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Allianz's asset-management unit sees profits spike on inflows

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Profits at Allianz’s asset management arm are soaring on the back of increased inflows.

[LONDON] Profits at Allianz’s asset management arm are soaring on the back of increased inflows.

Adjusted for foreign exchange effects, operating profit at the unit increased by a “remarkable” 16.3 per cent, Europe’s largest insurer said. External managers allocated almost 21 billion euros to the firm to oversee, most of it at the Pimco unit, which has been luring back investors on the back of Chief Investment Officer Daniel Ivascyn’s reputation as a star trader.

The inflows come “on top of the 150 billion euros in net inflows seen in 2017,” Allianz Chief Financial Officer Giulio Terzariol said in a statement on Tuesday. “It is a sign of customer confidence.”

Active managers have been luring back investors as market volatility rises, creating more trading opportunities. The industry has been battling falling fees and underperformance on the back of the rise of cheaper passive investment strategies.

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Market voices on:

The devastation wrought by last year’s US hurricanes is boosting demand for property and casualty coverage at Allianz. More customers are opting for coverage and premium income is also growing after the storms and California wildfires contributed to a record year for insurance losses. That led to “strong internal growth” of 4.9 per cent in the first quarter at the property coverage unit of Europe’s largest insurer.

“We had increases in both the top and the bottom lines, even if market volatility was visible at an operating level in the first quarter,” Chief Executive Officer Oliver Baete said in a statement on Tuesday. “This good performance puts Allianz on track to meet its 2018 yearly targets.”

Other key numbers:

Net income attributable to shareholders rose to 1.9 billion euros (S$3.08 billion) from 1.8 billion euros a year earlier.

Gross premiums written in property and casualty rose 1.1 per cent from a year earlier to 17.9 billion euros.

 

BLOOMBERG