FRANKFURT Allianz's (ALVG.DE) operating profit grew more strongly than expected in the second quarter, with a strong performance in property and casualty insurance and asset management overcoming weakness in life insurance.
A 5.2 percent rise in quarterly operating profit to 2.4 billion euros ($529 million) surpassed the average forecast of 2.3 billion in a Reuters poll, enabling Europe's biggest insurer to confirm a full-year target of 9.2 billion euros, plus or minus 500 million.
"Based on our current projections we see the figure more toward the upper end of this range," Chief Executive Michael Diekmann said in a statement, adding the standard caveat that the projection stood as long as natural catastrophes and capital market turbulence did not exceed expected levels.
Operating profit in property and casualty insurance also surpassed analysts' expectations, despite a net hit of 330 million euros from flooding in central Europe in June, which Allianz trimmed from an estimated 350 million previously.
Asset management also rose strongly on higher fees and commissions, although third party net asset inflows slowed to 7 billion euros from 19 billion euros in the year-earlier quarter.
Life and health insurance fared less well than analysts had expected, hurt by investment results at the company's German operations, reflecting the low interest rate environment and regulations that limit Allianz's options for investing assets.
According to Thomson Reuters StarMine, which weights analyst forecasts according to their track record, Allianz trades at 9 times 12-month forward earnings, a premium to Europe's No. 2 insurer Axa (AXAF.PA), which trades at a multiple of just over 8.
Allianz's net income rose by 27 percent to 1.6 billion euros, contrasting with rival Axa, which on Friday reported a 1 percent decline in first-half earnings, hit by an accounting loss on interest rate hedging instruments.
(Reporting by Jonathan Gould; editing by Tom Pfeiffer)