* Pimco achieves net inflows of 21 bln euros
* Property and casualty unit hit by heavy storm claims
* Reports 'strong' Solvency II ratio (Adds details on Pimco, company, analyst comment)
FRANKFURT, May 12 (Reuters) - German insurance group Allianz on Friday reported rising investment inflows at bond fund manager Pimco and stuck to its operating profit target for 2017.
Pimco attracted net investment inflows of 21 billion euros ($22.83 billion) in the first quarter, its strongest quarterly net inflows since the first quarter of 2013.
Pimco's strong performance marks the third consecutive quarter of net inflows for the bond fund powerhouse, and mirrors a strong start to the year seen by rivals including BlackRock .
Pimco had experienced several years of cash withdrawals in some of its main funds, including its flagship Pimco Total Return Fund. Co-founder Bill Gross, known as "the Bond King" during his years at Pimco, left in 2014 for Janus Capital Group Inc.
Allianz pointed to recent positive headlines about Pimco and its investment performance as the main factors behind the strong flow of money into its funds. Allianz expects that the trend will continue in the months ahead.
Pimco’s Income Fund is now the world's largest active mutual bond fund and leads Morningstar's U.S. list of top flowing active funds, Allianz noted in an analyst presentation on Friday. In addition, its Total Return Fund, managed by Dan Ivascyn, was upgraded to a five star rating by Morningstar, Allianz said.
Some 92 percent of Pimco's assets under management outperformed benchmarks over a three year basis.
"That attracts people," Allianz Chief Financial Officer Dieter Wemmer said in call with reporters.
"Pimco had a very strong quarter," he said. "Pimco is on a good track for further progress."
Analysts concurred that the outlook was brightening for the fund manager. RBC Capital Markets said the 21 billion euro net inflow of funds in the first quarter was ahead of its 10 billion euro estimate. "There is strong momentum for Pimco's flows," RBC said in a note to investors.
In its first-quarter earnings report, Allianz said it was continuing to target operating profit of 10.8 billion euros ($11.74 billion), give or take 500 million euros.
"Allianz saw a good start into 2017 with results putting the group on track to meet its operating profit target for the full year," Wemmer said.
The maintained forecast comes against the backdrop of a sector facing challenges including increased regulation, competition from fintech start-ups and questions surrounding the impact of Britain's exit from the European Union on financial services.
Allianz had reported a slightly stronger than expected first-quarter profit when it held its annual shareholder meeting earlier in May.
In contrast to positive news on its asset management business, Allianz's property and casualty business took a hit from heavy storm claims and a British regulatory change that increases personal injury payouts from car accidents, pushing down its operating profit by 12.7 percent to 1.3 billion euros.
Cyclone Debbie, which hit Australia in March, cost Allianz about 55 million euros, Wemmer said. The U.K. regulatory change cost Allianz about 112 million euros.
The company also reported what Wemmer described as a "strong" Solvency II ratio, a broad measure of an insurer's financial health.
The ratio was 218 percent at the end of 2016 and 212 percent at the end of the first quarter of this year, which Wemmer said is well within Allianz's target of 180-220 percent. ($1 = 0.9200 euros) (Reporting by Tom Sims and Simon Jessop; Editing by David Goodman and Jane Merriman)