Allianz latest to feel effect of disasters

NATURAL disasters in Japan and New Zealand caused a 43 per cent profit slump at Europe’s biggest insurer Allianz in the first-quarter of 2011, it said yesterday.

The German insurance giant saw net profit slump to €915m (£800m) from €1.6bn in the first-quarter of 2010 and pre-tax profit fell 25 per cent to €1.5bn, as it bore heavy losses from the Japanese earthquake and tsunami.

The fall came despite revenues sticking at record levels, down just two per cent to €29.9bn from its all time high of €30.6bn in the previous quarter. Allianz stuck to its target of €8bn operating profit this year, plus or minus €500m. Analysts expect €8.3bn operating profit.

“The past quarter took one of the hardest hits from natural catastrophes of any quarter in the last two decades,” chief financial officer Oliver Bäte said in the interim management statement.

Allianz said it would take a €737m loss from catastrophes in the quarter, of which €320m was from Japan.

Operating profit in its property and casualty division fell 6.9 per cent on 2010, to €663m in the quarter. Espirito Santo analyst Joy Ferneyhough said its two per cent premium rate rise was lower than peers due to its “heavy weighting to disappointing markets such as Germany and Switzerland.”

Life and health insurance was hit by low investment returns and the strength of the euro, Allianz said, pushing operating profit down by 16 per cent to €702m.

But its asset management arm saw fee and commission income grow 15 per cent to €1.26bn, and operating profit rise 13 per cent. Allianz’s shares fell 1.4 per cent to €100.2 yesterday.