German insurance giant Allianz says its first quarter profit was virtually wiped out because of massive write-offs which could also hit second-quarter results.
It said net profit in the three months to March tumbled to €29m from €1.15 billion a year earlier as it took write-offs on assets - mainly stock market investments - totalling €750m. This came on top of a €400m loss from its sale of Dresdner Bank to Commerzbank.
The company warned that it could have write-offs of between €300m and €400m in the three months to June.
Allianz finance chief Helmut Perlet said equities still made up 8% of the company's investments. But he said the company was weathering the financial markets storm and was strong enough to withstand a further 30% drop in share prices if needed.
'We are strongly capitalised, our investment portfolio is of high quality and liquid, and our operating profitability proves resilient,' he said.
Allianz owns the non-life insurer Allianz Ireland.