Europe's biggest insurer Allianz today forecast a stagnating year ahead, mired in low economic growth and high unemployment.
It unveiled net profit of €1.076 billion in the fourth quarter, shy of the €1.17 billion expected in a Reuters poll, and lifted its dividend by almost one fifth.
But it said 2010 operating profit will match the €7.2 billion attained in 2009, leaving its shares little changed in early trading.
"Given the still volatile market environment, it is impossible to give a precise forecast," Chief Executive Michael Diekmann said in reference to the 2010 operating profit goal.
Analysts polled by Reuters on average forecast operating profit of €7.1 billion this year.
Insurers are struggling against low growth and high joblessness in developed markets, which dampens sales of property-casualty and life and health insurance policies.
Allianz plans to raise its dividend for 2009 by 17 per cent to €4.10 following a similar trend at peers like French rival AXA. The increase was a pip higher than the median forecast of €4.00 in the Reuters poll.
Allianz's share firmed 0.6 per cent to €82.25 by 8.49am ahead of a 0.2 per cent gain in the DJ Stoxx index of European insurance shares.
Analysts said an increase in profitability in the insurer's main business of property and casualty insurance, plus improvements in asset management, were supportive of the share.
Its fourth-quarter net profit in property-casualty was up by a fifth and that in asset management up by nearly half as financial markets recovered.
The group's quarterly net profit compares with a loss of more than €3 billion in the year-earlier quarter when Allianz sold its loss-making Dresdner Bank to Germany's second-biggest lender, Commerzbank.
Allianz said its net exposure to Greek sovereign debt was less than €1 billion.
Investors have been worried about corporate holdings of Greek government bonds because of the perilous state of the country's finances.
Allianz's stock has fallen by nearly 6 per cent from the start of the year, lagging a 2 per cent drop the DJ Stoxx insurance index but ahead of a 10 per cent drop at AXA, Europe's second-biggest insurer.
According to StarMine, which weights analysts' forecasts according to their track record, Allianz trades at 7.7 times 12-month forward earnings, exactly in line with AXA.
Reuters