Europe’s largest insurance group Allianz is making big waves in 2017. Having already made no secret of the fact that it is on the prowl for acquisitions – with a deal for Generali and another possible takeover of QBE both rumoured in recent weeks – the powerhouse has once again showcased its might by revealing a huge share buyback which could be worth as much as €3 billion.
The buyback is set to begin today (February 17) and will last for no more than 12 months as the German giant aims to fulfil a promise to its shareholders to return the cash it had set aside for acquisitions.
It can afford to do so, on the back of a 23% surge in fourth quarter profits. During the final three months of the year its net profits attributable to shareholders reached €1.74 billion, representing a rise from €1.42 billion in the same period one year earlier.
In terms of its performance, it was the company’s life and health insurance business that led the way with operating profits of €4.1 billion, representing a rise of 9.3%.
There was a caveat in its performance, however, with profits in its property and casualty arm dropping by 4.2% to stand at €5.4 billion; while its asset management business also posted a 4% drop in profits at €2.2 billion.
“The year was filled with surprises, not all of them welcome, that challenged many assumptions, fueled geopolitical uncertainty and market volatility, and that make 2017 difficult to predict,” commented Oliver Bäte, chief executive officer of Allianz SE. “Nevertheless, we feel confident enough to raise our operating profit target range. The group aims to achieve an operating result of 10.8 billion euros, plus or minus 500 million euros, in 2017, barring unforeseen events, crises or natural catastrophes.”
As for its acquisition plans going forward, a spokesman for the company would not comment on how the buyback would affect plans when approached by the Financial Times. However, the publication noted that Allianz did state that in the future the link between its mergers and acquisitions budget and shareholder payouts would be scrapped.
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