German insurer Allianz SE, which holds a stake in Hartford Financial Services Group Inc., said today its second quarter net profit rose 21 percent as its life and health insurance business improved and said it was adjusting to the “new normal” of reduced returns.
The Munich-based company said it made euro1.9 billion ($2.7 billion) in the April-June period, up from euro1.5 billion in the second quarter of 2008.
Allianz invested $2.5 billion in The Hartford last fall, when the Connecticut insurer was struggling financially.
Net income from continuing operations was euro1.9 billion compared to euro2.2 billion in the second quarter 2008, a 16 percent decline. Allianz completed the sale of its Dresdner bank unit to Commerzbank AG — Germany’s second biggest lender — in the first quarter of this year.
Revenues for the quarter were slightly higher at euro22.2 billion, compared with last year’s euro21.5 billion.
Operating profit of euro1.8 billion during the quarter was 33 percent lower than the 2008 figure of euro2.7 billion. However, operating profit improved compared with this year’s first quarter, when the company earned euro1.4 billion, and was double the figure for last year’s fourth quarter.
“Overall, we achieved very good quarterly results,” Michael Deikmann, the chief executive of Allianz said in the report.
“Allianz is prepared for what we perceive as ‘the new normal,’ an ongoing challenging market environment with structurally lower returns.”
“We remain strongly capitalized and our low risk profile allows us to withstand potential market shocks,” he said. “In addition, we are well diversified from both a regional and business unit point of view, and are thus able to benefit from market upturn.” (AP)
