Good morning, ladies and gentlemen, and welcome to today's Telephone Conference on the Results of Allianz in the Second Quarter 2021. I hope you're all doing well and/or healthy. This media conference is scheduled for 60 minutes, and as usual, our Chief Financial Officer, Giulio Terzariol, will guide you through our figures and answer your questions following that. But before that, our CEO, Oliver Bäte, will share his view on the results and his outlook on the future of Allianz and to the latest developments. If, in order to the changed schedule, we are not able to answer all of your questions, myself, as the Head of Press Communication, will be available to you afterwards. With this, I hand over to Mr. Bäte.
Thank you very much, Mr. Klotz, and welcome to our press call on the results of the second quarter 2021 and the first half of the year.
This was an exceptional quarter, ladies and gentlemen, and I would like to turn directly to you and, of course, also to our employees and our other shareholders and interest groups out there to give you an outlook on our performance, but also onto our challenges as a company. Allianz today presented once again very strong results, which proved the strength of our strategy, but above all of our company and its capital strength and performance ability. As you've seen in the figures, the demand for our products has remained unchanged. Growth of revenues and profits has increased, but also what you don't see in the figures. In addition to this, the customer numbers and employee satisfaction have continued to rise. Already on the results of 2020, we told you that as terrible 2020 was as a year, customer satisfaction at Allianz and employee satisfaction were high as never before.
This is also something we judge ourselves against continuously, not just on the financial result. The feedback of our customers has remained very strong, but I'll come back to this later. This is not evident, but we need to continue delivering in this context. The employees in property and casualty have once again proved their resilience in dealing with severe natural catastrophes. Secondly, the high demand for our life and health insurance products has not just led to a dynamic increase of revenues against a difficult environment, but we're gaining market share.
And in this, we're generating very sustainable results, which are not driven by one of the facts, but prove a strong performance, which is based on the shift that we've dealt with for over five years in our portfolio, which improves the situation for our customers, for our employees, because it's clearer and it's also better for our shareholders. Also, our asset management business has grown and reached a new high record level in profitability. So, as you can see, across all business segments, we had high dynamics when it comes to profitability and capital strength. And in spite of enormously difficult framework conditions, so we don't benefit from any one of the facts or from the release of any reserves. All of this is the result of the hard work of our colleagues.
Our capital strength that I've mentioned before is extremely strong with a solvency ratio of 206%, and we've continued to strengthen that. That is why we expect that our operating result for the year 2021 will be in the upper level of our target bandwidth, and therefore the share buyback that we initially promised of EUR 750 million, which we had to stop temporarily due to COVID, we've now gone back to that to keep the promise that we've given our shareholders, because we don't just give promises to our customers and employees, but we also promise reliability to our shareholders.
And we wanted to keep the promise that we have given with the share buyback, and we're able to do this, and we don't have to bend ourselves in any way, but our capital or our strength of generating capital is so large that we could easily do this. So, before our CFO, Mr. Terzariol, will speak in detail about the results, I would like to get a little more into depth in three areas. First of all, I would like to speak about natural catastrophes, the natural catastrophes which we've all experienced, and they will affect the results also in the third quarter, and of course, also our organization and our customer contact.
Then I would like to report on what we do regarding our employees, especially when it comes to vaccinations, because we think COVID can only be controlled if we're able to vaccinate our population across the board and not by locking them in. And thirdly, of course, I also have to talk about the context and the perspective of our documentation regarding the renewed valuation of the risks around the Structured Alpha funds, which we've given at the beginning of the week. I can only do this to a restricted framework due to legal reasons. You know that there are strict rules in U.S. legal court cases on what you can say and what you're allowed to do, and I know you're experienced in this and will understand this. Let me start with the natural catastrophes.
Myself, I hail from Cologne, 20 minutes away from Euskirchen, where a terrible situation occurred, including the fatalities. I'm closely linked to this. For me, the situation was easy. It was only my basement, which was flooded, but for many, their houses and all of their goods were gone, and they won't return that quickly. I'm proud of the role Allianz has played in the restriction of damages, but especially as a partner in dealing with the human challenges in place. I would like to especially thank all our agents for their ceaseless efforts, and I want to compliment for that. Bernd, the storm Bernd was a catastrophe not just in Germany, but also in the Benelux countries, and also for AGCS was affected by this. At this point, we assume that we'll pay out around EUR 900 million to our customers only from this storm Bernd.
