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Investing.com -- Shares of Allianz SE (ETR:ALVG) fell more than 3% Thursday after the insurer reported weaker-than-expected earnings for the first quarter of 2025, with analysts citing pressure from restructuring costs, tax provisions and softer margins in its property and casualty business.
Net income came in at €2.55 billion, missing analyst estimates by 6% to 10%. Core net income matched that figure and also fell short.
The shortfall was primarily attributed to a tax provision related to the sale of Allianz’s Indian joint venture and higher-than-expected restructuring charges.
Operating profit was €4.24 billion, in line with expectations and within the company’s full-year guidance of €15 billion to €17 billion. However, analysts described the underlying quality of the results as underwhelming.
In the property and casualty segment, revenue grew 7.1%, and the combined ratio improved slightly to 91.8%, beating consensus.
But after adjusting for discounting and one-off effects, the undiscounted attritional loss ratio was 71.5%, about 70 basis points worse than expected, indicating margin pressure.
Investment income in P&C also missed estimates, impacted by currency effects, particularly the weaker U.S. dollar.
The life and health division outperformed, with operating profit of €1.43 billion, modestly ahead of forecasts.
New business value beat expectations by over 11%, and the contractual service margin came in on target at €57 billion. Margins remained stable at 5.5%.
In asset management, net inflows of €29 billion exceeded expectations. However, assets under management were slightly below consensus at €1.914 trillion, and operating profit missed at €811 million. The cost-income ratio rose to 61.3%, versus expectations of 61%.
Allianz reported a Solvency II ratio of 208%, three percentage points below consensus. Analysts said the miss was due to market and currency effects but did not indicate a fundamental capital concern.
Analysts flagged the disappointing earnings quality, with Jefferies noting a 46% surge in non-operating costs.
Barclays (LON:BARC) called the results “somewhat underwhelming” and warned of likely share price pressure, while Morgan Stanley (NYSE:MS) said the results were “business as usual” but noted valuation risks.
Allianz maintained its full-year profit guidance. However, with consensus near the top of that range, some analysts warned that future revisions may be necessary if earnings quality does not improve.