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Allianz Stock Dips On Weak Q1 Profit, AuM

allianz may12 lt

Shares of Allianz SE (AZSEY.PK) were losing around 3 percent in German trading after the insurance and asset management company reported Tuesday weak profit in its first quarter due to higher claims from natural catastrophes and COVID-19-related losses in the Property-Casualty business. Revenues increased in the quarter, while assets under management declined.

The company, which withdrew its fiscal 2020 operating profit outlook last week, now said a new profit target for 2020 will be announced by the Board of Management upon completion of the revised planning once the impact of the Corona crisis can be better assessed.

Allianz does not expect to achieve its previous operating profit target for 2020 in the amount of 12 billion euros, plus or minus 500 million euros.

According to the firm, the COVID-19 induced turmoil in the financial markets and a slowing economy have clearly aggravated business conditions for the financial services industry.

For the first quarter, net income attributable to shareholders fell 28.9 percent to 1.4 billion euros from last year's 1.97 billion euros. Earnings per share decreased 309 percent to 3.21 euros from prior year's 4.65 euros.

The results reflected weak operating profit hurt by COVID-19-related market impacts. Operating profit declined 22.2 percent to 2.3 billion euros.

Strong profit growth in Asset Management business segment was offset by weak results in Property-Casualty business segment and Life/Health business segment.

The Property-Casualty business segment combined ratio rose 4.1 percentage points to 97.8 percent in the first quarter of 2020.

Total revenues, however, increased 5.7 percent to 42.6 billion euros from 40.3 billion euros last year. Internal revenue growth, which adjusts for currency and consolidation effects, amounted to 3.7 percent, driven in particular by Life/Health business segment.

Property-Casualty insurance total revenues rose 4.2 percent to 20.3 billion euros.

Total assets under management or AuM decreased to 2.13 trillion euros in the first quarter of 2020. Third-party AuM decreased by 129 billion euros to 1.56 trillion euros, compared to the end of 2019.

In Germany, Allianz shares were trading at 151.88 euros, down 2.84 percent.

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