Allianz's Irish arm posts €14m quarterly profit
THE Irish wing of German insurance giant Allianz returned to operating profits in the second quarter of the year, but local management insist conditions remain "desperately tough".
Figures released yesterday showed Allianz Ireland enjoyed operating profits of €14m in the three months to June, against break-even for the same period a year earlier.
The second-quarter boost was enough to bring overall operating earnings for the first half up to €8m, against operating losses of €5m in the first six months of 2009.
"A quarter is not a very good period to make judgment on profitability," Allianz Ireland marketing boss Damien O'Neill said yesterday. "We would be cautious [on the outlook], it's desperately tough out there."
Allianz's higher second-quarter profits came as gross written premiums grew 12pc to €173m.
Mr O'Neill said the rise largely stemmed from Allianz's personal book, with rises "broadly across the board" in property and motor.
"Commercial is still difficult, employment is down, people are cutting back, so there's reduction in exposure," he said.
Allianz's business is split about 50/50 between commercial and personal lines.
Mr O'Neill said Allianz had put through "double-digit" increases in its rates in 2009 in response to deteriorating market conditions and had no plans to up rates for the rest of 2010.
"The full earnings potential of last year's rises will come through over the rest of 2010," Mr O'Neill said.
"Based on standard modelling, we'd be optimistic that the increases already put through would see us in good stead."
Allianz Ireland has a substantial household book, but has yet to calculate the final hit of last winter's floods and freeze. Mr O'Neill said a figure should be finalised soon.
The Irish arm's figures came as Allianz's global second-quarter profits collapsed 45.6pc to €1.02bn. It cited "high natural catastrophe losses" and lower investment gains.