Allianz cautious despite solid profit for 2009

German insurance giant Allianz brandished on Thursday strong 2009 results as it emerged from the global financial crisis in good shape, while remaining modest for 2010.

Allianz cautious despite solid profit for 2009
Photo: DPA

Chief executive Michael Diekmann said the group forecast an operating profit of around the same level as last year, or €7.2 billion.

“I don’t want to appear too conservative… but one big catastrophe can erase” ambitious targets, he said while presenting annual results in Munich, southern Germany.

The group posted a 2009 net profit of €4.3 billion and said it slept soundly despite being owed billions by heavily indebted eurozone states.

Allianz, Europe’s largest insurance group by gross premium income, reported a net loss of €2.44 billion in 2008 and analysts polled by Dow Jones Newswires had forecast a profit of €4.34 billion this time around.

The results in 2008 were hit by loss-making Dresdner Bank, which Allianz has since sold to Commerzbank, the second biggest German bank.

The insurer said in a statement that it made a profit of €1.08 billion in the last three months of 2009, which it considers a better reflection of its performance, compared with a loss of €3.11 billion in the same period of 2008.

That result was also slightly below an average analyst forecast of €1.12 billion.

Allianz board member Paul Achleitner told a news conference that the group had total exposure of €11.3 billion to eurozone countries that have become objects of concern owing to high public deficits and/or levels of debt.

“Our portfolio is very diversified,” Achleitner said. “We can sleep soundly.”

The group’s debt portfolio is concentrated in France, Germany and Italy, with the latter accounting for €7.6 billion of a total €130.5 billion in 20 countries around the world.

Spain accounts for another €1.8 billion, while Allianz holds around €900 in Greek debt and 500 million in Ireland.

Portugal, Greece, Ireland, Italy and Spain are currently seen as countries at risk by many financial experts.

Allianz said meanwhile that it would raise its 2009 dividend to €4.10 per share from €3.50 in 2008.

Full-year revenue rose by 5.2 percent to €97.4 billion, of which €23 billion came in the final three months of the year.

The insurer did not give a detailed outlook for 2010 owing to “a very volatile market environment,” the statement quoted Diekmann as saying.

Allianz took a hit last year from its casualty insurance activities, in part owing to an earthquake in Italy and storms in France, but posted better results in health and life insurance.

Shares in the insurance group gained 1.15 percent to €83.02 in midday trading on the Frankfurt stock exchange, while the DAX index of leading stocks was 0.09 percent lower overall.

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Four injured as WWII bomb explodes near Munich train station

Four people were injured, one of them seriously, when a World War II bomb exploded at a building site near Munich's main train station on Wednesday, emergency services said.

Smoke rises after the WWII bomb exploded on a building site in Munich.
Smoke rises after the WWII bomb exploded on a building site in Munich. Photo: picture alliance/dpa | Privat

Construction workers had been drilling into the ground when the bomb exploded, a spokesman for the fire department said in a statement.

The blast was heard several kilometres away and scattered debris hundreds of metres, according to local media reports.

Images showed a plume of smoke rising directly next to the train tracks.

Bavaria interior minister Joachim Herrmann told Bild that the whole area was being searched.

Deutsche Bahn suspended its services on the affected lines in the afternoon.

Although trains started up again from 3pm, the rail operator said there would still be delays and cancellations to long-distance and local travel in the Munich area until evening. 

According to the fire service, the explosion happened near a bridge that must be passed by all trains travelling to or from the station.

The exact cause of the explosion is unclear, police said. So far, there are no indications of a criminal act.

WWII bombs are common in Germany

Some 75 years after the war, Germany remains littered with unexploded ordnance, often uncovered during construction work.

READ ALSO: What you need to know about WWII bomb disposals in Germany

However, most bombs are defused by experts before they explode.

Last year, seven World War II bombs were found on the future location of Tesla’s first European factory, just outside Berlin.

Sizeable bombs were also defused in Cologne and Dortmund last year.

In 2017, the discovery of a 1.4-tonne bomb in Frankfurt prompted the evacuation of 65,000 people — the largest such operation since the end of the war in Europe in 1945.