Allianz writedowns from crisis approach $4 billion

By John O'Donnell

FRANKFURT (Reuters) - Europe's biggest insurer Allianz (ALVG.DE: Quote, Profile, Research, Stock Buzz) unveiled fresh writedowns at its Dresdner Bank unit of 900 million euros ($1.4 billion) from the global markets crisis and said the turmoil could hurt future profits.

The latest writedowns -- more than double what they were when Allianz finance chief Helmut Perlet updated investors at the beginning of the year -- take the insurer's total bill from the financial turmoil to about 2.5 billion euros.

Allianz also warned that its profit targets, while still attainable, would become harder to reach the longer the turmoil lasted. The remarks came as Deutsche Bank (DBKGn.DE: Quote, Profile, Research, Stock Buzz) retreated from its 2008 goal and announced its first quarterly loss in five years.

Allianz had been aiming to fatten operating profit -- it made almost 11 billion euros last year -- by an average 10 percent each year between 2007 and 2009. This would take it over 13 billion euros at the end of next year.

The Munich-based group said its operating profit reached 1.8 billion euros in the first three months of the year.

ANNUS HORRIBILIS

Chief executive Michael Diekmann has been credited with turning around the group since taking charge after what his predecessor Henning Schulte-Noelle described as the "terrible year" of 2002 that forced his own departure.

Diekmann has since boosted the profitability of its insurance work and cut costs to pull Dresdner out of the red.