Allianz Cornhill increased its estimate of losses from the US terrorist attacks by 50% to ¤1.5bn (£920m).

It was the second increase by the German insurance group.

It originally estimated claims from the 11 Septem-ber attacks would result in net costs of ¤700m (£430m).

The company's share price fell by about 3%. After the news was announced, the company also announced a lower than expected loss of ¤46.3m (£28.4m) for the third quarter of the year.

The loss surprised analysts who had predicted a loss arising from the company's new acquisition, Dresdner Bank.

Dresdner contributed a profit of ¤313.8m (£192.7m), while the group's property and casualty business also showed profit.

Within the property and casualty business, the group's operations in the UK generated gross written premiums of ¤1.9bn (£1.16bn) in the first three quarters.

Comparison figures for last year were not available before Insurance Times went to press. The group was publishing three quarterly financial results for the first time.

The combined ratio improved from 116.9% at the end of December to 106% on 30 September, a change put down to improvements in motor insurance.

Allianz spokesman Mark Bishop said: "We introduced a range of measures some time ago which are kicking in now, hence our improved profit performance this year.

"These measures include more robust underwriting practices and tighter management controls.

"Our combined ratio has improved primarily because we have been able to benefit from improved economies of scale on the new business we have taken on this year."

The group is sticking to an earlier full year net profit forecast of ¤1.7bn (£1.06bn). It expects premium income to increase by about 7%.

It said premium income for the first nine months of the year rose by 8% to ¤54.9bn (£33.7bn).