Allianz, Europe’s largest insurance group, more than doubled quarterly net income from its operations, lifted by the rally in world markets which improved returns from its investments.

Operating profits in the three months to September also improved from €1.6bn ($2.4bn) a year ago to €1.9bn. But its property and casualty insurance business was operating “below normal levels”, due to a high number of weather-related claims combined with the effects of the recession on underwriting policies.

Refusing to give profit forecasts for this year or next, Allianz said in its quarterly report that its main insurance businesses “face markedly weaker demand”, hit by rising corporate insolvencies and unemployment.

The insurer said: “There are a number of potential negative factors hanging over the medium and long-term horizon which could cloud the economic outlook as soon as next year and thus noticeably curb global growth momentum.”

Oliver Bäte, chief financial officer, said in a telephone call to journalists that Allianz was not considering any deals to buy assets from banks such as RBS or ING. “We have no concrete transactions in our sights,” he said.

Allianz’s operating profit from property and casualty insurance exceeded €1bn – the strongest quarterly performance this year but down by more than 18 per cent on last year. The result was “not yet satisfactory. We remain focused on our efforts to improve productivity in this segment”, said Mr Bäte. Germany, Allianz’s home market, and France were areas where Allianz had to “work more”, he said.

But Allianz reported much better returns from its life and health insurance business, where premium income rose by more than 14 per cent and operating profit increased from €218m to €859m compared with the third quarter of last year.

Allianz also benefited from a strong performance in its asset management division. Favourable capital markets and strong organic growth helped increase third party assets under management by €65bn to €878bn, the highest ever. Allianz said a cost-income ratio of 59 per cent was helping asset management to perform “at the top of the industry”.

Group net income for the quarter rose to €1.3bn compared with €545m a year ago when taking into account only Allianz’s continuing operations and excluding lossmaking Dresdner Bank, which was sold to Commerzbank in January. The net income narrowly beat consensus analysts’ estimates.

Earnings per share for the quarter were €2.94 compared with a loss of €4.48 per share in the same quarter last year when including Dresdner. Allianz also said its solvency ratio, a measure of capital strength used by insurers, rose further during the quarter while shareholders’ equity increased by 14 per cent.

Shares in Allianz rose 5.4 per cent to €83.57.