Allianz SE (ALV.XE), Europe's largest primary insurer by market capitalization, Monday said third-quarter net profit more than doubled on lower asset write-downs, and as improvements in life/health insurance and financial services more than offset lower contributions from property/casualty insurance.

The figures reflect Allianz's improved earnings power in its core operations following the sale of loss-making Dresdner Bank.

The company gave no concrete earnings target for 2009 or beyond. But it is well capitalized and prepared for delivering solid earnings even in the "challenging market environment with structurally lower returns" ahead, due to its high-quality investment portfolio and conservative risk management approach, said Chief Financial Officer Oliver Baete, who took the position Sept. 1.

It also said it accrued a dividend equivalent of EUR1.4 billion for the first nine months.

Third-quarter net profit rose to EUR1.32 billion from EUR545 million in the year-earlier quarter, roughly in line with the EUR1.33 billion average forecast in a Dow Jones Newswires poll of 15 analysts.

The year-earlier figure was restated to reflect continuing operations only, after Allianz sold Dresdner Bank to Commerzbank AG (CBK.XE) for around EUR5.1 billion in the first quarter. A year ago, Allianz made a EUR2.02 billion loss when it still owned Dresdner Bank.

Operating profit rose 23% to EUR1.93 billion from EUR1.56 billion, beating a forecast of EUR1.84 billion. It had a strong contribution from life/health insurance and financial services, which benefited from improvements in capital markets, the gradual economic recovery and the narrowing of credit spreads - which supported good-margin revenue growth from investment products with underlying guarantees.

Meanwhile, property/casualty contributed 18% less to operating profit than in the year-ago quarter, which the company attributed to negative effects from the recession on business in Germany, France, Italy and credit insurance, and to an unusually high number of weather-related claims in those countries.

Allianz called the operating result in property/casualty business "not yet satisfactory." It said the segment needs to improve productivity and that business volumes remain challenged due to weaker demand and portfolio cleaning measures, though rates are rising. Efforts to improve productivity will be seen in 2010, but the full impact will only be noticeable over the next three years, Allianz said.

The investment result, and notably lower net write-downs on investments, made a substantially better contribution to earnings than a year ago. In the quarter, net write-downs on investments were EUR46 million compared with EUR921 million in the third quarter of 2008.

Allianz had net realized disposal gains of EUR322 million compared with EUR517 million a year ago.

At 0804 GMT, Allianz shares were up EUR3.02, or 3.6%, at EUR82.10. UniCredit analyst Andreas Weese said net profit and operating profit were ahead of consensus, reflecting a better-than-forecast contribution from life/health insurance and financial services, while the contribution from property/casualty insurance was in line. Weese, who rates the share at buy, called the capital position good. Merck Finck analyst Konrad Becker also said the figures topped his forecast, though he would have liked to see some full-year guidance.

-By Ulrike Dauer, Dow Jones Newswires; +49 69 29725 500; ulrike.dauer@dowjones.com
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