Allianz rewards shareholders with higher dividend and share buy-back as profit soars

Allianz rewards shareholders with higher dividend and share buy-back as profit soars

The German insurance giant Allianz announced on Friday that it achieved a record operating profit and shareholders’ core net income in 2023, thanks to a strong performance in its life-health segment and solid results in all other business segments. The company also raised its dividend payout ratio and launched a new share buy-back program of up to 1 billion euros.

Allianz said its net profit in the fourth quarter of 2023 nearly doubled to 2.15 billion euros from 1.1 billion euros in the same period of 2022. Its operating profit in the quarter increased by 17% to 3.77 billion euros, driven by a 29% rise in operating profit in its life-health business, which benefited from higher investment margins and favorable currency effects. The company’s property-casualty business also improved its combined ratio to 94.9% from 94.3%, reflecting lower claims from natural catastrophes and better underwriting results.

 

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The company’s total business volume for the quarter grew by 7.8% to 39.6 billion euros, with internal growth of 9.8% mainly due to higher prices. The company’s asset management business saw net inflows of 13.4 billion euros in the quarter, despite a challenging market environment.

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For the full year of 2023, Allianz reported a 5.5% increase in total business volume to 161.7 billion euros, a 6.7% increase in operating profit to 14.7 billion euros, and a 30.3% increase in shareholders’ core net income to 9.1 billion euros. The company said it achieved its financial targets for 2023 and delivered a strong return on equity of 15.1%.

Allianz also announced a new dividend policy, increasing its regular dividend payout ratio to 60% from 50%. The company said it would propose a dividend of 13.80 euros per share for 2023, up from 11.40 euros per share for 2022. In addition, the company said it would launch a new share buy-back program of up to 1 billion euros, subject to regulatory approval.

Allianz’s chief executive officer Oliver Bäte said the company’s results demonstrated the trust that its customers place in Allianz, and the resilience and potential of its business model and its people. He said the company would continue to focus on increasing its productivity and customer growth in 2024, and set a target for operating profit of 14.8 billion euros, plus or minus 1 billion euros.

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Source : The Wall Street Journal

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