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Allianz reports unexpected 6% rise in third-quarter profit

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FRANKFURT (Reuters) – German insurer Allianz ALVG.DE on Friday reported an unexpected 6% rise in third-quarter net profit from a year earlier, despite pressure on its business from the pandemic but

FILE PHOTO: The logo of Allianz is seen on a building in Paris, France, April 30, 2020. REUTERS/Charles Platiau

did not provide an update on full-year profit guidance.

Allianz, like other insurers, has warned about prospects as clients make claims for business interruption and cancelled events, while demand for car and travel insurance has fallen.

Net profit attributable to shareholders of 2.063 billion euros ($2.44 billion) in the three months through September compares with 1.947 billion euros a year earlier. It was higher than a 1.626 billion euro consensus forecast.

The bottom line was helped by an increase in profit unrelated to Allianz’s core activities. Those included higher realised gains from a sale in its portfolio and lower impairments, after a writedown for Argentinian bonds a year ago.

The company also definitively cancelled a share buyback that had been on hold “in light of the ongoing economic uncertainties”.

Shares were up 1.4% in early trade.

“We remain confident to not just weather the COVID-19 crisis well, but to build an even stronger Allianz,” Chief Executive Oliver Baete said.

Earlier this year, the insurer abandoned its 2020 profit target of between 11.5 billion euros and 12.5 billion euros due to economic uncertainty resulting from the pandemic, and said it expected to post the first annual decline in profit in nearly a decade.

Allianz’s combined ratio, a measure of profitability for its property and casualty division, one of its highest revenue earners, worsened slightly to 94.5% in the third quarter, up from 94.3% a year earlier. Readings below 100% indicate profitability.

($1 = 0.8464 euros)

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