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Allianz (ALV) share price up after dividend rise and $4.1bn deal

By Jenny McCall

09:21, 3 December 2021

A picture of Allianz company sign hanging on building in Lugano. Allianz is a German multinational financial services company and the largest insurance company in the world
Allianz company sign hanging on building in Lugano – Photo: Shutterstock

German Insurance group Allianz (ALV) stock price soared by 1.34% at €200 ($225) in early morning trading today.

The group announced yesterday it plans to increase its dividend per share by at least 5% for the 2021 financial year compared to the previous year, which may be the key driver for the rise in its share price today.

Unlock $4.1bn

In a separate announcement today, that Allianz Life, which is part of the global insurance company, will introduce a new reinsurance agreement with Resolution Life and affiliates of Sixth Street, including Talcott Resolution Life Insurance Company and Resolution Life. The deal is for a $35 billion fixed index annuity portfolio.

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146.85 Price
-0.960% 1D Chg, %
Long position overnight fee 0.0113%
Short position overnight fee -0.0195%
Overnight fee time 22:00 (UTC)
Spread 0.090


0.67 Price
+1.060% 1D Chg, %
Long position overnight fee -0.0073%
Short position overnight fee -0.0009%
Overnight fee time 22:00 (UTC)
Spread 0.00040


1.27 Price
+0.640% 1D Chg, %
Long position overnight fee -0.0046%
Short position overnight fee -0.0036%
Overnight fee time 22:00 (UTC)
Spread 0.00170


0.67 Price
+1.060% 1D Chg, %
Long position overnight fee -0.0073%
Short position overnight fee -0.0009%
Overnight fee time 22:00 (UTC)
Spread 0.00040

Return on equity

The deal is set to unlock $4.1 billion in value and free up regulatory capital. Allianz has also said it will improve the Life divisions return on equity to around 18%.

“The transaction, which is the biggest so far for Allianz in terms of size of life back books, is in line with the group’s expanded strategy to leverage partnerships with strong reinsurance and risk management companies to monetize the value of in-force business and enhance the protection afforded to customers,” the company statement said.

Read more: Allianz (ALV) stock hits four-month high as outlook raised

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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