TAKING THE PULSE: German insurers and reinsurers will report higher earnings for the second quarter compared with the previous quarter, reflecting substantial rises in stock markets and some easing of the financial crisis, while costs for large losses remained moderate and limited to an earthquake in Italy and a plane crash of an Air France Airbus A330 into the Atlantic en route to Paris from Rio de Janeiro.

However, second-quarter earnings will still be substantially lower than in the second quarter a year ago, mirroring continued hits from the crisis. The year-ago quarter preceded the insolvency of U.S. investment bank Lehman Brothers Holdings Inc. in September.

Most analysts compared their second-quarter forecasts with the first quarter, rather than with the year-earlier quarter, in order to ensure a better assessment of the earnings trend.

   COMPANIES TO WATCH: 
--- Munich Re (MUV2.XE) --- (Aug. 4)

MARKET EXPECTATIONS: Munich Re, one of the two largest reinsurers worldwide by premium income, along with Swiss Reinsurance Co. (RUKN.VX), is expected to report net profit of EUR606 million for the second quarter, according to an average forecast in a Dow Jones Newswires poll of 14 analysts. The figure is unchanged from the EUR606 million net profit reported in the year-earlier quarter and up 46% from EUR415 million in the first quarter.

Analysts forecast improvements in premium income both in property-casualty and life-health reinsurance operations, helped by the first-time consolidation of engineering insurance specialist Hartford Steam Boiler Inspection and Insurance Co. and by nine large five-year life reinsurance contracts signed earlier this year. As a result of moderate claims, the non-life combined ratio is expected to improve to 95.2% from 97.2% in the second quarter of last year and from 97.3% in the first quarter when winter storms drove the number up. Munich Re has said it expects to pay a mid-double-digit-million U.S. dollars amount for the plane crash.

However, the recession is expected to have curbed premium income of Munich Re's primary insurer Ergo Versicherungsgruppe AG (EVG2.XE), as people set aside less for insurance and retirement products.

The investment result will reflect a EUR107 million book gain from cutting Munich Re's stake in U.K. insurer Admiral Group PLC (ADM.LN) in April, while costs for a hedge against falling interest rates by Ergo's life insurance business will offset part of that. Ergo has said the crisis is making it more and more difficult to reach long-term growth targets and that it may revise them.

MAIN FOCUS: Update on contract renewals watched for further confirmation that rate increases are slowing and not broad-based, outlook on full-year targets and more comments on Ergo watched.

--- Hannover Re (HNR1.XE) --- (Aug. 6)

MARKET EXPECTATIONS: Hannover RE, one of the world's five largest reinsurers worldwide, is expected to show double-digit-percentage improvements in profits, investment result and premium income over the year-earlier quarter.

Thirteen analysts polled by Dow Jones Newswires forecast quarterly net profit of EUR150 million, up 49% from EUR100.8 million in the second quarter of 2008, but 31% lower than EUR216.1 million in the first quarter. Investment result is forecast to have risen 38% to EUR251 million from EUR182.5 million a year ago and 27% from EUR198.2 million in the first quarter.

Landesbank Baden-Wuerttemberg analysts expect the investment result to be the main quarterly earnings driver, as the year-ago quarter suffered from hefty write-downs on the stock portfolio. Hannover Re cut its stock exposure close to 1% in the third quarter last year.

Premium income is expected to benefit from the first-time contribution of the U.S. individual life reinsurance portfolio that Hannover Re bought from Bermuda-based reinsurer Scottish Re Group Ltd. (SKRRF) in the first quarter.

MAIN FOCUS: Investors to eye update on strategy, full-year targets.

--- Allianz SE (AZ) --- (Aug. 7)

MARKET EXPECTATIONS: Allianz SE (AZ), Europe's largest primary insurer by market capitalization, "will likely show a markedly better level of overall profitability in Q2 over Q1," Deutsche Bank analyst Spencer Horgan writes.

According to analysts in six brokerage houses, Allianz will report a net profit in a range of EUR1.4 billion to EUR1.85 billion for the second quarter, compared with EUR1.54 billion a year ago and EUR29 million in the first quarter.

Compared with the previous quarter, UniCredit analysts expect all business segments to make a positive contribution and that notably life/health insurance and asset management benefited from rising stock markets.

Allianz will also benefit from the closure of last year's sale of loss-making Dresdner Bank, on which it still took a EUR400 million last hit in the first quarter.

In addition, the sale of half its stake in China's Industrial & Commercial Bank of China Ltd. (1398.HK) to 0.97% in April is expected to contribute a gain of around EUR700 million. Its investment in Hartford Financial Services Group Inc. (HIG) could also make a positive contribution compared with a hit of about EUR140 million in the first quarter.

However, property-casualty insurance business will reflect pains from high exposure to rising costs such as in credit insurance and be a drag on earnings.

MAIN FOCUS: Update on strategy for improving weak non-life insurance underwriting eyed, also on strategic plans with Hartford watched, which recently posted its fourth consecutive quarterly loss and cut 2009 operating targets.

Company Web sites: www.munichre.com; www.hannover-re.comwww.allianz.com;

-By Ulrike Dauer, Dow Jones Newswires; +49 69 29725 500; ulrike.dauer@dowjones.com