Allianz profits jump despite Eurozone fears
GERMAN insurance giant Allianz yesterday reported a 40 per cent jump in operating profit to €2.3bn (£1.8bn) for the first quarter, but warned that its financial health depended on a successful outcome to the Eurozone crisis.
“We expect further shocks before the situation finally calms down and therefore we remain very cautious,” explained finance chief Oliver Baete. “As a company with total assets of over €600bn, we hang on the markets.”
He also said that a Greek exit from the single currency “would have terrible consequences for Greece and must be avoided at all costs” before adding he is “very concerned” about the recapitalisation of the Spanish banking sector.
Overall group revenue rose just 0.5 per cent but the firm confirmed that it remains on course to hit its target operating profit of €7.7bn–€8.7bn for the year.
Its property and casualty insurance recorded a 79 per cent increase in profits to €1.2bn, mainly due to a break from the disasters that hit the industry during 2011.
Damage claims from natural catastrophes were just €42m, down from €737m for the same period last year when there were devastating earthquakes in Japan and New Zealand.
Operating profit in life and health insurance rose 18 per cent as improving investment income offset a fall in revenue, while profit from asset management rose 16 per cent.
Allianz also revealed it has taken a €77m hit on its stake in Spain’s Banco Popular but said it would continue to work with the bank.
Shares in Allianz closed yesterday down 0.7 per cent at €76.59.