MUNICH ( TheStreet) -- Allianz ( AZ), the biggest insurer in Europe, reported Friday a 7.4% decline in second-quarter earnings because of writedowns on its Greek bond holdings.

Allianz earned €1.07 billion ($1.51 billion) in the quarter, down from €1.16 billion a year earlier. Analysts were expecting a profit of €1.29 billion.

The insurer recorded a loss of €326 million from its holdings of Greek sovereign bonds.

Revenue in the quarter fell 3.2% to €24.6 billion.

"These are very satisfying results," said Michael Diekmann, CEO of Allianz, in a statement Friday. "Our geographic and business segment diversification is keeping us at stable profitability levels. I think that the results -- be it in the second quarter or for the half-year -- are remarkably solid considering the high level of natural catastrophe events, the uncertainty of the capital markets, currency fluctuations and, last but not least, the current impairment of our Greek sovereign bond portfolio."

The CEO reaffirmed Allianz expects full-year operating profit of €7.5 billion to €8.5 billion.

-- Written by Joseph Woelfel

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