(Corrected a typo in the eighth paragraph in the name of Giulio Terzariol.)
MNICH (dpa-AFX) – A legal dispute in the USA is costing the insurance group Allianz dearly. The Dax group (DAX 40) set aside 3.7 billion euros for comparisons with large investors from its subsidiary Allianz Global Investors (AGI) and with a view to talks with US authorities, as it announced on Thursday evening in Munich. However, the board anticipates further charges before the matter is fully resolved. He dared not predict when that would happen.
The bottom line is that Allianz still earned around 6.6 billion euros in the past year as a result of the burden of billions, three percent less than in the previous year, which was burdened by the consequences of Corona. According to the information, the provisions burdened the surplus with 2.8 billion euros.
Several investors have sued Allianz in the US for losses they blame on the fund subsidiary AGI. The US Department of Justice and the Securities and Exchange Commission have become involved in the matter. Allianz made the impending burdens public last summer, but did not name a sum.
The allegations boil down to the fact that the fund managers did not comply with their own guidelines and did not react appropriately to market developments in the early phase of the corona pandemic. This in turn is said to have caused the high losses of investors.
“The forthcoming settlements represent an important step towards a settlement of all proceedings,” Allianz wrote in its statement. Discussions with the remaining plaintiffs, the US Department of Justice and the Securities and Exchange Commission were still ongoing. The Allianz share price hardly reacted to the news in after-hours trading on the Tradegate platform.
Otherwise, the group’s business was brilliant in the second year of Corona. Compared to the previous year, sales rose by almost six percent to 148.5 billion euros. Operating profit increased by almost a quarter and reached a record value of 13.4 billion euros. Allianz not only exceeded its forecast, which had already been increased to 13 billion euros, but also the average expectation of analysts.
In any case, the Allianz shareholders should not starve. The dividend is to increase from EUR 9.60 to EUR 10.80 per share. In addition, the group intends to invest up to one billion euros in buying back its own shares this year.
CFO Giulio Terzariol is confident about the current year. The Executive Board is aiming for an operating profit of between 12.4 and 14.4 billion euros for 2022. As in the previous year, further burdens from the legal dispute in the USA are excluded from this figure.
In 2021, all of Allianz’s business areas generated more in day-to-day business than in the first Corona year, 2020. In property and casualty insurance, operating profit rose by more than 30 percent to 5.7 billion euros after corona-related insurance claims such as event cancellations in 2020 impacted the result had pressed.
This time Allianz also withstood the devastating damage caused by the flood disaster that hit Germany and several neighboring countries in July. A decline in basic claims and the release of loss reserves would have compensated for the increased burden from natural catastrophes, it said.
In life and health insurance, operating profit increased by 15 percent to 5 billion euros after the group booked a special charge in the USA a year earlier. But positive developments in German life and health insurance also drove the result up, according to the information.
The funds business of the group’s subsidiaries Pimco and AGI also did well, if one excludes the billions in costs from the ongoing legal dispute. Investors pushed more than 110 billion euros in fresh money into the funds of the two Allianz companies. The assets managed for third parties grew by around 15 percent to almost EUR 1.97 trillion between the end of 2020 and the end of 2021. The division’s operating profit increased by 22 percent to around 3.5 billion euros./stw/bek/he
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