Allianz expects $1.4 billion in write-downs
BERLIN—German insurer Allianz SE said Tuesday that its first-quarter profit slid 66 percent because of fallout from the global credit crisis and warned it will report write-downs of nearly euro900 million (US$1.4 billion) in the first quarter of this year at its Dresdner Bank unit.
The Munich-based company said that based on preliminary figures, its first-quarter net profit will drop to euro1.1 billion (US$1.7 billion) compared with euro3.2 billion last year.
Shares of Allianz fell 1.2 percent to euro129.15 (US$201.84) in Frankfurt.
In a statement, Allianz said it predicted its operating profit for the January-March period would be euro1.8 billion (US$2.8 billion) compared with euro2.9 billion a year earlier. Allianz will publish its complete first-quarter results on May 9.
The company, Europe's biggest insurer by gross premiums and the owner of Dresdner Bank AG, said the write-downs would "have to be accrued in the area of structured financial products of Dresdner Bank due to the ongoing financial market crisis."
Allianz's U.S. units include Bill Gross' Pimco, one of the world's largest bond managers; Fireman's Fund; Oppenheimer Capital; and fund managers Nicholas-Applegate and RCM Capital.
"In this difficult market environment, an operating profit of almost euro2 billion (US$3.1 billion) underlines our sustainable underlying profitability. Hence, we consider our medium term targets for 2009 to be still feasible, even though this will become harder, the longer the financial crisis will last," said Allianz board member Helmut Perlet.
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