FRANKFURT (Reuters) – Allianz set aside 2.5 billion (2 billion pounds) to 3 billion euros for acquisitions in the euro zone this year and will use the funds to buy back shares if no takeover targets are found, Chief Financial Officer Dieter Wemmer told Boersen-Zeitung.
Allianz would like to strengthen its footprint in Spain and France, Wemmer told the German paper in an interview, adding that there were no obvious takeover targets currently available.
In addition to seeking takeovers, Allianz wants to improve its combined ratio, which is expected to remain flat this year, Wemmer said. The combined ratio is calculated by taking incurred losses and expenses and dividing them by total earned premiums.
The insurer’s operating performance could be improved by overhauling businesses such as the company’s operations in South America Wemmer said.
Separately, Allianz has said it does not expect a further outflow of funds from its PIMCO division in the second half, after investors pulled out assets in recent months.
PIMCO will show progress on cost cutting measures when it reports results on Aug. 5, Wemmer said.
Asked whether Britain’s decision to leave the European Union would have an impact on Allianz AG’s business there, Wemmer said there would be consequences if economic activity slows down while the size of the dividend paid to the German parent company had been reduced by a weakening pound.
(Reporting by Edward Taylor; editing by David Clarke)