MUNICH, Germany, Feb 25, 2010 (A. M. Best via COMTEX) (Insurance News) -- Allianz S.E. reported a surge in life and health insurance income for 2009, enough to overcome a drop in property and casualty earnings to give the multiline insurer a 13.2% gain in net income from operations.

Overall net income was 4.35 billion euros, compared with a net loss of 2.19 billion euros in 2008. Net income from continuing operations rose 13.2% to 4.74 billion euros.

Life and health net income from operations rose nearly four-fold to 2.05 billion euros, while property and casualty net income fell 37.5% to 2.8 billion euros. The property and casualty combined ratio rose to 97.4 from 95.4.

For property and casualty, Allianz said "the sluggish economy and soft markets put downward pressure on overall results," as gross premiums written fell 2% to 42.5 billion euros. The insurer said property and casualty business grew in Australia, the Asia-Pacific region, South America and the United Kingdom, "where margins are attractive."

In life and health, statutory premiums rose 11% to 50.8 billion euros on strong performances in Italy, Germany, the Asia-Pacific region and the United States.

William Hawkins, an equity analyst with Keefe, Bruyette & Woods, said in a research note that Allianz's results were "consensus-confirming." Hawkins noted that the insurer's optimism in its life insurance division, which is at near parity with property and casualty, is a positive sign for future performance.

Hawkins also said Allianz's projection of 7.2 billion euros in operating earnings "sits well" with his analysis. He added that his own earnings projection of 6.4 billion euros "implicitly included the most pessimistic" of performance scenarios for each operating division.

Allianz said it implemented a new segment reporting structure in the fourth quarter of 2009, through which asset Management is now shown on a stand-alone basis. Banking and alternative investments are shown together with the holding and treasury function in a new segment called "corporate and other." In 2009, this segment had an operating loss of 1 billion euros, mainly from the holding and treasury side due to lower net interest income and a weaker U.S. dollar, the company said.

Looking to the rest of 2010, Chief Executive Michael Diekmann said, "we believe that our operating profit will be at the same level as 2009. However, given the still volatile market environment, it is impossible to give a precise forecast. Already, a change in our combined ratio of one percentage point impacts our operating profit by around 400 million euros. Management focus in 2010 will be again on investment performance as well as combined ratio."

By David Pilla, international editor, BestWeek: David.Pilla@ambest.com