Allianz SE (ALV.XE), Europe's largest insurer by gross premiums and market capitalization, Thursday reported a 45% decline in final net profit for the first quarter, mainly reflecting high costs for natural disaster claims, lower realized capital gains and a higher tax rate.

A lower contribution from insurance operations, which was only partially offset by improvements in asset management, also contributed to the decline.

Nevertheless, Allianz said it is on track to reach its 2011 operating profit target in a range of EUR7.5 billion to EUR8.5 billion.

Net profit fell to EUR857 million from EUR1.57 billion, below a Dow Jones Newswires consensus forecast of EUR1.09 billion.

Operating profit, which Allianz considers best reflects its business performance, was down 4.2% to EUR1.66 billion, close to the preliminary figure of nearly EUR1.7 billion and slightly above the forecast EUR1.63 billion. That compares with last year's EUR1.73 billion,

Allianz had already prepared investors for the outcome of first-quarter results last week, when it released a small set of key figures on the sidelines of its annual general meeting. Chief Executive Michael Diekmann told the AGM the profit decline was mainly due to the "intentional reduction" in realized gains on investments in the quarter, a lower market value of financial instruments and substantially higher tax expenditures, which will ease in the course of the year.

Diekmann had also said Allianz expects to receive a bill of around EUR750 million for claims caused by the earthquake and tsunami in Japan, the earthquake in New Zealand and the flooding and cyclone in Australia. Of this, around EUR320 million will be related to the earthquake and tsunami that hit Japan in March.

The actual outcome was slightly lower. Allianz said Thursday that expenses for natural disasters amounted to EUR737 million in the first quarter, of which EUR697 million were allocated to the events in Japan, Australia and New Zealand.

Allianz shares closed up EUR0.65, or 0.6%, at EUR101.65 Wednesday. The shares have gained 29% over the past year, raising market capitalization to EUR46 billion.

-By Ulrike Dauer, Dow Jones Newswires; +49 69 29725 500; ulrike.dauer@dowjones.com