The debacle with hedge funds in the US costs Allianz a total of 5.6 billion euros.
After an agreement with the remaining plaintiffs and with the US authorities was within reach, Allianz set aside another 1.9 billion euros before taxes for the "Structured Alpha" lawsuits in the first quarter, the Munich insurance giant announced on Wednesday.
Allianz had already made provisions of 3.7 billion euros in the financial statements for 2021.
Investors in the United States - including pension funds - lost billions with the supposedly safe hedge funds from Allianz Global Investors at the beginning of the Corona crisis and sued the provider.
The US Department of Justice and the Securities and Exchange Commission (SEC) also got involved.
Despite the additional burdens, Allianz was also in the black in the first quarter, the insurer announced.
A net profit of around 600 million euros remains.
The operating result was 3.2 billion euros.
The new provision has a negative impact of 1.6 billion on the quarterly profit after tax.
It is therefore only 0.6 billion euros.
The dividend policy remains unaffected.
The CEO Oliver Bäte is thus approaching the end of a difficult chapter for the Munich insurer's huge asset management business.
The structured-alpha hedge funds were meant to offer investors protection from a market crash, but suffered hefty losses in the tumultuous early days of the pandemic.
According to their own statements, investors have lost billions of dollars.
Allianz dissolved two of the funds in March 2020 and wound up the others.
So far, it has paid out $4.5 billion to investors.
Investor lawsuits have accused Allianz of abandoning its stated investment mandate and downside protection in its structured alpha funds, and then resorting to risky strategies to recoup losses during market volatility - a move some plaintiffs have accused of described as “extraordinarily risky and self-interested gambling”.Keywords: