Greek debt crisis, market turmoil hit Allianz's 4th quarter profits

Feb 23, 2012, 12:25 GMT

Munich - Allianz, Europe's biggest insurer, reported Thursday a 57-per-cent slump in fourth quarter profits, attributing the decline to financial market turmoil and writedowns linked to the eurozone debt crisis.

The Munich-based company said net profit for the final quarter dropped 57 per cent to 492 million euros (652 million dollars) from 1.14 billion a year earlier.

'We are confident about our strong business opportunities in 2012,' Allianz chief executive Michael Diekmann said. 'Therefore, we are raising the operating profit outlook.'

The company expects operating profit this year to be in the range of 7.7 billion euros and 8.7 billion euros, compared with 7.87 billion euros in 2011.

Diekmann described 2011 as 'a tough year,' but said the group had 'maintained stability throughout.'

Announcing its latest earnings figures, Allianz said net profit halved last year to 2.55 billion euros from 5.05 billion euros. The group proposed holding its dividend at 4.50 euros a share.

The group was forced to book writedowns totalling 1.9 billion euros for its share market investments and Greek state debt holdings.

Fourth quarter total group revenue dropped 3.7 per cent to 25 billion euros from 26 billion euros in the same quarter in 2010. For the full year 2011, revenue was down 2.7 per cent to 103.6 billion euros.

Speaking at a press conference in Munich, Diekmann also indicated that the insurer was ready to consider expanding its holdings in Italian government bonds, which stood at 26.1 billion euros at the end of last year.

'It actually makes sense to further increase our commitment,' said Diekmann, who also praised the efforts of Italian Prime Minister Mario Monti to clean up Italy's state finances and to increase the nation's economic competitiveness.

'The good progress made by Monti's government confirms our assessment,' the Allianz chief said.

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