Allianz profits slump in third quarter

German insurance giant Allianz said on Friday that earnings plunged in the third quarter, hit by turmoil on financial market, but the group said it stood by its full-year targets. Allianz said in a statement it earned 196 million euros ($266 million) in the period from July to September, a drop of 84.5 percent from the figure for the year earlier period. Operating profit fell by 7.3 percent to 1.906 billion euros on a 1.8-percent decline in total revenues to 24.1 billion euros. "We maintained revenues at a high level and achieved a solid operating proifit in the third quarter," the insurance giant said. "At the same time, we preserved our strong capital base despite the downturn of equity markets and the ongoing sovereign debt crises." The decline in operating profit was largely due to lower investment results in the life and health insurance business. Earnings were stable in property and casualty insurance, "while asset management continued its successful path and again increased its operating profit," the statement said. Allianz said it took a charge of 931 million euros on its investments in the financial sector and from Greek sovereign debt. In addition, its tax rate surged. "All market participants have to face the uncertainty and high volatility of the capital markets," said chief financial officer Oliver Baete. "Because of our solid operating results and unwavering capital strength, Allianz is well able to withstand this adversity. We remain committed to achieving our operating profit target for 2011 of 8.0 billion euros, plus or minus 0.5 billion euros," Baete said. Investors appeared to be encouraged by the group's confidence and Allianz shares were the biggest gainers on the Frankfurt stock exchange on Friday, rising 2.4 percent to 73.93 euros in a slightly firmer market.