(Reuters) — Outflows of customer funds from U.S. investment manager Pimco will hurt earnings this year, and it is not yet possible to predict when flows might turn positive again, insurer Allianz S.E., its owner, warned on Wednesday.

Pimco, which contributes more than a fifth of the German insurer's operating profit, saw record outflows and management turmoil last year, including the acrimonious departure of its leader Bill Gross, known as the "Bond King."

Investors have continued to withdraw money this year, albeit at a slower pace, and Pimco's flagship Total Return Fund has lost its title as the world's biggest bond mutual fund.

"In asset management, the outflows from last year will burden the result in 2015," Michael Diekmann told Allianz's annual shareholder meeting on his last day as chief executive of Europe's largest insurer.

Mr. Diekmann said client outflows were unavoidable with a prominent change of leadership such as the departure of Gross, who was the well-known public face of Pimco — the firm he had co-founded in 1971 — before he quit to join Janus Capital Group in September.

"It is unfortunate, but more important is that we have the right setup for the future and are not dependent on individuals," said the outgoing CEO, who is being replaced by Oliver Baete.

Allianz expects its asset management business to deliver between €2.2 billion and €2.8 billion ($2.46 billion and $3.14 billion) in operating profit this year, compared with €2.6 billion last year and €3.2 billion in 2013. Pimco represents the vast majority of the business, which also includes Allianz Global Investors.

Sting reduced

While customer outflows are continuing at California-based Pimco, the weakness of the euro relative to the dollar is taking away some of the sting for Allianz, which reports in euros. Third-party assets under management rose to €1.4 billion ($1.50 billion) at the end of March from €1.3 billion ($1.57 billion) at the end of December.

Jay Ralph, the Allianz board member responsible for asset management, said it was not yet possible to predict when there would be net inflows of funds at Pimco.

A fund manager at a large Allianz shareholder said he did not expect to see net inflows yet in the second half of the year.

"No one is bullish on Pimco for the moment, so that wouldn't be a surprise for the market," said the manager, who is not authorized to comment publicly.

The most important thing Allianz can do is keep fund performance at a healthy level, which should eventually reverse the flows. "But it might be a slow-burn process," the manager said.

Mr. Diekmann used the shareholder meeting to report a strong rise in first-quarter profit and said he was confident the insurer would reach its earnings target in 2015.

Allianz's shares were up 2.3% at 1450 GMT, outpacing a flat STOXX Europe 600 insurance index.

The insurer will report detailed results on May 12.