German insurer Allianz’s dividend payment ratio leapt to 81 per cent of net profit in 2011 as it held the shareholder payout steady while net profit almost halved.
Catastrophe claims and writedowns on investments in sovereign bonds and banks were behind the profit fall revealed by Europe’s biggest insurance group on Thursday. At 2.55 billion euros ($3.38 billion) it also missed consensus by almost half a billion euros.
Allianz said it would pay a dividend of 4.50 euros per share, unchanged from a year earlier.
“2011 was a tough year,” Chief Executive Michael Diekmann said in a statement
Analysts said while such a high dividend payout ratio was unsustainable, they saw Allianz’s decision to keep the dividend stable as a sign of the company’s confidence in its future earnings strength.
“We believe that Allianz wants to follow its peer group, which so far also proposed unchanged dividends. However, given the solid capitalisation of Allianz, we regard this as unproblematic,” WestLB analyst Andreas Schaefer said.
Reinsurer Swiss Re earlier on Thursday raised its dividend and said it tripled its profit for 2011 despite unusually severe natural disasters, and said the current year had started well with a rise in policy prices.
Allianz also forecast an improvement in 2012, saying its operating profit would come in at about 8.2 billion euros, plus or minus half a billion, compared with 2011 profit of 7.9 billion and consensus of almost 8.4 billion euros.
“We are expecting similar global economic conditions in 2012 with a moderate improvement in the second half of the year. The first steps to stabilize the euro zone have already been implemented successfully,” CEO Diekmann said.