Allianz has made bullish predictions of strong earnings this year.

The German group, which owns UK's Cornhill Insurance, said it would make a gross profit of more than ¤3bn (£1.84bn).

It credited its UK operations with bringing in more money from premium increases, as in Germany, France and Spain.

The group's preliminary financial results for 2001 revealed an increase of 8.7% in premium income from property and casualty to ¤40.9bn (£25bn) from ¤37.7bn (£23bn) in 2000.

This was the strongest

performing sector, which contributed to an overall

rise of 8.1% in gross premium income to ¤74.2bn (£45bn) from ¤68.7bn (£41.8bn).

Allianz Cornhill general manager Andrew Torrance, said: "Income in Great Britain grew significantly last year as the market allowed rates to be strengthened.

"We were able to add considerable volumes of new commercial and personal lines business, as brokers recognised they were receiving consistently good levels of service from us."

Helmut Perlet, responsible for accounting and taxes on the Allianz board of

management, said: "We have achieved our aim of improving profitability in property and casualty insurance."

Allianz stock had been in decline immediately before the results on 7 February.

Shares lifted by 5%, pulling away from a low of £14.40 and continued to rise at the end of last week when they were trading at about £15.70.

Analyst Carsten Zielke, of European investment bank WestLB Panmure, said the group had achieved rate increases of averaging about 25% overall, with 200% and 300% on certain lines.