We act quickly and without any bureaucratic hurdles. We sent more than 200 agents into the region to support our customers. We make upfront payments up to EUR 10,000 per customer. We've sent many electricity generators and drying units and also generators for people who don't have any electricity. Allianz has donated more than EUR 1 million to the emergency organizations and has created an account into which Allianz employees can donate themselves, and I myself will, of course, do this as well. And as a sign of solidarity, we've created an Allianz Direct emergency fund of up to EUR 1 million, especially employees of whom we have quite a few in this region will be supported by this fund. And this is important. That's what we're here for. Many ask us, Allianz present there. And let me repeat, it's not just a matter in Germany, but also neighboring countries.
Already in the first quarter, we had natural catastrophes, not to this large degree, in other countries as well. And this has continued to grow, this tendency. For years, we've talked abstractly about climate change and that it needs to be handled. And now it becomes clear that we need to do something and not just deal with claims, but we need to avoid damages and need to avoid these catastrophes. The second topic I wanted to talk about today is COVID-19. Many of us will go on vacation, and after one and a half years, we have the feeling it's now time to stop with all of that. But here in Europe and in Germany, we're in a comparatively luxurious situation because the vaccination campaign at the beginning showed great results. We're always criticizing ourselves, but we were successful in that.
At Allianz, as a global company, we support the vaccination campaigns in all the countries that we're present in. Allianz, in 15 countries, has started its own vaccination campaigns. Wherever we can do this, we will do this. We haven't just made offers to our employees, but also to their families and next of kin. In our Allianz Vaccination Center, so far, 23,000 people have been vaccinated for the first or second time. Also here at headquarters in Munich, Königinstraße, people are being vaccinated on a daily basis. Please help us, help us to convince all our employees that vaccination is the only reliable method of getting a grip on COVID-19. That is really important to us. Now, the topic of the ad hoc publication, which we published regarding the reevaluation of risk in connection with the Structured Alpha funds on Sunday.
It was a terrible week for us, especially for me personally, but due to this changed evaluation, we had to reassess the situation, especially because of the investigations of the Department of Justice. In view of the pending litigation and investigation, I cannot go into detail, but please be assured that all the underlying facts are being assessed in detail, in minute detail. We were forced to make this ad hoc publication, which you saw on Sunday evening, and we're really sorry about the short-term effects of this step because it had an extremely negative effect, of course, on our stock price. We didn't just have to act in line with laws here, which are very strict both in the U.S. and in Germany, but we also believe that early communication is of absolute necessity and fits our basic principles of full transparency.
There's often the will to push away topics like these if it fits, but this is not our business approach. So, with a heavy heart, we decided to bear the negative consequences, short-term negative consequences in order to protect our company over the long term. So, a decision to inform the market immediately was based on the legal assessment, but it also reflects our framework of values and our culture. It's in the interest of our shareholders and the company to fully respect the integrity of the legal proceedings and to fully cooperate. We've cooperated right from the beginning, so from the beginning of the investigation in a fully active way, and we've not just been reactive, but we were part of the investigation and we're a partner in this, both with the Department of Justice and the SEC.
When it comes to these civil lawsuits, which we informed you about last year, we will continue to defend the interests of our shareholders with discipline and in a very structured way. But it's important to put this last publication into the context of the strong global activities of Allianz and our successful operational balance sheet and our leadership principles. This event and what's going on there does not have anything to do with the performance ability, culture, or the ethics of Allianz Group. As investors, we understand the anger of our customers that the investment into Structured Alpha funds didn't lead to the results they had expected. You could argue for a long time that this is a high risk, that these were high risk investments and so on and so forth, but we have to accept our customers see this.
As a customer, as a company that's based on integrity, we don't measure this just in financial results, but the trust of our customers is the most important point. Please understand that in view of the pending investigations, I cannot go into detail on this, but please rest assured once more that due to the underlying processes, we're in close context with the authorities who have had a very professional approach in their dealings with us, and we fully cooperate with them. Just to remind you, the SEC came in once a claim was filed, and we cooperated with them right from the beginning, and more than one million documents and emails have been reviewed.
And now, unfortunately, we had to realize just a very short while ago that this will lead to certain implications that we will report on in the future, but it's most important to consider what we can learn from this. So, we had the CEO of Microsoft as our guest in a leadership meeting just recently who said, as a global organization, we have to come from organizations who think they know everything to organizations that learn everything. And this holds true for us as well. The second point that is important, ladies and gentlemen, is that our energy and our efforts to understand this event goes far beyond our cooperation with the authorities. Allianz has highly actively dealt with this. When we learned about the development of the fund last year, we introduced a multidisciplinary team across functions with the support of renowned external legal and economic advisors.
