Insurer left counting the cost of Europe's debt crisis
Published 14/11/2011 | 08:00
German insurer Allianz's third-quarter profits slumped to €258m (£219.8m) from €1.27bn (£1.08bn) in the same period last year because of investment losses and Greek bond writedowns from Europe's debt crisis.
The company's result was well short of the €766m (£652.6m) predicted by analysts surveyed by FactSet.
Revenue fell 1.8% to €24.07bn (£20.5bn).
Munich-based Allianz said that it lost €122m (£104m) from writing down Greek bonds, and €817m (£696m) from the fall in value of its holdings in other financial companies such as banks and insurers.
Greece is in the process of working out a debt reduction that includes bondholders taking 50% losses on the value of their investments.
Fears that Greece's financial problems will infect larger countries such as Italy have led to sharp swings on stock and bond markets.
Allianz said it would stay with its profit estimate for the full year of operating earnings of €8.0bn (£6.8bn), plus or minus €0.5bn (£0.4bn).
"All market participants are confronted at this time with the uncertainty and large swings on capital markets," said Oliver Baete, head of controlling, reporting and risk.
The company's basic property and casualty insurance business showed a slight decline of 1% in operating earnings to €1.11bn (£945.6m), and its combined ratio slipped to 97.6% from 97.1% in the same quarter a year ago.
The ratio measure costs and claims against premiums, ratios under 100 therefore show the gain from basic underwriting.
The company said it suffered higher losses from natural catastrophes but was able to make up some of that deficit with higher prices.