Allianz books next €1.9bn provision for Structured Alpha claims
Allianz will book an additional €1.9 billion in provisions against the remaining claims from disgruntled customers of its Structured Alpha funds in the United States, the insurer has said.
" Allianz SE believes that this provision booked is a fair estimate of its remaining financial exposure in relation to compensation payments to investors and to payments under any resolution of the governmental proceedings," the German insurer said in its statement.
The provision will be booked to the Q1 books and likely hack net profit by €1.6 billion to leave a mere €0.6 billion in profits attributable to shareholders of the parent.
Group operating profit in Q1 amounts to €3.2 billion, while the Solvency II capitalization ratio stands at 199%, management said in early estimates.
Allianz saw legal claims against its US investment operations rise to $6.3 billion to the end of 2021, the group admitted in the recently-released annual report.
The sum runs well above the €3.7 billion ($4.1 billion) in the first round of provisions which Allianz announced mid-February.
Allianz came under fire from investors in its Structured Alpha funds starting in mid-2020. The SEC and Department of Justice came along with investigations not long thereafter. Claimants charge Allianz with misrepresentation of risk after the funds suffered heavy losses in heavy market volatility early in the pandemic.
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