Allianz SE's second-quarter profit was battered by virus-related claims and falling fees, neutralizing a boost in assets at its Pacific Investment Management Co. unit.
Group operating profit at Allianz fell 19% to €2.57 billion ($3.1 billion), hit by lower fees in asset management and insurance costs, the company said Wednesday. The overall backdrop hurt earnings even as PIMCO's clients plowed €23 billion into the money manager after pulling the most cash in five years in the prior quarter.
Allianz's business model has been delivered a twin blow, as the coronavirus upends insurance companies and active asset managers are increasingly squeezed by passive rivals. While the surge in claims from the pandemic has been softened by PIMCO's rebounding inflows, Allianz's two asset-management divisions saw profits drop as performance fees shrank and costs spiked.
"The pandemic continues to be a challenge for all industries," CEO Oliver Baete said in a statement. We are "confident that we will see a solid financial performance also in the second half of 2020."
As the market rout reversed in the second quarter, PIMCO saw strong inflows into strategies such as investment-grade credit, high-yield bank loans and private funds, Allianz said. At the smaller Allianz Global Investors business, clients added cash to its multiasset and fixed-income products.