German insurer Allianz SE said Monday it posted a net profit in the third quarter from a loss a year ago due to improved revenue in life and health insurance and financial services.
Allianz, based in Munich, said net income rose to euro1.32 billion ($1.96 billion) from a loss of euro2 billion in the third quarter a year ago.
Revenue in the July-September period rose 4.3 percent to more than euro22 billion from euro21.1 billion in the third quarter of 2008.
"Our very good third quarter result shows that Allianz has a sound platform for delivering solid earnings even in the 'new normal' of a challenging market environment with structurally lower returns," Oliver Baete, Allianz' chief financial officer said in the company's report.
"Allianz is well capitalized and our solvency ratio has a firm base founded on a high quality investment portfolio and conservative risk management approach," Baete said.
Investors were pleased by the results and the outlook and pushed the shares 4.3 percent higher to euro82.61 in Frankfurt morning trade.
The company said developments in the third quarter of 2009 confirmed the signals of a gradual recovery, but that the global economy would still shrink by 2.3 percent this year _ with economies in industrial countries set to contract by 3.3 percent. Factors like government stimulus packages ending and high public sector deficits could also further negatively affect the economy.
Insurance and reinsurance companies are closely watched for their assessments of markets and the economy because they generally invest large sums of premium capital. Allianz is also a financial services company.
That said, the company expects financial markets to continue to be exposed to risk.
Allianz' property-casualty business as well as its life insurance business face weaker demand due to the economic downturn with rising business insolvencies and rising unemployment. Allianz said insurance prices are moving upward only slowly if at all and only in specific areas of business.
Allianz said premiums at its property and casualty insurance business fell 5.4 percent to euro10.2 billion, while operating income fell 18.2 percent to euro1 billion.
At the life and health insurance business premiums rose nearly 15 percent to euro10.8 billion, while operating income rose sharply to euro859 million.
The financial services division saw operating revenue rise 23 percent to euro1.1 billion, while operating profit also rose sharply to euro332 million.
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