widthWhen a DAX company feels it is necessary to release an interim report on Sunday night, it usually has nothing to do with good news. In early August, the same was true for Allianz Group, one of the world’s largest asset management companies. The cause of this report is (and will continue to be) the anger of the United States.
There, the pension fund responsible for Arkansas teachers and New York subway drivers has sued the Allianz Asset Management subsidiary for compensation. It is an Allianz Global Investor (General Electric). The background is that pension funds suffered high losses during the stock market crash caused by the new crown pandemic in the spring of 2020 and invested in some AGI hedge funds. Allianz can’t help but admit that “there are risks involved, that is, matters related to its structured Alpha Fund may have a significant impact on the future financial performance of the Allianz Group.”
Keen court reaction
As a result, Allianz’s stock price plummeted by nearly 10% on the next trading day. Prices have only experienced such a price drop once: in the summer of 2002, the company issued a profit warning. Many shareholders may now want to know when they will prepare for AGI issues. The group has so far stated that it is impossible to “reliably estimate the specific financial impact, including possible fines. Therefore, no provision has been made at this time.”
However, in the eyes of analysts, the optimistic outlook for the second half of 2021 can be estimated to be much better. Investment bank Jefferies has lowered the target price of Allianz shares from 240 euros to 230 euros, but still maintains its rating at “buy”. A study shows that under the shadow of US legal issues, investors seem to have hardly noticed the success of the insurance company in the second quarter.
Convincing half-year data
In fact, the numbers are good. Sales for the June quarter increased by 10.9% to 34.3 billion euros, while operating results increased by 29.4% to 3.3 billion euros. Therefore, Allianz management believes that 2021’s operating performance is in the upper half of the target range of 1.1 to 13 billion euros.
The group benefited from the economic recovery after the economic downturn caused by the corona. Life and health insurance performed particularly well. The asset management business also grew, and the scale of managed assets hit a record high. In the property and accident insurance sector, higher losses caused by natural disasters have been cushioned.Absence to help pass Corona Compared with the previous year, there is a conditional burden.
Allianz boss Oliver Bette Again, he is currently doing the only right thing: he is looking to the future. Because corona is not the only topic that Allianz management has to deal with at the moment. The financial industry is in turmoil. In the future, new competitors in the fintech/insurtech field are making life difficult for industry giants. As far as Allianz is concerned, it is responding with a digital strategy. The goal is to reduce the number and complexity of products and make them more personalized to meet customer needs. In addition, many insurance and assistance services are being fully digitized.
