Allianz Q2 net profit up 21% to euro1.9 billion

Allianz Q2 net profit up 21% to euro1.9 billion

Frankfurt: German insurer Allianz SE said Friday its second quarter net profit rose 21% on operating earnings that rose sharply compared to the previous three quarters, prompting the company to provide an optimistic outlook.

The Munich-based company said its net profit for the April-June period rose to €1.9 billion ($2.7 billion) from €1.5 billion in the second quarter of 2008.

Revenues for the quarter were slightly higher at €22.2 billion compared with €21.5 billion a year ago.

Operating profit of €1.8 billion during the quarter was lower than the year-ago figure of €2.7 billion.

However, operating profit rose 26% compared with the first quarter 2009, when the company earned €1.4 billion, prompting the company to indicate it has seen the worst of the recession.

“Overall, we achieved very good quarterly results," Michael Deikmann, the chief executive of Allianz said in the report.

“Allianz is prepared for what we perceive as ’the new normal,’ an ongoing challenging market environment with structurally lower returns. We remain strongly capitalized and our low risk profile allows us to withstand potential market shocks. In addition, we are well diversified from both a regional and business unit point of view, and are thus able to benefit from market upturn."

Still, despite repeatedly warning of continuing economic uncertainty, the company said it remains confident about its positioning to take advantage of an improving economic and operating environment and “has a sound platform for delivering solid earnings in core insurance and asset accumulation business."

In terms of divisions, the company said its life and health segment saw its operating profits improve nearly 41% to €990 million on revenues that were 10% higher at €12 billion during the second quarter.

The company’s financial services segment saw its operating profits decline nearly 49% to €146 million. Revenues in financial services were nearly level for the quarter at €926 million.

Meanwhile the property and casualty business saw its operating profit fall 47% to €895 million, while revenues for the division, measured in gross written premiums, fell by 3% to €9.5 billion.

Overall, Allianz said that division was especially affected by the Italian earthquake and severe weather in France during the first half of the year.

For the first six months of the year, Allianz said its revenues rose nearly 3% to €49.9 billion compared to €48.5 billion in the January-June period of 2008.

Net profit for the first half of the year was however lower. Net profit for the first six months fell nearly 30% to €1.9 billion from €2.7 billion in 2008.

Shares of Allianz closed slightly higher at €75.50 Thursday.