The airline and relatives of the missing passengers will be paid, a spokeswoman for the firm said on Wednesday in Munich, confirming a report in the Handelsblatt newspaper.
The plane, with 239 people on board, has been missing since it disappeared from radar screens on the night of March 7. It departed from Kuala Lumpur en route to Beijing, China.
Allianz is the main party of a consortium which insured the Malaysia Airlines fleet, the Handelsblatt said.
Aviation insurance policies usually include a tight time schedule of when payments have to be made to prevent disputes after an accident, which would damage the image of insurers.
The total sum to cover the missing jet is said to be more than $100 million, although this was not confirmed by the Allianz spokeswoman.
The jet has still not been found.