(Adds details on Pimco, details)
By Ulrike Dauer
FRANKFURT--Positive currency-translation effects and rising
capital markets lifted Allianz SE's (ALV.XE) first-quarter profit,
offsetting weaker operating-profit contributions from bond-fund
manager Pacific Investment Management Co. and property and casualty
insurance operations, the German insurer said Tuesday.
Last week, Allianz reported an 11% rise in first-quarter net
profit to 1.82 billion euros ($2.03 billion) and a 4.8% gain in
operating profit to EUR2.86 billion for the quarter, but didn't
give a breakdown of the individual business units. It said then it
was confident about reaching its full-year operating-profit goal of
EUR10.4 billion plus or minus EUR400 million, after a good start to
the year.
Allianz has property/casualty and life/health insurance
operations and an asset-management business that includes the
world's biggest fund manager Pimco and smaller peer Allianz Global
Investors.
According to the figures released Tuesday, asset management
contributed 14% lower operating profit of EUR555 million to the
quarterly results. While assets under management rose, these were
driven by market value increases and positive currency translation
effects--mainly the weaker euro against the dollar--which more than
offset Pimco's EUR68.3 billion net asset outflows. The cost-income
ratio rose to 64.7% from 57.4%.
Positive currency translation effects led to a EUR145 billion
one-time gain in the asset-management business, Allianz said.
Developments at the business are being watched closely following
last year's turbulent management reshuffle at Pimco that culminated
in the exit of co-founder and chief investment officer Bill Gross
in September.
Pimco's net asset outflows continued to drag on quarterly
results, though they have eased since the beginning of the
year.
Allianz's group investments also made a substantial quarterly
profit contribution. Net investment income rose 65% in the quarter
to EUR8.35 billion.
Allianz's main profit driver--property and casualty
insurance--reported a 14% decline in operating profit to EUR1.29
billion. This was mainly due to higher costs for winter storms and
costs for restructuring the parts of U.S. insurer Fireman's Fund it
didn't sell.
Allianz closed the sale of Fireman's Fund's retail business to
ACE Ltd. (ACE) in April; it will book a EUR300 million gain on the
sale in the second quarter.
Allianz's life/health insurance operations recorded at 26% rise
in operating profit to EUR1.1 billion.
Write to Ulrike Dauer at ulrike.dauer@wsj.com
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