Together with them, we went through intensive assessments of the product performance. In the recent past, in cooperation with the authorities, we went through forensic assessments to understand the root causes and to introduce any necessary improvements to identify them and implement them wherever necessary. This just to remind you again, also looking at the business of Allianz Global Investors as a whole, we acted early on, and let me remind you of this. After announcing our strategy, Simplicity Wins in 2018, at the end of 2019, it became absolutely clear to us that we had to adapt the business model and the organization of AGI and set them up in a fundamentally new way. At the end of 2019, beginning of 2020, we radically rejuvenated our leadership team there and set it up in a leaner way. We also created the leaner product offer.
At the beginning of last year, we already said that more than 40% of the investment strategies were to be done away with and simplified. 93 of the 185 strategies have already been closed, and the next 91 will follow in the next 12 to 18 months. These efforts to simplify are reflected in many ways, and I would like to give you some examples on this. Especially, I want to say that Structured Alpha is only a small part of what Allianz does and also of what Allianz Global Investors does. These products are not representative in any way for our investment success.
In 2019, we were still very dissatisfied with the investment performance of AGI, and in the meantime, more than 77% have outperformed the benchmark on a one-year view and 69% on a three-year view, and 48% of the investment is in the top 10% of the Morningstar rating. So, this is a great result when it comes to the investment results of AGI, and this is also reflected in the feedback of renowned rating agencies, which Allianz Global Investors has reached the top quartile and is seen as a quality leader in many segments. Now, there were questions why we haven't recognized any provisions yet. We can't do this. I mean, I used to be a CFO, so I understand this topic, but at this point in time, we cannot really assess the results this will have.
But once this has been done, we will, of course, form provisions to the best of our belief and knowledge to protect Allianz against any negative effects, which makes it sure that our shareholders can profit from the EPS. This event will leave its traces, but it will not deviate Allianz from its successful path. Against this backdrop, the event around Structured Alpha does not affect our ability to hand back capital on a reliable basis or to invest into future and growth. Given that we continue to manage our capital in a cautious way and don't have any better opportunities to use this, and the share buyback announced today is clear proof that we don't just have these opportunities, but that we will also use them.
We will keep a cautious balance between investments into innovation and growth on the one hand side and capital returns whenever we cannot successfully invest, and we can afford both of those strategies compared to many of our investors. Towards the end, we have a dividend policy that, and the minimum is always the last dividend, and that's never put into question. At the end, I would like to say something about asset management and some because many people ask where does this stand. You can see it in our figures and the strong development of this business segment. Our asset management is an important part and pillar of our value proposition to our customers, to our global customers, and its importance will grow in the future.
On a global basis, AGI has developed great, and in the past, we had EUR 17 billion of net inflows in all important asset classes, and that's great. Now, I would like to come to the end of my remarks and hand over to Mr. Terzariol. And before I do that, I would like to thank the colleagues at Allianz Global Investors for their work and for everything they have to deal with now. Your board of management is at your side. Thank you.
Thank you very much, Mr. Bäte, ladies and gentlemen. Soon, Mr. Terzariol is going to explain the figures. Then we will have a Q&A session. During the telephone option, please press asterisk five, and if you're connected via web audio, you press the talk audio button. Mr. Terzariol.
Thank you very much, Mr. Bäte, and good morning.
As always, I'm happy to present the results of Allianz, and on page three, we start with an overview of the figures of the first half year, and as you can see yourselves, the figures are really good, so results have increased by 5%, and all segments have contributed to that growth, so the operating profit is EUR 6.7 billion, which is largely increased versus the previous years, much better than our expectations of EUR 6 billion if you look at our forecast of EUR 12 billion for the year divided by two, and also, with regard to the operating profit, all segments have contributed to this good development, so the annual surplus is at EUR 4.8 billion, which is a very good result in the net income, and also all operational KPIs go into the right direction.
The combined ratio has become much better than in the previous year, which basically corresponds to a target of 93%. The new business margin has also increased, and also the value of new business is developing quite dynamically, and also asset management cost-income ratio has decreased, and the third-party net inflows have increased in PIMCO and AGI. The quality is very good. The quality of the figures are very good. So, the figures are very good, and the quality of the figures are excellent. On page five, you see the overview for the second quarter operating profit. It's more or less a copy and paste for the figures of the six months. So, total revenues have increased by two-digit amounts, and all segments have contributed to that growth. And in life health, we see a growth rate of almost 20%.
