EMG Man Group Plc

FRANKFURT—Allianz SE on Friday reported a 46% decline in profit for the second quarter on a high disaster bill, a substantial one-time hit from the planned sale of a unit and continuing net asset outflows.

Still, Europe's biggest primary insurer by market value said first-half results put the company on course for its full-year operating profit targets.

Allianz, which owns U.S. bond fund manager Pacific Investment Management Co., targets operating profit between €10.0 billion ($11.1 billion) and €11.0 billion for 2016.

"We stick to the midpoint of €10.5 billion as a good basis for our guidance," said Chief Financial Officer Dieter Wemmer during a media call.

Net profit fell to €1.09 billion from €2.02 billion in the year-ago period. It was well shy of an average forecast of €1.51 billion in a Dow Jones poll.

Total revenue fell 2.5% to €29.4 billion.

Quarterly operating profit, the company's main yardstick, was also lower at €2.35 billion. That marked a 17% decline from €2.84 billion in the year-earlier quarter and was weaker than the forecast of €2.39 billion.

Allianz's closely watched asset management business, Pimco, contributed €498 million to operating profit in the second quarter, beating analyst expectations of €488 million. That was down 1.4% from €505 million in the same quarter of 2015.

Pimco still had quarterly net outflows of €18 billion, after around €10.1 billion in the first quarter.

Nevertheless, Allianz reiterated it expects Pimco's net outflows to stop in the second half.

Of the €18 billion net outflows, €17 billion was related to a single large customer who withdrew funds in April, Mr. Wemmer said. He declined to name the client and said net inflows and outflows of other Pimco customers were stable.

Pimco has been a drag on group earnings ever since the asset manager's turbulent management reshuffle two years ago that culminated in the abrupt exit of co-founder and chief investment officer Bill Gross in September 2014, six months after Chief Executive Mohamed El-Erian had quit.

Investors have yet to see a clear turnaround at Pimco. Its net asset outflows have gradually eased following an initial hiccup that then spread over several quarters. In 2015, Pimco's flagship Total Return Fund ceded its title as the world's largest bond fund.

Last month, Pimco appointed a new chief executive. Emmanuel Roman, currently chief executive of hedge-fund manager Man Group PLC and a former Goldman Sachs Group Inc. banker, will take the helm on Nov. 1. The present CEO, Douglas Hodge, an internal appointment in the wake of Mr. El-Erian's departure, will assume a role as managing director and senior adviser.

Allianz Chief Executive Oliver Baete, speaking in the same media call, allayed fears that Allianz would in future take Pimco on a shorter leash.

"We won't interfere in Pimco's daily business and fund management," Mr. Baete said. "But we plan to better make use of Pimco's know-how for the group's other products, customers and business in different countries."

In the quarter, Allianz, like other insurers and reinsurers, had to pay claims caused by floods in Europe, wildfires in Canada, and hailstorms in the U.S., among others. Natural disasters cost Allianz €501 million, up from €122 million. The total bill for major disasters amounted to around €1.2 billion, about twice the year-earlier number.

Allianz's quarterly earnings were also burdened by a €352 million one-time hit from selling its South Korea life insurance and global investors business to China's Anbang Insurance Group.

Allianz had said in May that the closing of the sale would curb net profit by around €350 million. It sold the business for around $3 million.

Last year, Allianz's second-quarter earnings had been spared high claims payouts. They also got a €200 million one-time boost after Allianz sold the retail business of its U.S. insurer Fireman's Fund to ACE Ltd.

Write to Ulrike Dauer at ulrike.dauer@wsj.com

(END) Dow Jones Newswires

August 05, 2016 04:35 ET (08:35 GMT)

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