* Sees 2017 operating profit of 10.8 bln euros
* Q1 operating profit up 9.4 pct at 2.9 bln euros
* Q1 revenues up 2.5 pct, net profit down 15 pct
(Updates with details on combined ratio, asset management;
fresh share price; wraps in CEO statements on acquisitions)
By Tom Sims and Jörn Poltz
MUNICH, May 3 German insurer Allianz
is optimistic about its prospects despite a very tough business
environment, the German insurer said on Wednesday as it posted a
slightly better than expected first-quarter profit.
"We are looking optimistically to the future, though I will
remind you that we are operating in a very, very difficult
environment," Chief Executive Oliver Baete told Allianz's annual
general meeting, held on the site of the 1972 Munich Olympics.
Allianz also confirmed its forecast for 2017 as it said
operating profit had risen 9.4 percent to 2.9 billion euros
($3.2 billion) in the quarter, while revenue was 2.5 percent
higher at 36.2 billion euros.
"The key indicators show that the underlying business is
delivering," RBC Capital Markets said. "The highlights provided
today suggest that the business segments are performing well."
Shares in Allianz were up 0.7 percent at 177.25 euros by
1334 GMT in a flat STOXX Europe insurance index.
Allianz and the insurance industry are facing challenges
including increased regulation, competition from financial
technology startups, uncertain U.S. policy, and questions
surrounding Britain's exit from the European Union.
Despite this, the German group affirmed its forecast for
2017 operating profit of 10.8 billion euros ($11.8 billion),
plus or minus 500 million euros, barring unforeseen events,
crises or natural catastrophes.
GOOD START TO 2017
"Our first-quarter results were a good start into 2017 and
our balance sheet remained strong," Baete said in a statement.
But large claims and natural disasters did drag on earnings
in the first quarter, when it had to pay out relatively more.
Allianz said its combined ratio, a closely-watched measure of
expenses to premium income, rose to 95.6 from 93.3 percent.
Allianz said net income attributable to shareholders was 1.8
billion euros in the quarter, down 15.3 percent from a year ago,
due largely to one-off gains from the sale of financial stakes
the previous year.
Operating profit was 4 percent and net income 2 percent
better than market consensus expectations, according to UBS.
Allianz's asset management business, which includes bond
fund manager PIMCO, also showed signs of strength, with
third-party assets under management rising to 1.40 trillion
euros from 1.36 billion euros a year earlier and Baete told
investors that PIMCO was "running splendidly".
Baete pointed to property insurance as a sector that was of
particular interest for Allianz for acquisitions, but sought to
quell concerns from some investors that it would rush into M&A.
"We will continue to be very careful investing your money,"
Baete said, noting that market prices are high.
Also at the AGM, shareholders formally ratified a proposal
naming Michael Diekmann, the company’s former CEO, as the new
chairman of the supervisory board. He succeeds Helmut Perlet
with effect from May 7.
(Editing by Maria Sheahan and Alexander Smith)