Allianz SE (AZSEY), Europe’s largest insurer, said its second-quarter profits fell nearly 50%, largely due to the sale of shares in Industrial & Commercial Bank of China and a write-down in its investment in Hartford Financial Services Group Inc.
Net income in the second quarter dropped to 1.02 billion euros ($1.34 billion) from 1.87 billion euros a year earlier, missing analysts’ estimates of 1.18 billion euro. Still, the company had a 23% gain in operating profits, 2.19 billion euros, which surpassed projections.
“While in the second quarter soft market conditions persisted in many insurance markets, positive price effects were observed in several of our core markets,” CFO Oliver Baete said in the statement.
Allianz posted a 167 million-euro write-down on its investment in Hartford in the quarter, compared with a positive effect of 97 million euros in the previous three months. Two years ago, it invested $2.5 billion in Hartford, which now represents nearly 20% of the U.S. insurer.
Earlier this week, Hartford said it expects 2010 core earnings per share to be between $2.10 and $2.30. The previous guidance was between $2.70 and $3.00. This includes the impact of a pre-tax underwriting loss of $206 million from other operations in property and casualty.