The Germany-based group said that discussions with remaining plaintiffs and legal authorities in the US are continuing. As of now, it said the total financial impact of the Structured Alpha matter cannot be reliably estimated.

Germany-based Allianz, the major financial services group, faces a number of lawsuits and regulatory probes linked to the collapse in 2020 of its Florida-based hedge funds.

Earlier this week, the group said that it will take a charge of €3.7 billion ($4.2 billion) and warned there could be more losses.

The issues concern Allianz’s Structured Alpha Funds.

“Allianz anticipates settlements with major investors in those funds shortly. In anticipation thereof and in light of current discussions with US governmental authorities, Allianz today decided to book a provision of €3.7 billion in the financial statements 2021. This provision reduced the 2021 group net income by €2.8 billion,” it said in a statement.

“Discussions with remaining plaintiffs, the US Department of Justice and the US Securities and Exchange Commission remain ongoing and the timing and nature of any global or coordinated resolution of these matters is not certain. Therefore, as of today, the total financial impact of the Structured Alpha matter cannot be reliably estimated and Allianz SE expects to incur additional expenses before these matters are finally resolved,” it said.

The firm said that it logged operating profit of €13.4 billion in the 2021 financial year, rising by 24.6 per cent on a year ago. Shareholders’ net income declined by 2.9 per cent to €6.6 billion. 

Allianz’s Solvency II ratio – a standard international yardstick for measuring an insurance group’s capital strength – reached 209 per cent.