August 3, 2018 / 6:33 AM / in 3 months

Allianz net profit drops, but on track to meet FY target

FILE PHOTO - The company logo of German insurer Allianz SE is pictured before an annual news conference in Munich, Germany, February 19, 2016. REUTERS/Michaela Rehle/File Photo

FRANKFURT (Reuters) - German insurer Allianz on Friday reported a 5-percent drop in second-quarter net profit from a year earlier, pulled down by the sale of its life insurance portfolio in Taiwan, but reaffirmed it’s on track to meet 2018 profit target.

Net profit came in at 1.9 billion euros ($2.20 billion), higher than 1.8 billion euros forecast by analysts in a Reuters poll.

The insurance sector, including Allianz, is expected to bounce back from a rough patch caused by major hurricanes, fires and earthquakes in North America in 2017, the costliest year ever for the industry.

“We remain on track to meet our 2018 operating profit target,” said Chief Executive Oliver Baete.

Earlier this year, Baete said its full-year operating profit would be similar to the 11.1 billion euros the insurer had posted in 2017, or possibly 500 million euros more or less than that.

The combined ratio is a key operating performance indicator which measures costs and claims against premium income. It marks an underwriting profit when it falls below 100 percent.

In the second quarter, the insurer had a combined ratio of 94.1 percent from 93.7 percent in the previous year. The rise was a result of higher claims from weather-related events, Allianz said.

($1 = 0.8627 euros)

Reporting by Tom Sims, Editing by Sherry Jacob-Phillips

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