Insurance company Allianz-Tiriac posted net profit worth 15.8 million RON (almost 4.5 million euros) in the first half of the year, slightly down from the same time in 2005. The turnover of the insurer, however, went up 34% in RON, with the profit decline caused by the high claims ratio on the auto insurance segment, which accounts for over half of its portfolio, the company says.

The very high claims ratio on the auto insurance segment is the cause of the slight reduction in profit, the company's management says. Although the claims settled are the same for the auto liability policies and for the optional (comprehensive insurance) policies, the larger share of the comprehensive policies in Allianz's portfolio had a greater impact on the company.

Comprehensive insurance policies accounted for 56% of Allianz-Tiriac's portfolio in the first half. All in all, the company had 153 million euros in gross premiums underwritten (541.5 million RON) in the first six months, an increase of 34% in RON. The general insurance segment grew 30%, up to almost 138 million euros, whereas the life insurance segment rose by 96%, to 15 million euros.

The value of the claims settled for the general insurance contracts, which include car insurance policies, rose by 45%, much faster than the 30% growth of premiums underwritten. To offset the increase in the claims ratio, the company began acquisition and management cost control programmes.

Cristian Constantinescu, the general manager of Allianz-Tiriac, says the profit margin in the first six months maintains the company above the market average. "We revised our targets upwards," he adds.

Constantinescu anticipates the company he runs to be the first to exceed the one billion RON (some 280 million euros) underwriting threshold this year, maintaining profitability about the same as last year, when the company post