First quarter net profits at Allianz rose sharply as the German insurance giant climbed out of the doldrums caused by natural disasters in 2011. The CEO demanded political prudence in view of the eurozone debt crisis.
Allianz year-on-year net profit surged nearly 60 percent to 1.4 billion euros ($1.8 billion) in the first quarter of 2012 as claims as a result of natural disasters fell considerably, Europe's biggest insurance company announced Wednesday.
The sharp increase in profit must be seen against a "particularly weak" first quarter in 2011, Allianz said, when earnings slumped. The company was forced to pay out some 737 million euros for insured damage from the earthquake and tsunami in Japan, a cyclone in Australia, and an earthquake in New Zealand.
First quarter earnings in 2012 rose to 30 billion euros from 29.9 billion a year ago, Allianz Chief Executive Michael Diekmann said, adding that "all three of our business divisions contributed to a good start to the year."
"In light of that we are on track to reach our objectives for 2012," Diekmann told the insurer's annual shareholders' conference, confirming the company's goal of a 2012 operating profit of "8 billion euros, plus/minus one billion."
Deficit spending rebuke
At the shareholders' conference, Diekmann rejected calls for more fiscal stimulus to kickstart the eurozone economy, as demanded by the new French President Francois Hollande, who wants a "growth pact" to complement eurozone austerity measures.
Calling for "more restraint" on the part of political leaders, he said that any more debt-funded packages could "overwhelm" the eurozone financial system.
In addition, he warned the European Central Bank (ECB) against continuing its expansionary monetary policy which would lay the foundation for the next "asset bubble" and which already had "damaging consequences" for insurance companies as well as small savers through low interest rates.
"The speedier the ECB returns to a normal monetary policy, the better," Diekmann told shareholders.
In related news Wednesday, Allianz came under pressure from human rights group Oxfam which accused the insurance company of excessive speculation in global food markets.
According to figures presented by Oxfam, Allianz offered commodities' funds worth 6.2 billion euros, which the organization blames for a spike in global food prices in 2011 that plunged 44 million people into hunger.
Allianz was one of the world's "biggest food speculators," Oxfam said, calling on the insurance company to join a growing number of financial institutions which had stopped food speculation.
However, a company spokesman rejected the call, telling German newspaper Süddeutsche Zeitung on Wednesday that the firm had invested "less than one percent" of its assets in financial products based on food, and that those products "didn't bet on rising prices."
uhe/ji (dpa, AFP, epd)