German insurer Allianz said today that its third-quarter profits slumped to €258 million from €1.27 billion in the same period last year because of investment losses and Greek bond writedowns from Europe’s debt crisis.

The company's result was well short of the €766 million predicted by analysts surveyed by FactSet. Revenue
fell 1.8 per cent to €24.07 billion.

Munich-based Allianz said today that it lost €122 million from writing down Greek bonds, and €817 million from the fall in value of its holdings in other financial companies such as banks and insurers.

Greece is in the process of working out a debt reduction which includes bondholders taking 50 per cent losses on the value of their investments. Fears that Greece's problems will infect larger countries such as Italy have led to sharp swings on stock and bond markets.

Allianz said it would stay with its profit estimate for the full year of operating earnings of €8 billion, plus or minus €0.5 billion.

"All market participants are confronted at this time with the uncertainty and large swings on capital markets," said Oliver Baete, head of controlling, reporting and risk.

The company's basic property and casualty insurance business showed a slight decline of 1 per cent in operating earnings to €1.11 billion, and its combined ratio slipped to 97.6 per cent from 97.1 per cent in the same quarter a year ago.

The ratio measure costs and claims against premiums, ratios under 100 therefore show the gain from basic underwriting.

The company said it suffered higher losses from natural catastrophes but was able to make up some of that with higher prices.

AP