Generali, the Italian insurer, on Thursday reported an 18 per cent fall in first half net profits, largely because of a €905m ($1.4bn) writedown in its bond and equity portfolio because of the market crisis.

Antoine Bernheim, chairman of the Trieste-based group which in May dropped out of the race for Royal Bank of Scotland’s insurance assets, said the negative environment of the first half coupled with “the evermore uncertain outlook for the balance of the year make it difficult to give a reliable prediction for the end of 2008”.