HUK-Coburg Holding AG, Allianz SE’s main competitor in the unprofitable German car-insurance market, said profit fell 38 percent last year as the sovereign debt crisis hurt investment income.
Net income declined to 199 million euros ($255 million) last year from 319 million euros a year ago, the Coburg-based, mutually owned insurer said in a statement today. Investment income slid 17 percent to 797 million euros on writedowns on equities and government bonds.
Motor coverage, the biggest non-life insurance segment in Germany with about 20 billion euros in premiums, has been unprofitable since companies stepped up price cuts to win business, starting in 2005. HUK said its gross premium income rose 4.6 percent to 5.29 billion euros and it insured 160,000 more vehicles during the first four months of the year.
“Thanks to our broad risk provisioning, improved investment income is possible in 2012,” Chief Executive Officer Wolfgang Weiler said at a press conference in Munich today. “It’s hard to predict how capital markets will develop in light of the government debt crisis.”
HUK-Coburg took the top spot among German car insurers from Munich-based Allianz in 2010. At the end of last year, Allianz covered 8.12 million vehicles in Germany, Europe’s largest auto- insurance market. That trailed the 8.99 million vehicles covered by HUK-Coburg at the end of 2011, which was up 3.6 percent from a year ago.
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