In asset management, we are even above 20%, and also in P&C, we see a good growth rate of 3.6%. So, the operating profit is EUR 3.3 billion, which is much above the previous level. And if you remember, it is also on the level of the first quarter 2021. So, basically, we are running on the level of EUR 3.3 billion under these market conditions per quarter. So, the net income is EUR 2.2 billion, much better than in the previous year. And also in the second quarter, in all operational KPIs, we've seen an improvement as regards the combined ratio, the new business margin, and also related to the cost income ratio. So, that's definitely a strong picture for the second quarter. Now, on page seven, the solvency ratio continues to be strong with a level of 206%.
Solvency ratio went down by four percentage points versus the level of March, but that was expected and was on the basis of the repayment of the second liabilities that we made in July. But also, we have to contribute that and consider that in the Solvency ratio we read. So, we expect a reduction to the good level of 206%, and the sensitivities have remained unchanged versus the sensitivities that we had for the month of March. So, that's important. On page nine, you can see the organic capital generation is very good. Before dividend and tax, the organic capital generation is at 8%. So, if we deduct the dividends and taxes, we are 3% above our expectation, which was rather 2% per quarter. So, we are slightly above that, and the expectation for the year was 8% capital generation.
Now, we would expect a capital generation of 10% plus. Otherwise so, when you look at capital management and capital management action, you see the effect of the dividend. So, if you deduct the dividends, these are the future dividends that we pay next year. And also there, we've seen the effect from the repayment of our subordinated liabilities. So, it's a good solvency ratio, which is good in order to also get down our subordinated liabilities, and that gives us a certain financial flexibility as regards the future. Now, I'd like to come to the different segments. So, let's start as always with the P&C and the growth rates in the P&C segment. As I said, the growth rate is 3.6%. It's good, and we've seen beneficial developments in Germany, in Australia, in Eastern Europe.
And also, you can see we're getting up in Allianz Partners, which is due to the case. Obviously, the premium of the travel insurances were quite low. Now, we've seen a recovery. We're not yet on the level of 2019, but in particular, in the U.S., we've seen a recovery. So, we've seen negative growth rates. Basically, it's based on restructuring costs, the case, for example, in HECS. So, we intensively carried out refurbishments last year, and we do see the effects, and also in Spain. So, we see the profitability, and so we are about to lose market shares because we want to maintain the profitability. So, generally, for the group, we've seen a good growth in the first quarter. Growth rates for P&C were still negative, but now this turned into a positive amount and turned.
On page 13, we are showing, as usual, the development of the operating profit. The operating profit went up by EUR 200 million versus the previous year, which is due to the development of the combined ratio. The combined ratio went better by 1.6 percentage points with various effects. First of all, the nat cat impact was quite high in the second quarter 2021 versus the previous period. We also see that the loss ratio went up, but that was because of the expense ratio went up because of the special effect. If you would take out the special effect, actually, the expense ratio would be better in this quarter than the expense ratio in the previous quarter. Then we see the runoff ratio is also positive and much better than in the previous year.
But also, we need to remember in the previous year, we had the COVID impact, when this year the COVID impact is practically neutral. So, when you add up everything, the performance in the second quarter 2021 is more or less on the level of the previous year. And when you normalize that, we're good for the 93% combined ratio. So, basically, we've seen for a few quarters, this is the underlying performance, and clearly, there's always movement upwards and downwards. It largely depends on how the nat cat impacts are moving. And also, the target of 93% is clearly envisaged and really clear. On page 15, we are showing the individual OEs in Germany. You see a combined ratio which is higher than our expectation, but clearly, this is related to the nat cat impact, and this was really high in Germany.
If you adjust these figures and the net cut impact, the underlying performance is really good. Then we see a number of OEs with really good figures that relates to England, France, Australia, and France, and particularly Italy and Eastern Europe and Spain. And also in Latin America and Turkey, the combined ratios are above 100%, but you have to consider that the interest level is much different in these countries. So, having a combined ratio above 100% is reasonable, and still, we can have a good return on equity in HECS. The combined ratio is at 97%. So, we're still on track, and in order to reach our target of 98%. And what you can also see is the combined ratio in Euler Hermes. It's low with 63%, but that is not a big surprise because basically, there are no insolvencies in that time.
