Allianz Profit Hit by Fund Management

Allianz said Wednesday that first-quarter net profit fell 4% as a weaker contribution to earnings from its asset management business outweighed falling claims costs and revenue gains.

Net profit fell to EUR1.64 billion ($2.25 billion) from EUR1.71 billion a year earlier. Revenue was up 6% at EUR34 billion from EUR32 billion in the first quarter of 2013.

Overall operating profit was down 2.6% at EUR2.72 billion from EUR2.80 billion. The decline was due mainly to its asset management business, where operating profit dropped 28% to EUR646 million from EUR900 million as a result of lower revenue, forex losses and the absence of one-off performance fees following a fund closure a year ago.

Allianz Chief Executive Michael Diekmann last week guided for lower quarterly operating profit, saying high performance fees related to the closure of a Pimco private fund that boosted the asset management business in the first quarter of 2013 wouldn't be repeated this year. In the first quarter of 2013, Allianz had booked EUR276 million in performance fees in asset management. The figure was only EUR19 million in the first quarter of this year.

In addition, Allianz transferred some entities from asset management to other areas. This contributed to lower revenue and operating profit while adding EUR26 million to first-quarter operating profit in its life and health insurance business. The falling value of the U.S. dollar against the euro also weighed on the asset management results, Allianz said.

The figures are exactly in line with the small set of first-quarter earnings that Europe's biggest primary insurer by market value released a week ago, ahead of its annual shareholder meeting. Allianz also said first-quarter results put it on track for its full-year operating profit target.

Write to Ulrike Dauer at [e-mail]

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