(Reuters) — German insurer Allianz S.E. reported earnings battered by higher damage claims, a loss on the sale of its South Korean business and a weaker investment performance in the second quarter, sending its share price down by over 4 percent.

Europe's biggest insurer also said that fund outflows from its troubled U.S. investment management firm Pacific Investment Management Co. had slowed but there was still work to do.

Allianz's quarterly net profit of €1.1 billion ($1.2 billion) was below the lowest forecast of €1.4 billion in a Reuters poll, whose average was €1.5 billion, and down nearly half from the year-earlier quarter.

Allianz took a €352 million hit to net profit from the expected sale of its underperforming businesses in South Korea.

The insurer's shares were down 4.2 percent, at €123, by 1008 GMT, making it the biggest decliner in Germany's DAX index and the STOXX Europe 600 insurance sector index.

Allianz joined a raft of European insurers reporting higher damage claims in the second quarter, which saw extensive payouts for storms and floods, particularly in Germany.

Chief Executive Oliver Baete said claims had caused a €500 million dent in Allianz's quarterly results, while the company's shift toward new life insurance products that tie up less regulatory capital had also hit revenues as sales ramp up.

Nevertheless, Mr. Baete said the insurer was on track for its full-year target operating profit of €10.5 billion, plus or minus €500 million, depending on natural catastrophe events and financial market developments.

"The sun will shine again next time," Mr. Baete said at the end of a conference call in Munich.

Analysts said the quarterly results still looked negative, even after stripping out one-off effects and the impact on markets of the U.K.'s vote to leave the E.U., which hammered insurers' investment results.

"While the strategic direction is on track, this hasn't been particularly visible in the second-quarter underlying earnings, which contain little good news," UBS A.G. analysts said in a note, keeping their "buy" recommendation on the stock.

Pimco progress

Analysts also said they were keen to see whether management changes at Pimco would stem years of painful investor outflows.

Last month, Newport Beach, California-based Pimco made news when it poached Emmanuel "Manny" Roman from Man Group P.L.C., the world's biggest listed hedge fund, as its chief executive officer.

Pimco has experienced several years of cash withdrawals in several of its main funds, including its flagship Pimco Total Return Fund, and co-founder Bill Gross, known as "the Bond King" during his years at Pimco, left in 2014 for Janus Capital Group Inc.

In the second quarter Pimco saw net investor withdrawals of €18 billion but Allianz Chief Financial Officer Dieter Wemmer said 17 billion of that came from a single customer in early April. Mr. Wemmer declined to name the client.

Pimco saw net inflows of €1.1 billion in July, Allianz said. Third-party assets under management rose by 5 percent, to €1.3 trillion in June compared with March, it added.

"If we keep bringing outflows in the right direction, getting to zero is within reach," Mr. Wemmer told reporters on a conference call.

Allianz is also cutting jobs at Pimco to help bring its costs to income ratio down to a target of 60 percent or below, from 62 percent in the second quarter.

"The small to medium-sized personnel cuts announced by Pimco in June will have a positive effect in the third quarter," Mr. Wemmer said.

"Our target of 60 is again within reach," he added.