German insurance broker AWD has reported a fall in second quarter profit due to a reduction in life policy sales and a drop-off in commission income.
Bloomberg has reported that the Hanover-based firm achieved a net income of E11 million in its second quarter, E1 million less than in Q2 2005.
Total sales actually increased 17% to E174.1 million in the quarter, however life products (many of which offer the best margins) made up a smaller share of overall sales, dropping 5% to 18% of total business. AWD also said a reduction in tax subsidies damaged profits.
The 8.3% fall in net income comes as AWD attempts to more away from its traditional fare of government-subsidized Riester pensions or mutual funds, which carry relatively low commission income, to new life insurance products that offer higher commissions.