Allianz, the German insurance group, reported a rise in annual profit and a dividend increase despite a surge in claims as the insurance industry suffered its costliest year on record due to natural disasters.
Hurricanes Harvey, Irma and Maria, Californian wildfires and storms and flooding in Europe led to a 57% increase in claims to €1.1bn, left Allianz's fourth-quarter operating profit down 8% at €2.8bn, but still in line with market expectations.
Full-year operating profit also came in line with analysts' expectations, rising 0.4% to €11.1bn.
Full-year financial highlights
- Total revenues rise 3% to €126.1bn
- Net income attributable to shareholders falls 2.3% to €6.8bn
- Net inflows reach a record €150bn lifting assets under management to €1,448bn
- One-off charge related to changes in US taxation of €100m
- Board proposes dividend increase of 5.3% €8 per share
The company said it was targeting full-year operating profit in 2018 of between €10.6bn-€11.6bn and added that US tax rules, which saw a hit of €100m in 2017 would add €300m a year to operating profit from this year.
Oliver Bäte, chief executive of Allianz (above), said: "The group met its performance targets, maintained an extraordinary level of capital strength and returned €3bn to shareholders through share buybacks in 2017.
"Hurricanes, storms and wildfires hit the insurance industry hard in 2017, making it the costliest natural catastrophe year ever for the insurance sector.
“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 €1.1bn in customer benefits."
Shares opened a little lower on the Frankfurt Stock Exchange, down 0.4% to €188.80 in early trade.
Picture courtesy of Allianz website