Allianz Life sees its earnings rise, while parent's profit plummets

The Golden Valley-based offspring of huge Allianz SE is doing better than its German parent lately.

On Friday, Allianz Life Insurance of North America said it posted an operating profit of $64 million in the third quarter compared with $57 million a year earlier.

Meanwhile, Allianz SE, Europe's biggest diversified insurer and a global titan, reported a bigger-than-estimated 84 percent drop in third-quarter profit after write-downs on Greek government debt and investments in financial companies.

"Everybody was expecting the additional Greek loss, but the quarter's equity write-downs were a real hammer," Konrad Becker, a Munich-based analyst at Merck Finck & Co., told Bloomberg News. "What also hit the bottom line was the unexpectedly high tax rate, but since all that doesn't affect the operating profit, their full-year target remains well within reach."

Yet shares of Allianz SE finished the day in positive territory in an up day for markets after extreme volatility ended Friday with investors believing that new Italian and Greek leaders will take steps to address huge deficits.

Locally, Allianz Life, which generates 7.5 percent of revenue for the global parent company, posted premium income from policies of $8.3 billion through the third quarter of 2011, up 7 percent from the first nine months of 2010.

Operating profit was $379 million, down from $405 million during the first three quarters of 2010.

"Despite the volatility of the third quarter, including drops in both equity markets and interest rates, Allianz Life was able to post solid profits and clearly demonstrate the value proposition of our products," said Allianz Life CEO Gary Bhojwani.