Allianz S.E. has slightly downgraded its profit outlook for the full year after increased claims from natural disasters in North America, the German insurance giant’s finance chief said.

Hurricanes Harvey, Irma and Maria, two earthquakes in Mexico, and fires in California have prompted the insurer to lower its forecast for the year “by a smidgen,” Allianz Chief Financial Officer Dieter Wemmer told journalists on Friday.

Allianz forecast operating profit in the “upper half” of its target range of between €10.3 billion ($12 billion) and €11.3 billion on Thursday. It had previously said that profit would be “near the upper end” of that range.

Allianz posted a 17% fall in net profit in the third quarter to €1.6 billion, with the catastrophes costing it more than €500 million.

Analysts at KBW said in a note that the hit to Allianz was “actually not too bad in a global context” after Munich Re this week posted a big third-quarter loss, while Hannover Re reported a profit after selling its nearly €1 billion stock portfolio.

“Third quarter results were robust, given the massive natural catastrophe events that impacted our property and casualty segment,” Oliver Baete, Allianz’s CEO, said.

The series of natural disasters has rocked the insurance industry after years of muted losses, compounding pressure from low prices caused by fierce competition and low interest rates.

Insured losses from the three big hurricanes have cost the industry around $100 billion, Munich Re said, that would exceed industry-wide losses of about $74 billion caused by Katrina, the hurricane that devastated New Orleans in 2005.

In a sign of their toll on profit, Allianz said its combined ratio rose to 96.9% from 93.5% for its property and casualty division.

Allianz’s asset management business showed signs of strength, with third-party assets under management rising by 7 billion euros to 1.4 trillion euros at the end of the third quarter compared to the end of the second quarter.

But lower performance fees dragged on operating profit at the unit, which includes bond fund manager PIMCO.

Allianz also announced a €2 billion share buy-back program.


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