By Ulrike Dauer

FRANKFURT--Allianz SE (ALV.XE) said Friday that second-quarter net profit rose 23%, helped by lower sovereign debt losses, plus gains in life & health insurance, asset management and investments.

These improvements more than offset property & casualty claims for mid-sized weather events such as earthquakes in Italy, tornadoes in the U.S. and thunderstorms in Germany, a EUR120 million upward revision for claims related to the flooding in Thailand and lower releases of reserves.

Allianz, Europe's biggest insurer by market capitalization and premium income, also reassured investors that it is on track for 2012 operating profit in the targeted range of 7.7 billion euros ($9.5 billion) and EUR8.7 billion, though it stopped short of raising hopes that it now expects to reach the upper end of that guidance, which some investors expect.

"Our consistently good results show that we weather the difficult market conditions very well. Our operative business is stable and remains on course," said Chief Executive Michael Diekmann.

Net profit rose to EUR1.23 billion from EUR1 billion a year earlier, beating the average estimate of EUR1.21 billion in a Dow Jones Newswires poll.

Operating profit, which many companies consider a better reflection of performance, rose 2.8% to EUR2.36 billion, above analyst forecasts of EUR2.21 billion.

Last year around this time Allianz wrote down the value of its entire Greek sovereign debt portfolio to market value, which cut EUR326 million from quarterly net profit and EUR76 million from operating profit, entirely in the life & health business. This year there weren't any major debt impairments.

Total revenue was EU26.2 billion, a 2.5% increase and above the forecast EUR25.04 billion.

Allianz competes with French AXA SA (CS.FR) and Italy's Assicurazioni Generali SpA (G.MI) for clients seeking insurance and retirement products, motor policies and investment funds.

Shares closed down EUR2.81, or 3.5%, at EUR78.62 Thursday, underperforming the Stoxx 600 Insurance index, which ended down 2.8%. The shares have lost 4% over the past year, lowering market capitalization to EUR36 billion.

-Write to Ulrike Dauer at ulrike.dauer@dowjones.com

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