(Reuters) — Europe's biggest insurer, Allianz S.E., expects to reach the top of its operating profit target range this year, and Chief Executive Oliver Baete said asset management unit Pimco was picking up after two years of investor defections.

Allianz forecast on Friday operating earnings of €10.8 billion ($11.8 billion) in 2015, plus or minus €400 million depending on claims and financial market developments.

Mr. Baete, who took the helm in May, said Allianz's profitability and balance sheet strength were a good base for a strategy review that he plans to complete this year and start putting into effect in 2016.

Of crucial concern for analysts and shareholders is how the insurer will rekindle earnings at Pacific Investment Management Co., or Pimco, which normally contributes around one-fifth of group operating profit.

U.S.-based Pimco saw a further €29.3 billion in third-party net outflows in the second quarter after record outflows and management turmoil last year, including the acrimonious departure of its leader Bill Gross, known as the "Bond King."

"The lower average assets under management and potential for negative market movements gives us concerns over the ongoing earnings trajectory in asset management," RBC Capital Markets analyst Paul De'Ath said in a note to clients.

Mr. Baete told journalists in a conference call that Pimco was on the mend, with improving performance, a stabilized management team and investments in service and marketing.

"We will see continuous and further improvement in the coming quarters," Mr. Baete said, adding that third party investor outflows at Pimco continued to narrow in July.

Pimco said this week it may face U.S. Securities and Exchange Commission civil charges over whether it inflated the returns of a popular exchange-traded fund once managed by Mr. Gross.

Mr. Baete declined to give details but said Pimco was not suspected of harming investor interests in the case.

Allianz would concentrate more on finding the right balance between growth and margins, having previously been defensively positioned, Baete said. He cited Asia and the United States as among target regions for growth but said the company would take a cautious approach on takeovers.

Tighter European regulations from 2016 have encouraged consolidation in the industry.

Mr. Baete declined to comment on whether Allianz would be interested in bidding for British insurer RSA, as some analysts have suggested.