Allianz Beats Q2 Profit Estimates with Help of PIMCO Bond Fund Unit

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Allianz SE said strong growth across its businesses lifted second-quarter profit as Europe’s largest insurer keeps the market waiting on any acquisitions it will undertake.

The gains help keep Allianz on track to meet its full-year earnings targets, Europe’s biggest insurer said in a statement on Friday. Assets under management and margins grew at the Munich-based owner of Pacific Investment Management and Allianz Global Investors.
Chief Executive Officer Oliver Baete said he was confident that the company would achieve its three-year growth target.

The Group’s operating profit increased by 3 billion euros ($ 3.5 billion), while net income declined by 5.2% to 1.9 billion euros following the sale of a life portfolio in Taiwan. Allianz is aiming for a full annual operating profit of 11.1 billion euros plus or minus 500 euros.

Although US hurricanes and forest fires paid a record for insurers last year, disasters demanded more customers to buy policies to lift premium prices after a few years of stagnation. Although there are large investment units in the US and Europe, Allianz still receives the majority of the income from insurance.

Allianz is investigating a number of potential acquisition targets while Chief Executive Officer Oliver Baete, who is open to negotiations, is scanning the market for growth. Bloomberg reported that in June it was among potential targets from Switzerland’s Zurich Insurance Group AG and from RSA Insurance Group Plc in the UK to Hartford Financial Services Group Inc. in the US or later to assets in China.

Operating profit in the asset management unit, which consists of Pimco and AGI, increased by 11.6 percent in the second quarter. Foreign managers reduced the allocation by 9.2 billion euros, while assets reached 1.46 trillion euros.

PIMCO had third-party net outflows of € 7.9 billion from AGI, which is partly comprised of fixed income and capital strategies, a large corporate task and net € 1.3 billion. However, currency effects increased third-party assets by € 53.8 billion and total assets reached record levels for the company.

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