Allianz SE is sticking with its full-year profit target as improving returns offset a jump in losses from natural catastrophes.
The insurer reiterated an operating profit target of 10.3 billion euros to 11.3 billion euros for this year in a statement on Wednesday. Operating profit rose 9.4 percent to 2.9 billion euros. Net income dropped 15.3 percent to 1.8 billion euros ($2 billion) from 2.1 billion euros a year earlier, as gains from the sale of financial stakes weren’t repeated.
“Our first quarter results were a good start into 2017 and our balance sheet remained strong,” Chief Executive Officer Oliver Baete said in the statement. “Despite market volatility and low interest rates, we confirm our outlook.”
At Allianz’s property and casualty insurance unit, spending on claims and other costs as a percentage of premiums, known as the combined ratio, worsened to 95.6 percent from 93.3 percent a year earlier due to higher disaster claims. A ratio below 100 percent means an insurer is making a profit from underwriting.
The insurer’s asset-management unit, which comprises Pacific Investment Management Co. and Allianz Global Investors, increased its third-party assets under management to 1.4 trillion euros from 1.36 trillion euros at the end of last year.
Allianz earlier this year announced its first-ever share buyback, a plan to spend as much as 3 billion euros by next February, with other purchases possibly to follow. It also aims to at least maintain the dividend per share paid last year. The insurer is holding its annual shareholder meeting in Munich on Wednesday.
Giulio Terzariol was appointed as chief financial officer in March to succeed Dieter Wemmer at the beginning of next year. The insurer also plans to propose former CEO Michael Diekmann as chairman of the supervisory board.
The company will publish detailed first-quarter results on May 12.