of 2014, it is the world’s largest insurance company, the largest financial services group, and the largest company according to a composite measure by Forbes magazine, as well as the largest financial services company measured by 2013 revenue. 

The company is a component of the Euro Stoxx 50 stock market index. 

Its asset management division, which consists of PIMCO, Allianz Global Investors, and Allianz Real Estate, has EUR2,432 billion under management (AuM), of which EUR1,775 billion are third-party assets (Q1 2021). Allianz sold Dresdner Bank to Commerzbank in November 2008.

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