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Despite the drop in profit, the quarter marks a return to business as usual for Allianz. 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 are 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 centre of the troubles.
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.
But the insurer’s target of 2022 operating profit between 12.4 billion and 14.4 billion euros remains intact, the company said.
“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”.
($1 = 0.9774 euros)
