Allianz profits fall by 7.4%

Insurer Allianz SE says net profit slipped 7.4% in the second quarter as the company took a loss of €326m on its holdings of Greek bonds.

Net profit was €1.071bn, down from €1.157bn last year. Revenues were down 3.2% to €24.6bn.

Chief executive Michael Diekmann said the results were “satisfying” since the company had maintained “stable profitability” through a period of currency and market fluctuations as well as the Greek debt crisis.

The company confirmed its earnings outlook for the year of €7.5bn to €8.5bn 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 estimates among analysts surveyed by Factset.

The company’s property and casualty insurance business, one of its mainstays, showed a 2.4% increase in gross premiums of 2.4% to €10.2bn.

The company cited a basic insurance businesses combined ratio of 95%, a key figure in the insurance business that shows the ratio of claims and expenses to premiums. A ratio of under 100% 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.