Allianz has increased its first-quarter profit 60% to €1.37 billion ($1.76 billion) this year, due to the drop in catastrophes and improved market conditions.

Revenue was €30.1 billion ($38.6 billion), up 0.5% compared with the first quarter last year.

Allianz SE CFO Oliver Bate says that despite fewer natural catastrophes this quarter, there is a trend towards higher impacts.

“For this reason, we have increased our 2012 budget for these impacts to €1.2 billion ($1.5 billion),” he said.

The group says in its interim report that the improved market conditions contributed to an increase in its investment result.

“The debt crisis is not over yet and we saw the lingering market impacts from 2011 still affecting the demand for investment-related life products,” the report says.

Property-casualty gross written premium (GWP) was up 3.8% to €14.8 billion ($19 billion) because of positive price and volume effects, as well as the appreciation of the Swiss franc and the Australian dollar against the euro, Allianz says.

The segment’s combined ratio improved to 96.2% from 101.3%.

The Australian general insurance division increased GWP 24.5% to €675 million ($867 million), due to higher prices after last year’s natural catastrophes as well as a significant volume increase in retail and commercial lines.

The combined ratio for Australian general insurance improved to 99.9% from 109.5%.

Premiums in the group’s life and health insurance segment fell 4% to €13.7 billion ($17.6 billion).

The group attributes this to a difficult market environment and lower sales of investment-oriented products, particularly in Italy and the Asia-Pacific region.

Allianz says its outlook for this year’s operating profit is unchanged at €8.2 billion ($10.5 billion).

CEO Michael Diekmann told shareholders Allianz is considering potential acquisitions in property and casualty insurance.

The group is considering targets in Europe and will continue to watch Asia and Eastern Europe for targets, even though prices for acquisitions there are still too high, Mr Diekmann said.