Allianz’s Q1 profit drops nearly 30%

MUNICH: German insurer Allianz SE yesterday reported a near 30% plunge in quarterly profit, weighed down by claims for Australian wildfires and events cancelled because of the new coronavirus.

The group said global economic “uncertainties” caused by the pandemic had forced 2020 targets to be abandoned.

“The Covid-19 induced turmoil in the financial markets and a slowing economy have clearly aggravated business conditions,” a statement said.

From January to March, net profit at Allianz fell by 29% to €1.4 billion ($1.5 billion) compared with the first quarter a year earlier.

Group revenues climbed almost 6% to €42.6 billion, driven mainly by new business in its life and health insurance arm.

Earnings at the key property and casualty business however were dragged down by higher claims for natural catastrophes including Australia’s deadly bushfire season, as well as “Covid-19 related losses”.

Like other insurers around the world, Allianz is facing a flood of payouts over events that had to be cancelled or scaled down to curb the outbreak.

There was better news for the group’s asset management division, which reported a jump in operating profit thanks to higher fees and commissions for the funds it manages on others’ behalf.

“The first quarter of 2020 showed the resilience of Allianz in these unprecedented circumstances,” said CEO Oliver Baete. “These are very testing times for us all, but I believe that together we will rise to this challenge.”

The group said it would announce a revised profit target for 2020 “once the impact of the corona crisis can be better assessed”.