German insurer Allianz on Friday posted a worse-than-expected 23% fall in second-quarter net profit, dampened by volatile markets and restructuring costs, but confirmed its target for the year.u
Despite the drop in profit, the quarter marks a return to business as usual for Allianz. The insurer had in recent months been dogged by a fraud case at its U.S. funds unit that resulted in a $6bn (€5.86bn) settlement with U.S. authorities in May.
The matter has cast a shadow over Allianz, one of Germany's most valuable companies, and while the bulk of the costs associated with the case are behind it, the issue still left its mark in the second quarter as Allianz booked restructuring expenses of more than €100m to wind down its U.S. funds unit AGI, which was at the centre of the troubles.
Net profit attributable to shareholders of €1.706bn in the quarter to June 30 missed a consensus forecast of €1.846bn and was down from €2.225bn a year earlier.
But the insurer's target of 2022 operating profit between €12.4bn and €14.4bn remains intact, the company said.
"We are well-positioned to manage the impact of high inflation and the economic pressures that are particularly evident in Europe," Chief Executive Officer Oliver Baete said.
Volatile markets took a toll on Allianz in the quarter, prompting it to take a €282m impairment charge and also contributing to a 12% drop in operating profit at its life and health division.
Analysts with Jefferies, which rate Allianz a "buy", noted that the non-operating losses and corporate costs "were far higher than expected" and called the results a "mixed beat".