Allianz Expects More Writedowns in First Quarter
Global financial market turmoil is casting deepening gloom on Allianz, making its financial targets for this year and next harder to hit, Europe's biggest insurer said on Thursday.
Allianz's aim of increase operating profit by an average 10 percent in 2008 and 2009 had become more difficult and the company faced additional writedowns on its investments in complex structured financial products, it said in its annual report.
"In view of the continuing crisis in the financial markets and the difficulty of assessing its impact on the real economy, this has become much more challenging," Allianz Chief Executive Michael Diekmann said of its operating profit goal.
"As a result I need to place a special caveat on our outlook for the banking sector. In view of the current uncertainties and potential further mark-downs it is not possible to give a reliable forecast of the banking segment's contributions to the overall results."
The company's shares fell 1.3 percent in early trading while the DJ Stoxx European insurance sector index was down 0.7 percent.
Allianz last month reported it made record net profit of nearly 8 billion euros ($12.58 billion) in 2007, but warned that the fallout from the crisis in the U.S. subprime mortgage market affect its businesses more than usual.
An Allianz spokeswoman said the annual report was a reiteration of statements it made at its annual results news conference on Feb. 21.
Besides further markdowns on structured investments, which Allianz said it expected in the first quarter and which could also affect quarterly results going forward, the company said that intense competition in its main business of property and casualty insurance would limit growth in developed country markets.