Vienna - Vienna Insurance Group, Austria's second largest insurer, said Tuesday its year-on-year net profit growth slowed down to 3.4 per cent in the third quarter, compared with 37.4 per cent in the second quarter.

Net profits rose to 93 million euros (122 million dollars) between July and September.

In this period, expenses for claims increased by 16.8 per cent to 1.34 billion euros, while net income from investments decreased by 1.2 per cent to 188 million euros.

The insurer's total income rose to 1.9 billion euros in the third quarter, 19.2 per cent more than in the same period last year. In the second quarter, Vienna Insurance Group had reported a 27-per-cent increase in income.

Business in Central and Eastern Europe continued to drive group results in the first three quarters, as written premiums increased by 36.2 per cent to 2.89 billion euros in the region.

"Organic growth was particularly strong in the Czech Republic, in Romania and in Poland, and so far we have not detected any decline in the demand for insurance products in the CEE region," chief executive Guenter Geyer said.

Despite these results, the company's share price plummeted by 30 per cent in October, as investors shunned financial companies with exposure to Central and Eastern Europe.

The Austrian insurer stuck to its gross profit forecast of 540 million euros for 2008, but said that results depended on the development of the capital markets in the fourth quarter. (dpa)