Asset management revival powers Allianz profits

AFP: German insurer Allianz has reported a big jump in net profit in the second quarter, as revitalised asset-management activities boosted its result.

US asset management subsidiary Pimco was a major contributor to a 55-billion-euro ($ 65 billion) increase in funds managed by the firm between April and June.

In a sign of recovery from a slump following the departure of founding chief executive Bill Gross in 2014, Pimco accounted for some 33 billion euros of net new funds in the firm’s coffers, 19 billion of them from a single client.

“Pimco has become a performance engine again,” finance director Dieter Wemmer said in a statement.

In total, third-party funds under management at Allianz reached 1.4 trillion euros.

That figure was just 3.0 billion euros higher than in the first quarter, as the weaker dollar shrank the value of the portfolio in euro terms.

Operating, or underlying profit from asset management alone gained 16.8% to reach 584 million euros across the whole group.

Allianz had announced last week that net profits grew 83.4% between April and June, to 2.0 billion euros.

Operating profit added 23% to reach 2.9 billion euros, on the back of revenues up 2.0% at 30 billion.

Both the property and casualty insurance and the life and health insurance arms boosted their underlying profits, with lower claims helping property and casualty to 28% growth.

Later Friday morning, Allianz announced a British joint venture with the Liverpool Victoria Friendly Society (LV=), creating what the firm said would create the UK’s third-largest personal insurer.

The new insurer would have more than 6.0 million customers and annual premium income of £ 1.7 billion (1.9 billion euros, $ 2.23 billion).

Allianz will pay LV= some £ 500 million for a 49% stake in its general insurance arm, with the joint venture gaining Allianz’s home and vehicle insurance business while LV= hands over its commercial insurance clients to the Munich firm.

Executives expect the deal to be sealed “during the second half of 2017,” they said in a statement, with Allianz set to pay £ 213 million for a further 20.9% stake in LV= general insurance in 2019.