The Allianz SE logo sits on a top of a building in Berlin, Germany, on Wednesday, Jan. 4, 2017. Germany had another year of firm growth in 2016 and should continue to be propelled in 2017 by consumer spending. Photographer: Krisztian Bocsi/Bloomberg
© FT montage / Bloomberg

Germany's largest insurance group Allianz is increasing its dividend for 2017 by 5 percent to €8 a share despite being hit by surging claims related to natural catastrophes in what turned out to be the costliest year on record for the global insurance industry.

At Allianz, wild fires in California, the hurricanes Harvey, Irma and Maria as well as storms in Europe last year caused a 57 per cent surge in claims linked to natural catastrophes to €1.1bn. 

This surge dented Allianz' fourth-quarter operating profit by 8 percent to €2.8bn, which was in line with average expectations of analysts polled by Standard & Poor's Global Market Intelligence. For the full year, the group’s operating profit edged up 0.4 per cent to €11.1bn, also meeting analyst expectations.

For 2018, Chief Financial Officer of Allianz SE, Giulio Terzariol, is targeting an operational profit of between €10.6bn and €11.6bn. The U.S. corporate tax cuts, which in 2017 caused a negative one-off charge of €100m, will increase net profit by around €300m per year from 2018. 

Net income attributable to shareholders fell by more than a fifth to €1.4bn in the final quarter of 2017, while in the whole year after-tax profit fell by 2.3 per cent to €6.8bn.

The group's Solvency II capitalisation ratio, an important yardstick for the balance sheet strength of insurers, at the end of 2017 stood at 229 per cent, up from 218 per cent a year earlier, well above the regulatory minimum of 160 per cent. Allianz in 2017 has kicked off two share-buy back programs totalling €5bn. 

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