Allianz SE, Europe's biggest insurer, reported a 21 percent increase in third-quarter profit, beating analysts' estimates, as lower taxes and earnings from insurance cushioned losses at its Dresdner Bank unit.

Net income rose to 1.92 billion euros ($2.83 billion) from 1.59 billion euros a year earlier, Munich-based Allianz said Thursday in an e-mailed statement. That beat the 1.45 billion-euro median estimate of 18 analysts surveyed by Bloomberg.
“Dresdner has been a millstone around Allianz's neck ever since they bought it,” said Philipp Musil, who helps oversee about $30 billion, including Allianz shares, at Constantia Privatbank in Vienna. “Still, Allianz's insurance business is more profitable on an operating level than most of its peers.”
Allianz said “financial market turbulence” cut Dresdner's profit by 575 million euros. Financial companies including American International Group Inc., the world's biggest insurer, had more than $30 billion of writedowns in the third quarter after record foreclosures on U.S. home loans to borrowers with poor credit histories roiled debt markets.
Allianz shares fell to a more than one-year low of 141.38 euros yesterday. They have lost 19 percent since July and are down 8.7 percent since the beginning of the year, valuing the insurer at 63.5 billion euros. The shares' slump this year compares to a 7.6 percent decline in the 28-member Bloomberg Europe 500 Insurance Index.
Allianz is sticking to a forecast for a 14 percent increase in full-year profit to about 8 billion euros, and operating profit of about 11 billion euros.
(Source: Bloomberg)