German insurer Allianz SE, which owns a sizable stake in Hartford Financial Services Group Inc., says net profit slipped 7.4 percent in the second quarter as the company took a loss of euro326 million ($460 million) on its holdings of Greek bonds, The Associated Press reports.
Allianz says net profit was euro1.071 billion ($1.512 billion), down from euro1.157 billion from last year and falling short of analyst estimates.
Revenues were down 3.2 percent to euro24.6 billion.
A day earlier, The Hartford reported lower second-quarter earnings due to large catastrophe losses and taking a charge to increase asbestos reserves.
Allianz CEO Michael Diekmann said the results were “satisfying” since the company had maintained “stable profitability” through a difficult period of currency and market fluctuations as well as the Greek debt crisis.
The Munich insurer invested $2.5 billion in The Hartford in 2008 via subordinated debt, shares and warrants, which currently entitle it to buy 18 percent of the U.S. insurer.
The company confirmed its earnings outlook for the year of euro7.5 billion-euro8.5 billion 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 the euro1.289 billion average estimate among analysts surveyed by Factset.
