US tax reform hit Allianz in 2017

FRANKFURT AM MAIN, Feb 16 (AFP): German insurer Allianz on Friday reported a drop in net profits in 2017 as US tax reform and a string of natural disasters weighed on its bottom line, but it forecast stable underlying profits this year.

The Munich-based group booked net profits of 6.8 billion euros ($8.5 billion), down 2.3 percent year-on-year, while analysts surveyed by Factset had been pencilling in an increasse of around 500 million euros.

In the the fourth quarter alone, Allianz's net profit fell 22 per cent compared with October to December 2016, hit by a one-off impact from the US tax reform and from the sale of a regional German bank.

Full-year revenues grew 3.0 per cent to 126.1 billion euros, beating forecasts, for an operating or underlying profit of 11.1 billion, slightly higher than in 2016.

Operating profit slumped 7.5 per cent at the property and casualty insurance division, to 5.0 billion euros.

Allianz said it took a hit of 1.1 billion euros from forest fires in California, hurricanes Harvey, Irma and Maria, storms in Europe and other catastrophes -- 400 million more than it paid out for disasters last year.

2017 was "the costliest natural catastrophe year ever for the insurance sector," said chief executive Oliver Baete.

The picture was brighter at Allianz's other divisions, with both the life and health insurance and asset management units increasing their operating results.

A record 150 billion euros flowed into the asset management branch and US subsidiary Pimco last year, bringing its total third-party funds under management to some 1.45 trillion euros.