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Allianz's managed assets reach record after clients add 18b euros

London

ALLIANZ SE's giant investment business saw managed assets grow to a record as clients added 18 billion euros (S$27.78 billion) in the first quarter, reversing outflows at the end of last year.

The new money lifted the amount the company oversees for outside clients to 1.55 trillion euros, Munich-based Allianz said on Tuesday. The insurer owns US bond giant Pacific Investment Management Co and Allianz Global Investors in Germany, making it one of the biggest investment companies globally. Including money overseen for Allianz's insurance business, the firms now manage a combined 2.1 trillion euros, also a record.

Chief executive officer Oliver Baete, 54, has been seeking revive growth at Europe's largest insurer by exploring deals, including in asset management, and pushing into growth markets in Asia, where it trailed many of its European rivals. But large acquisitions have proven elusive so far, leaving Mr Baete to pursue smaller transactions and returning excess cash to shareholders, including 1.5 billion euros that he has earmarked for a new share buyback program this year.

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Both operating profit, at three billion euros, and net income exceeded analysts' estimate in the quarter, and Allianz confirmed a full-year target of 11.5 billion euros in operating profit.

Zurich Insurance Group AG said last week it's on track to meet or exceed its targets this year as pricing trends improve and will continue to review deals following the approximately US$2 billion acquisition of Australia & New Zealand Banking Group's life insurance division.

Zurich was one of the potential acquisition targets Allianz evaluated under Mr Baete, Bloomberg reported last year, with other companies also being examined. More recently, the insurer was looking at the feasibility of combining its asset management business with that of DWS Group, people familiar with the matter have said.

Allianz estimated it will pay out about 100 million euros of claims tied to mine disruptions at Vale SA and the crash of a Boeing 737 Max plane and the subsequent grounding of the aircraft.

The giant German insurer is one of the companies that insured Boeing's airline manufacturer liability policy. Settling claims from the two airplane crashes could cost US$1 billion, according to a Bloomberg Intelligence estimate based on prior cases, but legal experts agree the payouts could be even higher. BLOOMBERG