Insurance company Allianz SE says net profit almost doubled last year as losses on Greek bonds no longer weighed down its results.
The Munich-based company said Thursday its basic insurance business also improved, suffering lower losses on natural catastrophes and enjoying higher premium revenue in Germany, Australia and Latin America.
Net profit rose to (EURO)5.49 billion ($7.34 billion) from (EURO)2.80 billion in 2011, and the company proposed an unchanged dividend of (EURO)4.50 per share. Revenue rose 2.7 percent to (EURO)106.4 billion.
In 2011, Allianz had to write off losses on Greek bonds which fell sharply in value due to the country's debt crisis. Greece eventually negotiated a deal with creditors under which it paid them less than they were owed.
Fourth quarter earnings rose to (EURO)1.29 billion from (EURO)560 million..
CEO Michael Diekmann gave a cautiously upbeat outlook, saying that the eurozone was showing "the first signs of stability" and that "some observers expect the world economy to regain a bit of momentum toward the end of the year." The 17 European Union countries that use the euro have been struggling economically as governments in several countries cut spending to reduce dangerous levels of government debt.
Diekmann said that interest rates are expected to remain low - a burden for insurance companies, since they need to earn a return on premium revenue. "There are still many uncertainties, primarily around sovereign debt levels and the lack of strong growth in developed markets," he said in a statement.
He forecast the company would earn (EURO)9.2 billion, plus or minus (EURO)500 million, this year on an operating basis, which excludes some financial items. That compares to operating earnings of (EURO)9.5 billion for last year.