Allianz lifts dividend as 2017 revenue hits €126bn

Europe’s biggest insurer Allianz Group said its 2017 full-year revenues rose 3% to €126.1 billion, driven by improvements in all business segments, especially asset management and life and health.

Operating profit edged 0.4% higher to €11.1 billion in 2017, in the upper half of the group’s announced target range of €10.3 billion to €11.3 billion.

Munich-based Allianz said its property and casualty segment saw operating profit fall by 7.5% due primarily to higher natural catastrophe claims in 2017, the costliest year ever for the insurance industry.

“Claims stemming from California wildfires, hurricanes Harvey, Irma and Maria plus European storms and other natural catastrophes rose to 1.1 (2016: 0.7) billion euros for the year,” said Allianz.

Net income attributable to shareholders edged 2.3% lower to €6.8 billion in 2017, influenced by the one-off impact of U.S. tax changes and effects from the sale of Oldenburgische Landesbank (OLB).

“The group met its performance targets, maintained an extraordinary level of capital strength and returned three billion euros to shareholders through share buybacks in 2017,” said Allianz CEO Oliver Bäte.

The Allianz board will propose raising its dividend 5.3% to €8 per share for 2017.

The fourth quarter, though, was affected by one-off factors.

Quarterly revenues increased 5.6% on the year to €31.7 billion.

Operating profit in the quarter declined to €2.8 billion from €3 billion, due in part to a €0.2 billion rise in claims from natural catastrophes, a rise in other weather-related claims, and lower investment results.

Quarterly net income attributable to shareholders decreased 22% to €1.4 billion, affected by the one-off impact of U.S. tax changes and the sale of Oldenburgische Landesbank, which had a negative €210 million impact.

Allianz said its asset management segment saw its best operating result in four years in the fourth quarter.

“Hurricanes, storms and wildfires hit the insurance industry hard in 2017, making it the costliest natural catastrophe year ever for the insurance sector,” said Bäte.

“We worked quickly to help our customers get back on their feet. This is the most fulfilling part of our business. For natural catastrophes alone, we paid out some 1.1 billion euros in customer benefits.”

Allianz chief financial officer Giulio Terzariol, said: “The Group entered 2018 at cruising speed, placing our three-year performance targets within reach.

“We are confident that Allianz is well positioned to deliver strong financial results again this year.

“The Group aims to achieve an operating profit of 11.1 billion euros in 2018, plus or minus 500 million euros, barring unforeseen events.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.