German insurer Allianz said today that a key measure of capital may fall below the company's target floor level as it faces claims for disruption caused by the coronavirus crisis.
Allianz earlier reported a nearly 30% slump in first-quarter profit.
It is one of many European insurers warning about the outlook as clients claim for business interruption and cancelled events, while demand for car and travel insurance has fallen.
Its so-called solvency ratio dropped to 190% in the first quarter, down from 212% at the end of last year.
Allianz chief financial officer Giulio Terzariol said the ratio may fall below the insurer's 180% limit although this would not be a "big concern".
The company's net profit attributable to shareholders came to €1.4 billion in the first quarter, down from €2 billion a year ago.
The insurer had already flagged the drop last month when it published preliminary figures. It also abandoned its profit target for the full year, blaming economic uncertainty resulting from the pandemic.
A slump in the property and casualty division, which insures homes and cars and against accidental injuries, may contribute to a 10% drop in the group's operating profit this year, Terzariol said.
"Covid-19 has aggravated operating conditions (there)," he said.
Allianz's combined ratio, a measure of profitability for the division, one of its highest revenue earners, worsened to 97.8% in the first quarter, up 4.1 percentage points from a year earlier. Readings below 100% indicate profitability.