Insurer Allianz results bow to Greek losses

German insurance giant Allianz said Friday that its second-quarter net profit fell seven percent to €1.07 billion ($1.5 billion) after a large charge on the value of its Greek bond holdings.

Insurer Allianz results bow to Greek losses

Allianz’ operating profit was stable compared with the same period a year earlier, at €2.3 billion, topping analyst forecasts for €2.14 billion as compiled by Dow Jones Newswires.

Sales declined as expected meanwhile, losing 3.2 percent to €24.6 billion, a statement said.

Allianz said that it had reduced the value of its Greek bond holdings to their current market value which entailed booking a charge of €644 million.

Some of that amount was charged to clients, and the group also got a tax rebate on the loss, leaving the impact on its net result at €326 million.

Allianz chief executive Michael Diekmann said in the statement that “these are very satisfying results.”

He said the second quarter and first half figures were “remarkably solid considering the high level of natural catastrophe events, the uncertainty of the capital markets, currency fluctuations and, last but not least, the current impairment of our Greek sovereign bond portfolio.”

Diekmann said that despite the insurer’s second quarter losses, Allianz would meet its 2011 operating profit target of €8 billion, plus or minus €500 million.

German re-insurance giant Munich Re has also written down the value of its Greek bond holdings, but insurers and banks in the country have not said to what extent they plan to participate in a second Greek rescue package backed by the European Union and the International Monetary Fund.

Part of the programme calls for private investors to either voluntarily extend the maturity of their bonds or sell them back at a discounted rate, taking a loss estimated at some 21 percent.

On Thursday, the European Central Bank resumed purchases of sovereign bonds issued by heavily indebted eurozone countries but the intervention failed to stop a massive sell off of stocks in Frankfurt and on other global markets.


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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.