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One-off factors dent Allianz's Q4'17 net profit; dividend raise proposed

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One-off factors dent Allianz's Q4'17 net profit; dividend raise proposed

Allianz Group reported preliminary net income attributable to shareholders of €1.43 billion in the fourth quarter of 2017, down 22.3% from €1.84 billion in the prior-year period.

The German insurance group said its fourth-quarter 2017 results were affected by the one-off impact of U.S. tax changes and the sale of its stake in Oldenburgische Landesbank AG, which had a negative €210 million impact, as well as natural catastrophes. EPS for the quarter stood at €3.24, down from €4.03 a year earlier.

Total revenues increased on a yearly basis to €31.7 billion from €30.0 billion. Operating profit declined to €2.76 billion from nearly €3.00 billion.

Operating profit from property and casualty declined 9.6% to €1.31 billion, primarily due to a lower investment result and higher natural catastrophe claims. Life and health operating profit fell 13.5% to €1.06 billion.

The combined ratio in the P&C business was 94.5%, compared to 94.0% in the fourth quarter of 2016. The new business margin at the life and health insurance division strengthened year over year to 3.6% from 2.9%.

Operating profit in the asset management division rose 8.4% year over year to €697 million, mainly due to higher AUM-driven revenues.

For full year 2017, Allianz's attributable net income was €6.80 billion, compared to €6.96 billion in 2016. Operating profit came in at nearly €11.10 billion, compared to €11.06 billion a year ago.

EPS for the full year was €15.23, compared to the year-ago €15.18. Return on equity for the year was 11.8%, down from 12.3% in 2016.

"Natural catastrophes, storms and weather-related losses played a big role in 2017. But underlying performance measures remain strong and we remain committed to our goal of improving the combined ratio to a sustainable 94% by the end of 2018," CFO Giulio Terzariol said. He added that the group is targeting an operating profit of €11.1 billion in 2018, plus or minus €500 million, barring unforeseen events.

The company reported a Solvency II capitalization ratio of 229% at the end of 2017, up from 218% a year earlier.

Allianz proposed raising the dividend by 5.3% to €8.00 per share for 2017, compared to €7.60 per share for 2016.