And that's why, since there are no insolvencies and bankruptcies, the figures are very good in Euler Hermes. And also, in most countries, we're going to have the state support. In most countries, until today, we were still in the state support, but nowadays, the situation has changed, and that's why we're going to go back into the future out of our own power. On page 17, the investment result has actually increased. This might come as a surprise. You might expect that the capital result, investment result, might go down because of the interest environment, but what we've always seen in the second quarter is a recovery of the dividend, the dividend from private equity funds, which explains why the capital investment result is strong and better than in the previous year, and it's also better than our expectations.
We assumed from the presumed assumption that we have an investment result of less than EUR 600 million per quarter, which is a good development. On the whole, this is a solid combined ratio, a solid performance in our investment result, which leads to a good result in our P&C picture. On page 19, I'm particularly proud of our results in the life health segment. First of all, you see the cash value of new production went up by 17%, and we have a few special effects. We have a new agreement of a large agreement in Italy, plus in France. We're offering new solutions for regular customers, but also, when you adjust by these figures and the special effect, the growth rate is still at 36%.
You might say, "Okay, that's simple because last year, the premiums were low," but I can tell you, production is higher than what we've seen in 2019. So, definitely, this is really a good level, and that also, we had massive product changes, which is good. The new business margin was 3.2%, and all segments have contributed to the improvement of the new business margin, and all segments have grown. That's definitely a strong picture. And what is also better from our perspective is that all segments have worked on their products considerably based on these figures. I would say we're doing fine, and clearly, this is really promising for the future. When we look at page 21, also, the P&C looks very good with an operating profit that is excellent at EUR 1.3 billion, which is 3% better than in the previous year with 1.3 billion.
The loading and fees, they're increasing, which is important, which is also proof of our change. The investment margin is better than in the previous year. Capital markets are very strong and stable, and that clearly has a good effect on this key figure. All business lines show an improvement. On the whole, we've seen an operating profit of EUR 1.3 billion. Our expectation would have been EUR 1.1 billion, but that's also the second quarter in a row, so that we are rather at EUR 1.2 billion or EUR 1.3 billion. We would expect, once the capital market conditions stay, that we would see a similar performance in the future, which is also a good reason why we have lifted our forecast for the group. On page 23, you see the new business growth with the various OEs.
Generally, you can see here an improvement or at least stable new business margin with a few exceptions. With the operating profit, I think what is positive, what you can see is the development in the U.S. with an improvement as compared to the previous year of 94%. You always have to consider once volatility is higher than the profit in Allianz is slightly lower. Now, we can see the other side. That's why we see good performance in the U.S. In Italy, we continue to see a good development because the unit-linked insurance are really developing nicely in Italy, Asia Pacific. As always, we've seen a positive direction of the profit, which is a growth market, and we definitely see successively that our operating profit can be increased.
It's a good picture with our life and health insurance, and it's based on good quality, talking about quality, and you can see on page 25, our investment margin is very good, which is at 21 basis points, which is better than the previous year and also better than our expectation. What is also important to note, we keep reducing our guarantee, which is very important for the stability of the key figure for our future. As you can see, the 21 basis points have been reached, although the net harvesting, so the realized gains net of impairments, at zero. Basically, this gives a good quality of this key figure. Basically, that is driven by the current yields and net and the guarantee.
Also, when we also take the policy participation, it's not only by the figures, but it's also all about the quality of the figures. It's very good. Good results in life and health. Now, on page 27, we come to asset management. Actually, in the second quarter, we have records in assets under management with EUR 1.8 trillion assets under management for third parties. But also, what is more important is that all asset classes or regions contributed to that success. We can see everywhere that our assets under management were able to be increased, which also is a sign for quality. If we go to page 29, where we see the third-party net inflows, on the whole, we have EUR 26 billion third-party net inflows. EUR 17 billion come from AGI, and EUR 9 billion come from PIMCO.
First of all, in AGI, that was the highest level in the history of AGI, which is definitely not the first quarter AGI has good inflows. So, over the year, AGI has EUR 30 billion net inflows, which is very good. The PIMCO figure might look low versus compared with the track record of PIMCO, but there was an outflow of a bid mandate. But this mandate also was linked to very low fees. So, that's why this is no big effect or impact on the profitability or income of PIMCO. When you adjust these figures by PIMCO by the special effect, the net inflows would be at the traditional EUR 25 billion that we've seen for various figures. So, on the net inflows, we see a good quality in that respect. So, we have net positive development in all asset classes and in all regions.
