BERLIN (AP) - German insurer Allianz SE said on Friday that its net profit dropped 46 percent in the second quarter as lower gains on assets and investments outweighed an improvement in business and revenues.

Allianz, based in Munich, earned 1.02 billion euros ($1.34 billion) in the April-June period, down from 1.87 billion euros a year earlier. Revenues rose 14.5 percent to 25.4 billion euros from 22.2 billion euros.

Operating earnings were up 22.7 percent to 2.19 billion euros from 1.79 billion euros, but income tax expenses rose and gains on investments slumped compared with a year earlier.

The company's investment in Hartford Financial Services Group Inc. led to a 167 million euros loss as Hartford's share price declined, while Allianz's gains from selling shares of the Industrial and Commercial Bank of China sank to 115 million euros from 666 million euros a year earlier.

Allianz noted that this year so far has been heavy in natural disaster losses. Claims from natural catastrophes - including flooding in eastern Europe and in Tennessee - totalled 255 million euros.

They accounted for 2.6 percentage points of the property and casualty business's combined ratio, compared with 1.1 a year earlier. However, the ratio improved to 96.3 percent from 98.9 percent - a lower ratio means an insurance underwriting business is more profitable.

Chief financial officer Oliver Baete said that "soft market conditions persisted in many insurance markets" but there were "positive price effects" in several core markets.

Allianz's first-half net earnings were up 35 percent to 2.57 billion euros from 1.9 billion euros a year earlier.

Revenues advanced 12.2 percent to 56 billion euros from 49.9 billion euros, while January to June operating profit was up 21.7 percent to 3.9 billion euros from 3.21 billion euros.

"Based on this very good result, we are confident that we can achieve our outlook for operating profit for the entire year of around 7.2 billion euros, with a fluctuation range of plus or minus 500 million euros," CEO Michael Diekmann said.

Allianz shares were up 1.1 percent at 91.18 euros in afternoon Frankfurt trading, outpacing the DAX index's overall rise of 0.5 percent.