Allianz confirmed the earnings figures previously published in February in its 2011Annual Report, but Europe’s biggest insurance group also warned that it expects a tough 2012 as it works to counter the burden of low interest rates by improving operations in its insurance businesses.
“The current fiscal year will be no less challenging than the year under review,” said Chief Executive Michael Diekmann in a letter to shareholders that accompanied the annual report.
“Although the global economy has made a recovery over the last year, investment results are likely to remain under pressure due to low interest rates.”
Allianz repeated its forecast that operating profit for 2012 would be in the range of €8.2 billion ($10.88 billion), plus or minus €500 million [$663.5 million] and said it was expected to improve in 2013.
The company said it could make no forecast for net income in 2012 and beyond because of the size of mark-to-market valuations in its profit and loss account.
In property-casualty insurance, Allianz expects growth bolstered by price rises in some markets and improvements in the operating result.
In life and health insurance, it expects stable revenue and a slight rise in its operating result, despite difficult market conditions, the company said.
Diekmann said he was disappointed with a fall in operating profit at the company’s German and U.S. operations, which he said was mainly due to high damage claims last year.
“Additional measures are needed as a result of these delays in the profit turnaround program,” he said, adding that he did not expect the U.S. market to give a strong boost to business there in 2012.