What is also important to note? There's more growth in the so-called mutual funds, which is several accounts. The mutual accounts are mostly more profitable, which is also a good development. And also, one more comment on the net inflows. When you look at a rolling consideration for the past 12 months, under a total, we have seen a total of EUR 120 billion of net inflows, which is definitely a good development. And on page 31, of course, if net inflows over time are positive and if the capital markets as a whole are stable, then our revenues also grow. So, we had a growth rate of 16.2%, and both PIMCO and AGI contributed good growth rates. The growth rate is the consequence of two effects, basically the net inflows.
The assets under management, also due to the market developments, have increased, but we also need to take into account that in our case, the foreign exchange consequences were negative, and then the fee margin has also improved. The profitability of assets under management has increased, and this combined leads to the positive development of our revenues. On page 33, of course, if revenues go up, the operating profit will follow. In this case, overproportionately, there is a certain operational lever in asset management, and that's why we were able to increase operating profit by 30% overall. If you adjust this for foreign exchange effects, you come up with a growth rate of close to 40%. PIMCO contributed to this, but AGI as well with a growth rate of 50% and also an improvement of the cost-income ratio of close to 7 percentage points.
So, very positive development overall with an operating profit of over EUR 800 million. With this, of course, we're well on track to reach our guidance of EUR 2.8 billion for the year. And for the six months, we're now at EUR 1.6 billion operating profit. So, the starting position is quite good because the level of assets under management is higher than what we used to have on average over the first six months. So, if markets remain stable, we will finish clearly above the EUR 2.8 billion operating profit. Page 35, the corporate segment. Here, I just wanted to mention that the operating result was better than in the previous year and also better than we had expected. And on page 37, then as usual, we come to the non-operating items and to the shareholders' net income. There are no points that stand out amongst the non-operating items.
The impairments were very low. That's got to do with the strength of the financial markets that we currently see. The restructuring expenses were on par with the previous year's level, and the effective tax rate at 25% is in line with our expectations, so all in all, the strong operating profit and the positive development in non-operating items led to a shareholders' net income of EUR 2.2 billion, which is 45% better than in the previous year, so to sum this up, the results for the second quarter and also for the first half of the year 2021 were extremely good with an operating profit above our experiences and also a good shareholders' net income. Our Solvency II ratio has remained on a strong level, and that's why we've lifted our outlook to the upper half of the target range.
And also, the promised share buyback was announced, as you've heard before. And I would like to thank all of our employees for the great efforts in reaching these results. Thank you very much.
Thank you very much, Giulio. And we'll now come to the round of questions and answers. If you want to ask a question, please press star or asterisk five and web audio talk request task in the upper bar.
The first question by Michael Fleming of Börsen-Zeitung.
Good morning, Mr. Bäte, Mr. Terzariol, Mr. Klotz. One question on the fund business in the U.S. Mr. Bäte, you hinted that this week you'd come to new results in your assessment. So, does this mean that severe errors were made? What does this reflect? And then secondly, this will be reflected, of course, also in provisions in the future. When can we expect these provisions to be recognized?
Mr. Fleming, thank you very much for your questions, and I can well understand them. But unfortunately, the legal department has told me in Fund 22, if you know this, that we're not allowed due to the strict legal requirements in the U.S. when it comes to pending investigations of the Department of Justice. So, this is about the DOJ investment. We're hardly allowed to make any comments at all. What I can tell you is, and I would like to repeat this, that from the very beginning, as soon as these claims were filed together with the SEC, we've worked on these topics for over a year around this question, and the main question is whether the product performed as was promised. This is the basic question, and we went through this quantitatively up and down.
And what happened over the last week towards the weekend was that the legal assessment of what happened within this fund company changed and that not everything went perfectly well in the fund management. But that's independent of the question of whether the product was good or bad. That's important. So, one thing doesn't have to do with the other. And when it comes to the point in time, of course, we want to do this as quickly as possible regarding the provisions and as clearly as possible. But we also want to protect our shareholders, the American litigation situation. So, we need to remain cautious here, and we want to do everything right. And in the interest of our customers, we need to maintain the balance here. And this is everything I can say at this point. And I can only ask you for your understanding.
I can assure you that I would like to say more about this.
May I ask a follow-up question?
Of course, Mr. Fleming.
In the interim report, it says that Allianz wants to defend itself against these claims. Has this changed over the weekend?
