Allianz reported a fourth-quarter profit that jumped by 17 per cent as the parent company of Pacific Investment Management prepares to return more capital to investors.

Group operating profit rose to 3.77 billion euros (S$5.48 billion) on strong results from the life-health insurance business, Allianz said on Friday (Feb 23). That was slightly better than the 3.74 billion euros analysts had expected. The company targets an operating profit of between 13.8 billion euros and 15.8 billion euros this year, it said.

Allianz also plans to kick off a new share buyback of as much as 1 billion euros and it proposes to raise the dividend by a fifth to 13.80 euros per share, according to a separate statement late Thursday.

Chief executive officer Oliver Baete, who took the helm at Munich-based Allianz almost a decade ago, has made returning money to investors a priority. He has already handed shareholders about 40 billion euros in dividends and buybacks since early 2017, according to Bloomberg calculations.

Fourth-quarter operating profit in property-casualty insurance increased by 2 per cent, while life-health insurance earnings jumped 29 per cent. The asset management segment, which also includes Allianz Global Investors, saw profit rise by 13 per cent. 

Pimco’s third-party investors pulled 3 billion euros in the three months through December. That put a halt to a recovery that saw clients add money in each of the first three quarters of last year after the asset manager had suffered 75 billion euros in outflows in 2022.

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However, the US investment firm has since swung back to inflows as it pulled in the lion’s share of the more than 20 billion euros that clients shifted into Allianz’s asset management unit during the first six weeks of the current year, according to a spokesman. He was adding to comments made by chief financial officer Claire-Marie Coste-Lepoutre on Bloomberg TV.

Allianz amended its dividend policy, with regular payouts increasing to 60 per cent of net income attributable to shareholders from 50 per cent. It aims to pay a per-share dividend of at least the same amount as the previous year, it added, after previously targeting an increase of at least 5 per cent.

Some analysts have pointed to the possibility of Allianz moving from occasional buyback announcements throughout the year to an annual programme, which could eliminate some quarterly uncertainty. 

“We would have a preference for share buybacks on a yearly basis,” Coste-Lepoutre said in the TV interview.

The company might update investors at its capital markets day later this year. BLOOMBERG