Allianz, Europe’s largest insurer revealed a €3.1bn ($4bn) net loss in the fourth quarter as huge writedowns and trading deficits at Dresdner Bank dragged the lender’s former owner down.

Even though Allianz reported on Thursday a larger-than-expected net loss of €2.4bn for the full year 2008, the news sent a wave of relief through the markets as fears about the need for a possible capital increase proved unfounded.