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February 27, 2014 at 06:34 AM
(Bloomberg) — Allianz SE, Europe’s biggest insurer, posted fourth-quarter earnings that missed analysts’ estimates and said operating profit may decline this year. The shares fell the most in seven months.
Net income grew to 1.26 billion euros ($1.72 billion) in the quarter from 1.24 billion euros in the year-earlier period, the Munich-based company said in a statement today. That compared with the 1.31 billion-euro average estimate of 13 analysts surveyed by Bloomberg.
Insurers and reinsurers are focused on bolstering earnings from underwriting as low interest rates weigh on investment returns. Allianz, led by Chief Executive Officer Michael Diekmann, 59, is targeting operating profit of 9.5 billion euros to 10.5 billion euros this year compared with 10.1 billion euros in 2013, the company said.
“We continue to see more downside risk than upside risk at Allianz,” Thomas Seidl, an analyst at Sanford Bernstein in London, said in an e-mailed report to clients. Property and casualty insurance “is the only segment improving,” he said.
Allianz shares lost as much as 4.3 percent, the biggest decline since July 3, and fell 3 percent to 127.1 euros at 1:38 p.m. in Frankfurt, valuing the company at 58 billion euros. Losses this year were 2.5 percent compared with a gain of 1.2 percent for the Bloomberg Europe 500 Insurance Index.
The company said it will raise its dividend payout for 2013 to 5.30 euros per share from 4.50 euros. That matched a Bloomberg forecast.
Pimco decline
At Allianz’s asset-management unit, which includes Newport Beach, California-based Pacific Investment Management Co., or Pimco, operating profit fell 23 percent to 703 million euros in the fourth quarter. Assets under management declined 4.4 percent to 1.77 trillion euros at the end of December from a year earlier amid foreign currency exchange effects of a weak dollar, Allianz said.
Following last month’s surprise resignation of Pimco Chief Executive Officer Mohamed El-Erian, the asset manager named six deputy chief investment officers to emphasize the depth and breadth of its investment talent. El-Erian had shared the role of co-chief investment officer with Bill Gross.
El-Erian will continue to work for Allianz as chief economic adviser, Diekmann said at press conference in Munich today.