No, no. There are two perspectives. The one question is whether the product has done what it was supposed to do. And the second question, whether everything went right in the management of the fund. These are two different elements. And the court case refers to the first question, and I can't say more than that. And I would ask everyone else to respect this because otherwise, I'll be in trouble. And there's a lot I have to do anyway, so I don't need this.
Thank you, Mr. Fleming. The next question by Stephan Kahl of Bloomberg.
Good morning, gentlemen. One follow-up also on this complex of questions. Mr. Terzariol this morning said Allianz was looking at the US business of Allianz GI in detail, and the question is whether there are any other strategies that you might be looking at. Because in the past, as Mr. Bäte said, not everything went completely perfectly in the fund management. So, are there any other cases that might be similar when it comes to risks?
I can answer this question, says Mr. Terzariol. This is a special product, and this product makes up less than 1% of our third-party assets under management. And this is the product which is in the focus now, and there haven't been any other incidents like this.
Mr. Karl, this question is great, says Mr. Bäte. I would like to add on this point.
With the simplification strategy at the end of 2018, 2019, we realized that we had to fine-tune this year. And I would like to repeat what I said before. The team of Mr. Pross at the beginning said that AGI want to reduce 40% of the investment strategies because they are too complex and too difficult, and they delivered on half of that. But this effect now was an extreme special case, but we're not that confident saying this could not happen anywhere else. But we're consistently working through this. We don't have any signs at all that something similar has happened or could happen. But nevertheless, we'll take this to once again check everything in fine detail. Thank you very much for the question.
Thank you, Mr. Kahl. The next question by Olaf Storbeck of Financial Times.
Good morning, and thanks for giving me the floor. Mr. Bäte, I have a question on the U.S. topic. Could you tell us whether any employees have been sanctioned internally or whether you consider this? Has anyone been fired, or are the people responsible still in operating business?
Says Mr. Terzariol, we cannot make any statement on this. We don't have any further comment, but we will see during the investigation what consequences we have to take. But right now, we cannot give any comment on this. We cannot make any comments on that.
Okay, thank you.
The next question by Herbert Fromme of Süddeutsche Zeitung.
Good morning. Two questions. Did I get this right that you don't make any statement on the result of the previous year and what you've said? Is this linked to the procedures in the U.S.?
And the second question, maybe you could explain why everyone in times of low interest rate environment is in trouble and Allianz posts increasing profits. There are people who say that this is due to the fact that Allianz, when it comes to distributing the overprofits above guarantees, has increased this to the benefit of shareholders and that only 50% of the costs will be passed on, which would be comparatively low. So, is this the case? So, will you gain furthermore on the detriment of your customers in life insurance?
Okay, first question, says Mr. Terzariol, the effect on the results of the effects of what's going on in the U.S. Here, you have to differentiate between shareholders' net income and operating profit. The operating profit reflects the performance, and any burdens that might stem from the U.S. court cases would not be reflected in the operating profit.
If we had to recognize anything, you would see this in our shareholders' net income, so the underlying performance will, of course, not be affected by any burdens from this AGI story, but the shareholders' net income potentially could be negatively affected, then the topic why we have good results in life insurance, this got more to do with the fact that for years we've taken a close look on our risk profile, and I can tell you that I joined Allianz 20 years ago, and at the time, we had developed internal risk capital assessments, which allowed us to adapt products quickly to changing situations, and I think if you've done this over the years, of course, you will get a risk profile that improves. Let me give you one example.
In the U.S., for example, we've decided not to do variable annuities after a certain time, and we also decided not to do fixed annuities. We focused on the products where we thought the performance for the customers, but also the performance for shareholders would be best. And so, the good results we show now is due to the decisions we've taken on the products we want to use and that we want to be in. And it's got nothing to do with the fact that we don't offer any value to our customers. And that even say, if we have such a strong protection, it means that customers value our solutions.
One follow-up, the profit target and the shareholders' net income has been done away with for the year
Answer is the goal for the operating profit was revised upwards as announced today.
So, we expect to come out with the upper half of the target range in operating profit. And when it comes to shareholders' net income, we have to wait and see. There is always a certain uncertainty due to market changes. So, we always give a guidance regarding operating profit, but we don't give a guidance for shareholders' net income. And there is automatically more volatility in that, which also might stem from standard market movements. Thank you very much.
Thank you, Mr. Fromme. We would now switch to the English conference, and we'll accept the question by Ben Dyson of S&P Global Market Intelligence. Please go ahead. Wir scheinen ein Audio-Problem zu haben. So, there seems to be an audio problem. Open. Gut, wenn diese Leitung if this line doesn't work, okay, so we lost Ben.
