Allianz CEO describes horrible week with U.S. DOJ probe By Reuters

© Reuters. Flags with the brand of Allianz SE, Europe’s greatest insurer, are pictured earlier than the corporate’s annual shareholders’ assembly in Munich, Germany Might 3, 2017. REUTERS/Michaela Rehle

By Tom Sims and Alexander Hübner

FRANKFURT (Reuters) -Oliver Baete, chief government officer of Germany’s Allianz (DE:), on Friday spoke of a “horrible week” for him and the insurer, his first response to a disclosure that the U.S. Division of Justice was probing losses at its fund division.

Baete, making an sudden look to reporters in a name after the corporate’s second-quarter earnings, stated the insurer would put aside reserves for the case when the time is suitable.

“It was a horrible week for us and for me personally,” he stated.

The DOJ investigation, disclosed by Allianz on Sunday, follows lawsuits by U.S. buyers claiming round $6 billion in losses from a household of funds, saying Allianz didn’t safeguard their investments through the coronavirus market meltdown.

Final yr, Allianz revealed that the U.S. Securities and Trade Fee was additionally investigating. It had stated it was actively cooperating with each our bodies and defending itself within the lawsuits.

“This occasion will go away its mark, but it surely won’t change the Allianz’s path,” Baete stated.

Baete stated he regretted that some buyers misplaced cash. Shares fell sharply on Monday after Sunday’s disclosure.

Allianz disclosed on Friday that the DOJ had additionally requested info from present and former U.S. staff on the fund administration division.

The DOJ has declined to touch upon the matter.

Allianz posted a better-than-expected 46% soar in second-quarter internet revenue and offered a rosier outlook for the total yr because it emerges from stress on enterprise brought on by the coronavirus pandemic.

Web revenue attributable to shareholders of two.225 billion euros ($2.60 billion) within the three months by means of June compares with 1.528 billion euros a yr earlier. The determine beat a 2.055 billion euro consensus forecast.

Extra optimistic in regards to the outlook for this yr, the corporate stated it now expects working revenue in 2021 to be within the higher half of a variety of between 11 billion and 13 billion euros.

“We’re assured in regards to the second half of 2021,” stated Giulio Terzariol, chief monetary officer.

Final yr, the insurer deserted its revenue goal as a result of financial uncertainty ensuing from the pandemic and posted its first decline in working revenue in practically a decade.

Allianz, like different insurers, had confronted shoppers making claims for enterprise interruption and cancelled occasions from lockdowns, whereas demand for automobile and journey insurance coverage fell.

In one other signal of a return to regular occasions for the insurance coverage group, Allianz introduced on Thursday plans to purchase again as much as 750 million euros value of shares by the top of the yr, after final yr cancelling a buyback midway by means of as a result of pandemic.

The group has finished a number of main buyback programmes since 2017, spending a complete 8.25 billion euros by itself inventory.

($1 = 0.8457 euros)

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