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Allianz profits up as property insurance improves

Updated at: 08/02/2013 6:05 AM
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(AP) FRANKFURT, Germany - German insurer Allianz SE said Friday net profit rose 27 percent in the second quarter, as its basic property insurance business improved and more funds flowed into its asset management division.

Net profit rose to 1.59 billion euros ($2.10 billion) from 1.25 billion on revenues that rose 6 percent to 26.8 billion euros.

Allianz said it overcame 330 million euros in net losses for claims paid to victims of the June flooding in central Europe. It also had to weather very low interest rates that reduced returns on invested premium money.

"We can look back on a very successful first half year overall," said CEO Michael Diekmann, CEO of Allianz SE. "Although we faced record floods in Central Europe, persistent low interest rates and erratic capital markets, our business continued to grow profitably."

Munich-based Allianz said it would likely reach the upper range of its profit goal for the full year of 9.2 billion euros, plus or minus 500 million euros, saying the higher figure was "within reach." The company’s shares rose 1.4 percent to 118.8 euros in morning trading in Germany.

Earnings from property insurance rose 22 percent as the company improved its combined ratio, a basic measure of insurance profit, to 96 from 97.2 the year before. The ratio represents costs and claim payouts divided by premium income, so a ratio under 100 indicates a company is writing profitable insurance policies.

Its property insurance business benefited from charging higher premiums in major markets such as Australia, France, Germany and the U.S.

Earnings from its asset management business rose 41 percent thanks to higher fee and commission income as money under management increased 6.6 percent.

The company’s bottom line was improved as one-time factors shifted from a minus of 151 million euros a year ago to a plus of 132 million.

(Copyright 2013 by The Associated Press. All Rights Reserved.)