Then we go to the next one, and it is David Walker from InsuranceERM. Okay. Diese englische Leitung scheint nicht zu funktionieren. So, the English line doesn't seem to work. Dann würden wir ja. Wenn Sie Fragen stellen möchten, stellen Sie bitte. If you want to ask questions, Star five. Wir haben noch eine Nachfrage von Michael Fleming von der Börsen-Zeitung. Dann bitte. Mr. Fleming, the floor is yours.
Yeah. Then I'll seize the opportunity to have a follow-up on the fund topic. Are there any discussions with the plaintiff regarding a settlement, and do you plan any talks in this way or any settlement out of court?
Well, I can only ask you for understanding. We cannot talk about the regulatory going on and also not about the litigation procedures. So, currently, we cannot make any statement on this. I'm sorry.
Okay, thank you.
Mr. Fleming, in general, says Mr. Bäte. In general, of course, we have an interest independent of these litigations to deal with these topics as quickly as possible to focus on the future. So, you can assume that everyone here, including our lawyers, is doing their best to get this done with. Do we have any other questions?
Mr. Fleming, has this answered your question?
Yes, thank you very much. Thank you very much, Mr. Klotz, Mr. Bäte, Mr. Terzariol.
So, we have one last question that's come in by Michael Watzke of Deutschlandfunk. Mr. Watzke, the floor is yours.
Good morning, Michael Watzke of Deutschlandfunk. I hope you can hear me.
A question on Bernd, on the storm regarding the cost that Allianz assumes for the rest of the year and the general question also that I've heard about in the insurance business, that natural catastrophes, even though they are expensive, in the end, they are positive, and I'm not being cynical on this, positive for insurance companies because they increase the business volume. Is that the case? And then the discussion about obligatory insurance in or compulsory insurance that has been discussed amongst the politicians. D o you see this positive because it means business for Allianz, or is this negative for you because the business might be regulated and you could not ask for the money that you would like to get?
Regarding the storm, Bernd says, Mr. Terzariol, the burden of Allianz, the net burden that is after reinsurance will be at close to EUR 400 million.
If you look at the gross burden, and that's the gross burden for all of Europe, not just for Germany, then we're talking about our estimate rather is at around EUR 900 million, and these are the figures. Now, when it comes to natural catastrophes and whether they're good for insurance, you say you don't want to be cynical, but nevertheless, it seems a bit cynical, so we're certainly not delighted when there is a natural catastrophe, and we're never glad about this, and of course, you could say potentially it might lead to a higher customer demand, but I wouldn't say that once there is a natural catastrophe that we think, "Oh, that's good, we will make more profits in the future." This is certainly not the approach that we have or the thoughts that we have.
When it comes to compulsory insurance, we're not necessarily in favor of compulsory insurance because we believe there needs to be a certain leeway and freedom. And we also mean it could have negative implications in the sense that people might have less incentive to take certain preventive measures. But what we certainly want to do is to discuss together with the governments about solutions. There are solutions in other countries like Switzerland, for example, and also in England, which we might be able to take to Germany. So, these are clear considerations which we've entered in together with our competitors, also with the association of GDV, and that we can also discuss with the governments. But just introducing compulsory insurance from our point of view would not be the right answer. I think we have to take a more global view at the topic. Thank you very much.
Thank you very much, Mr. Watzke, for your questions. So, we have to finish on time. So, thank you very much for your participation and for your questions. And if you still have any questions that we haven't been able to answer, please send them via email, and I'll hand back to Mr. Bäte for his final words.
Thank you very much, ladies and gentlemen. Thank you very much for having been with us this morning. And I would like to tell you some personal words after this terrible announcement, which we had to make on Sunday. I mean, the announcement was not that the publication wasn't that terrible, but the result for share price, of course, was, and there were questions of what was going on at Allianz. We're only used to good news from them. Do they take care of the customers?
And though I didn't like all of the feedback, including the personal one, there's one thing you can believe. We listen to criticism or feedback as Allianz. We don't push this aside. We don't ignore this, and we try to learn from this. So, if we only continued like we've done before, this would certainly be the wrong approach. So, we'll take this situation to check whether we can improve things. And that was important for me to mention. Thanks and enjoy the rest of the day.
Thank you very much, Mr. Bäte, also from my side. Have a good day. And for all those going on vacation, enjoy your vacation, and we'll hear you and see you again on the third quarter. Thank you very much and enjoy the rest of the day.