The Munich-based company said net profit in the January-March period was €29 million ($40 million) compared with a profit of €1.15 billion in the first quarter of 2008.
Total revenues for the period were down 36 percent to €1.4 billion from €2.2 billion a year earlier.
Allianz said in April that it would book charges of €400 million this year on its divestment of Dresdner Bank to Commerzbank AG, completed in January.
The company did not provide a detailed outlook for the current quarter or full year, but said it saw the first signs of recovery in its life and health insurance business during the first quarter.
"Allianz continues to cope successfully with the impact of the ongoing financial markets crisis on our business," said Helmut Perlet, the chief financial officer of Allianz in the company's report.
"We are strongly capitalized, our investment portfolio is of high quality and liquid, and our operating profitability proves resilient."
Allianz said first quarter premium revenues in the life and health insurance business rose nearly 6 percent, to €13 billion from €12.3 billion, as consumers returned to buying insurance.
Operating profit for the life and health insurance business fell, to €400 million from €600 million a year earlier. However, the first quarter result is much better than in the fourth quarter of 2008, when life and health insurance posted a €300 million operating loss as customers avoided buying insurance as the economic downturn gathered pace.
Allianz said first quarter property and casualty insurance gross written premiums increased 1.5 percent to €13.9 billion from €13.7 billion in the first quarter of 2008. Operating profit fell to €1 billion from €1.5 billion the year before.
The property and casualty combined ratio increased to 98.5 percent, compared to 94.8 percent in first quarter 2008. Combined ratio reflects the level of claims paid out and costs versus premiums paid in; a level under 100 indicates an underwriting business is profitable.