Allianz net profit slips 7.4 pct

AP News
Posted: Aug 05, 2011 6:55 AM
Allianz net profit slips 7.4 pct

Insurer Allianz SE says net profit slipped 7.4 percent in the second quarter as the company took a loss of euro326 million ($460 million) on its holdings of Greek bonds.

Net profit was euro1.071 billion ($1.512 billion), down from euro1.157 billion from last year and falling short of analyst estimates.

Revenues were down 3.2 percent to euro24.6 billion.

CEO Michael Diekmann said the results were "satisfying" since the company had maintained "stable profitability" through a difficult period of currency and market fluctuations as well as the Greek debt crisis.

The company confirmed its earnings outlook for the year of euro7.5 billion-euro8.5 billion in operating earnings, which exclude some financial items.

Greek bonds have fallen in value due to the country's debt crisis and investors are being asked to take new, longer-dated bonds that pay less interest.

The profit figure fell short of the euro1.289 billion average estimate among analysts surveyed by Factset.

The company's property and casualty insurance business, one of its mainstays, showed a 2.4 percent increase in gross premiums of 2.4 percent to euro10.2 billion euros.

The company cited a basic insurance businesses combined ratio of 95.0, a key figure in the insurance business that shows the ratio of claims and expenses to premiums. A ratio of under 100 percent indicates the basic insurance business is profitable.

Chief financial officer Oliver Baete said the business had benefited from the company charging higher premium rates, and from lower losses from natural disasters in the quarter.