(Bloomberg) -- Allianz SE, Europe’s biggest insurer, saidthird-quarter profit dropped 15% as earnings at its property andcasualty and asset management units declined.

|

Net income fell to 1.36 billion euros ($1.48 billion) from 1.61billion euros a year earlier, the Munich-based company said in astatement on Friday. That missed the 1.52 billion-euro average ofnine analyst estimates compiled by Bloomberg.

|

European insurers are generating less revenue amid pricingpressure and low interest rates while claims from naturalcatastrophes and over the mid-August explosions in the Chinese cityof Tianjin have dented earnings across the industry. The Germancompany’s two investment businesses have also seen upheaval afterthe departure of Bill Gross from the company’s Pimco unit inSeptember last year and a change at the top of the Allianz GlobalInvestors unit last month.

|

The company’s performance in the quarter “will inevitably temperthe excitement building ahead of its investor day” this month,Barclays Plc analysts Andy Broadfield and Aayushi Pabari wrote inan e-mailed report. They have an underweight rating on thestock.

|

Falling shares

|

Allianz was down 2.4% at 155.30 euros at 11:32 a.m. in Frankfurttrading, the biggest decline in more than six weeks. The shareshave risen about 13% this year, giving the company a market valueof about 71 billion euros, while the Bloomberg Europe 500 InsuranceIndex has added 11%.

|

Allianz confirmed its forecast for 2015 operating profit, sayingit will probably be at the upper end of its range of between 10billion euros and 10.8 billion euros.

|

“We’re actually very proud to have achieved this result becausethe main impact of the numbers comes from the volatility in thefinancial market,” Chief Financial Officer Dieter Wemmer said in aninterview with Bloomberg Television. “In asset management, we aredropping since quite some time, I think you all remember the Pimcooutflows, but here we also see the first green shoots.”

|

Operating profit at all three of the company’s operating unitsfell in the quarter. The biggest decline was in asset management,where earnings dropped 14% to 600 million euros due tooutflows, according to the insurer’s filings.

|

Allianz said third-party net outflows from the unit slowed to14.8 billion euros in the quarter from 47.4 billion euros a yearearlier. Pimco had net outflows of 16 billion euros while AllianzGlobal Investors recorded 1.3 billion euros of net inflows.

|

Natural catastrophes

|

Operating profit from the property and casualty division, thecompany’s largest business, fell 5 percent to 1.35 billion euros ona lower investment result and weaker underwriting earnings. Lossesfrom natural catastrophes jumped to 144 million euros from 7million euros, Allianz said.

|

At its investor day, Allianz will probably present a strategythat will include “a subtle shift in focus to return on capitalfrom growth in operating earnings,” the Barclays analysts wrote.“With margins plateauing and perhaps worsening, bottom line growthis a serious challenge for the industry, so perhaps better to focuson the utilization of capital rather than growth.”

|

--With assistance from Chris Malpass in Berlin.

|

Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.

Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader

  • All PropertyCasualty360.com news coverage, best practices, and in-depth analysis.
  • Educational webcasts, resources from industry leaders, and informative newsletters.
  • Other award-winning websites including BenefitsPRO.com and ThinkAdvisor.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.