Allianz SE, Europe’s biggest insurer, said profit dropped 46 percent after it earned less from selling shares in Industrial & Commercial Bank of China Ltd. and wrote down its investment in Hartford Financial Services Group Inc., Bloomberg News reports.
Net income in the second quarter fell to 1.02 billion euros ($1.34 billion) from 1.87 billion euros in the year-earlier period, Bloomberg reports, citing a company e-mail statement.
That missed the 1.18 billion-euro median estimate of 13 analysts surveyed by Bloomberg. The shares rose as a 23 percent gain in operating profit to 2.19 billion euros exceeded projections.
The company earned 115 million euros in the second quarter from the April sale of shares in ICBC, it said in the quarterly report posted on its website today. In the year-earlier period, Allianz booked a gain of 666 million euros from selling a stake in the Beijing-based lender.
Allianz posted a 167 million-euro writedown on its investment in The Hartford in the quarter, compared with a positive effect of 97 million euros in the previous three months.
The German company 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. Allianz has said its investment in Hartford is “a long-term financial investment.”
 “While in the second quarter soft market conditions persisted in many insurance markets, positive price effects were observed in several of our core markets,” Chief Financial Officer Oliver Baete said in the statement. “Our quarterly operating profit growth shows progress in terms of underwriting, claims management and productivity.”
Chief Executive Officer Michael Diekmann, 55, said he’s “confident” the Munich-based insurer can achieve its target of reaching operating profit of 7.2 billion euros, plus or minus 500 million euros, this year.
