The German insurer Allianz communicated on Friday that it posted a 22 percent decline in net profit in the fourth part of 2017 after a U.S. tax overhaul, a weak U.S. dollar, other one-off costs, and
consequent disasters weighed on earnings.
The profit of 1.427 billion euros ($1.79 billion) cut short of expectations. Analysts forecast a net profit of 1.587 billion euros, concording to a Reuters poll.
For the full year, Allianz posted operating profit of 11.1 billion euros, in borderline with analysts’ expectations of 11.04 billion and the company’s own target.
“The association met its performance targets, maintained an extraordinary level of capital strength and reappeared 3 billion euros to shareholders through share buybacks in 2017,” asserted Allianz Chief Executive Oliver Baete.
“Allianz also signed important strategic strides.”
Last year, insurers had to pay claims of enclosing $135 billion for 2017, the most ever, following a spate of gales, earthquakes and fires in North America.
The series of natural disasters has swayed the insurance industry after years of muted losses, compounding stress from low prices caused by fierce competition and low interest rates.
In November, Allianz anticipate operating profit in the “upper half” of its target range of between 10.3 billion euros and 11.3 billion euros.
Allianz said its linked ratio, a closely-watched measure of expenses to premium income, rose 0.9 piece points to 95.2 percent in 2017 for its property and casualty division.
Baete phrased Allianz would aim to reduce the combined ratio to 94 percent “by the end of 2018.”
In the fourth-quarter, Allianz assumed a charge of 210 million euros from the sale of Oldenburgische Landesbank.
A exchange in U.S. tax reform cost the company about 100 million euros in profit in 2017, but desire add about 300 million euros in 2018, according to a slide production.