Allianz wants to increase dividend significantly

Germany's largest insurance group Allianz reports record profits despite a weak economy in many parts of the world. The operating result rose by 6.7 percent to 14.7 billion euros last year, as the Munich-based Dax group announced on Friday. Price increases, with which Allianz passed on the costs of inflation to its customers, played a significant role in this. The profit attributable to shareholders even increased by a third to 8.5 billion euros. Accordingly, Allianz intends to increase this year's dividend by 21 percent to 13.80 euros per share.

CEO Oliver Bäte spoke of a "very, very successful year" and said that the Group had by far the strongest brand in the industry. The development of the share price is one of the Management Board's priorities. In addition to the dividend increase, Bäte had a second message that should please the financial market: in future, the Group, which employs a good 150,000 people worldwide, intends to regularly pay out 60 percent of its profits - instead of half as before. Nevertheless, the stock market reacted with disappointment: Allianz shares fell sharply in Frankfurt by lunchtime, although the DAX as a whole rose. Allianz shares had risen sharply over the past twelve months.

The forecast for this year is rather cautious: Bäte and the new CFO Claire-Marie Coste-Lepoutre held out the prospect of 14.8 billion euros in operating profit, with the usual range of plus or minus one billion. Although the mean value would hardly be more than last year, the Board of Management is aiming for the upper half: "That leaves plenty of scope for overachievement," said Coste-Lepoutre.

Bäte emphasized that all "three cylinders" of the Allianz business had performed well: property and casualty insurance, life and private health insurance and asset management. The property and casualty division increased its result by a comparatively modest 1.6 percent to 1.6 billion euros. This was partly due to inflation, which drove repair costs for cars and buildings to new heights.

Motor vehicle insurance in particular is currently more of a nuisance than a joy for many insurers: "In car insurance, we had absurd price increases for spare parts and repair costs. We have some garages that charge 300 euros per hour to repair an electric car," Bäte complained. "That's what's really driving prices, not insurers' profits." In many European markets, motor insurance is making losses.

The record result was largely due to the life/health division, which alone increased its operating result from 4.2 billion to 5.2 billion euros. Apart from the insurance business, Allianz is also one of the world's largest asset managers: at the end of 2023, the Group had invested a total of 2.2 trillion euros of third-party and own funds. Although this was slightly more than a year earlier, operating profit fell from 3.2 billion to 3.1 billion. This was due to exchange rate effects. The weaker dollar also dampened the financial investment results of other groups.