Allianz Q1 profit hit by Japan disaster

Germany's Allianz became on Wednesday the latest insurance giant to see its profits hit by claims related to a string of natural disasters, most notably Japan's monster earthquake and tsunami.

Allianz Q1 profit hit by Japan disaster

Europe’s biggest insurer said that first-quarter net profit slumped 44 percent to slightly more than €900 million ($1.3 billion) because of €750 million in expenses related to natural catastrophes.

Of this, some €320 million related to insurance claims from Japan’s strongest-ever recorded quake and resulting tsunami on March 11 that left nearly 26,000 people missing or dead.

Japan’s government has estimated that direct damage from the 9.0-magnitude earthquake and tsunami, which also triggered the world’s worst nuclear accident since Chernobyl 25 years ago, could reach $300 billion.

Other natural disasters in the first three months of 2011 included devastating floods and a typhoon in Australia in January and February and an earthquake in New Zealand in late February.

Germany’s Munich Re, the world’s top re-insurance company, warned last month that it would post a loss in the first quarter, saying the natural disasters would cost it €2.7 billion.

Hannover Re, which is also German, cut its 2011 profit outlook. Switzerland’s Swiss Re estimated in March that Japan’s earthquake and tsunami have cost it some $1.2 billion, but warned this could be revised upwards.

In the United States, AIG said in March that claims in Japan would cost its property insurance unit Chartis some $700 million, while losses from other natural catastrophes would hit it to the tune of around $200 million.

Allianz said that first-quarter operating profits were around €1.7 billion, close to the year-earlier level, while also sticking to its full-year earnings forecast.

“Although we spent almost €200 million more on natural catastrophes … we were able to keep our operating profit close to the previous year’s level,” chief executive Michael Diekmann said. “This is testimony to the broad-based nature of our business portfolio. We are on track to achieve our operating profit target for 2011.”

Full results will be published on May 12.


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Merkel says ‘still time’ to find Brexit solution

There is still time to find a solution to Britain's exit from the EU, German Chancellor Angela Merkel said Tuesday, voicing optimism on a political deal over the tricky "backstop" that has stymied progress.

Merkel says 'still time' to find Brexit solution
Merkel speaking to Japanese students at Keio University on Tuesday. Photo: DPA

Speaking to Japanese and German business leaders in Tokyo, Merkel stressed that “on the one hand, time is pressing” and businesses using “just-in-time” delivery processes could not afford lengthy customs procedures.

However, she added: “From a political point of view, there is still time. Two months is not a long time but there is still time, and this should be used by all sides.”

SEE ALSO: 'We must do everything to avoid a no-deal Brexit': Merkel

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Britain is poised to leave the EU at the end of March following a 2016 referendum.

Merkel acknowledged the issue of the unpopular Northern Ireland backstop 
provision was “complicating” Brexit talks.

The backstop is intended to ensure there is no return to a hard border with 
Ireland, but Brexit supporters fear it will keep Britain tied to EU customs rules.

She said the issue with the backstop was a “problem that is precisely defined and therefore one should be able to find a precisely defined solution”.

SEE ALSO: How to swap your German driving license for a British one

“But this solution depends on the question of what the future relationship 
between Britain and the EU will be like and what type of trade deal we sign 
with each other,” added the chancellor.

Throwing the ball into London's court, she stressed: “It will be very important for us to know what exactly the British side sees as its future 
relationship with the EU.”

After meeting Japanese counterpart Shinzo Abe Monday, she urged “creativity” and “goodwill” to find a solution. 

However, she was clear that any solution could only come via the political 
declaration attached to the withdrawal agreement — rather than re-opening 
talks on the actual exit deal.

There are concerns in London that any tweaks to the political declaration  will not be legally binding.

Her Monday comments were seen as conciliatory and boosted the pound as British Prime Minister Theresa May prepares to engage in further talks with EU officials to break the Brexit deadlock as the exit date approaches.

A top EU official, however, sounded the alarm bell after talks with British 

Martin Selmayr, the right-hand man of European Commission President 
Jean-Claude Juncker, said the meeting had confirmed the view that the EU was right to start in December 2017 preparations for a “no-deal” Brexit.

Merkel said relations between Britain and the EU bloc were currently strong and would remain that way. 

“Over the last two years during which we have been dealing with Britain's 
exit, we have worked more closely together than during several years when Britain was a member of the European Union,” she quipped to laughter.