Allianz SE (ALV), Europe’s largest insurer, posted second-quarter profit that beat analyst estimates after higher earnings at its non-life and asset management units.
Net income rose 27 percent to 1.59 billion euros ($2.1 billion) from a year earlier, the Munich-based company said in a statement today. That compared with the 1.33 billion-euro average estimate of 12 analysts surveyed by Bloomberg.
Allianz, which was one of nine insurers designated systemically important by global financial rule makers last month, confirmed a target for operating profit of 8.7 billion euros to 9.7 billion euros this year compared with the 9.5 billion euros reported for 2012. The company said the upper end of that target range was “in reach” after reporting profit by that measure of 5.16 billion euros in the first half.
“The guidance is conservative as the fourth quarter is seasonally their best one, so everybody is expecting them to beat their own target range,” said Peter Eliot, a London-based analyst at Berenberg Bank with a buy recommendation on the stock.
Allianz shares rose 1.4 percent to 120.40 euros at 11:14 a.m. in Frankfurt. The stock has gained 15 percent this year, valuing the company at 55 billion euros. That compares with an 18 percent increase for the 30-company Bloomberg Europe 500 Insurance Index.
“Although we faced record floods in Central Europe, persistent low interest rates and erratic capital markets, our business continued to grow profitably,” Chief Executive Officer Michael Diekmann said in the statement.
The June floods in Central Europe cut earnings by about 330 million euros, Allianz said. The insurer expects losses of about 200 million euros from a hailstorm that hit parts of Germany at the end of July, it said in the quarterly report filed on its website.
The flooding in May and June was “by far” the most expensive natural catastrophe in the first half and resulted in insured losses of more than 3 billion euros, according to estimates by Munich Re, the world’s biggest reinsurer. Total insured losses of about $13 billion for the first six months of the year remained below the 10-year average of $22 billion, according to the reinsurer.
Net income at Allianz’s property and casualty insurance unit rose 23 percent to 1 billion euros from a year earlier, while profit at the asset management division advanced 41 percent to 488 million euros.
The asset-management unit, which includes Newport Beach, California-based Pacific Investment Management Co., increased its managed assets by 6.6 percent to 1.86 trillion euros in the quarter.
Pimco, the world’s largest active fixed-income manager, had a record $14.5 billion in net redemptions in June across its U.S. mutual funds. The last time Pimco’s U.S. mutual funds had net withdrawals was in December 2011, according to Chicago-based research firm Morningstar Inc. (MORN), which provided the June estimate. The redemption was Pimco’s highest since Morningstar started estimating the monthly flows in February 1993.
“Our Asset Management business has frequently demonstrated its ability to handle changing situations,” Dieter Wemmer, the company’s chief financial officer, said in the statement. “With these good results, the segment shows why it is an important pillar of our diversified business model.”
Allianz’s second quarter profit was boosted by non-operating earnings of 132 million euros after lower impairments and higher realized gains reversed a year-earlier loss of 151 million euros, the insurer said.
Axa SA (CS), Europe’s second-largest insurer, today reported a 3 percent decline in first-half net income on costs from floods in Germany and interest-rate hedging. Assicurazioni Generali SpA (UCG), Italy’s biggest insurer, yesterday reported a 74 percent rise in second-quarter profit to 478 million euros as higher non-life earnings outweighed a drop at its life business.
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