Allianz soothes with dividend after Pimco outflows

Pile Of Coins

German insurer Allianz raised its dividend and promised to keep the cash flowing after unveiling a forecast-beating jump in net profit in Q3.

Europe's biggest insurer on Thursday said it would pay out 50 percent of net profit as a dividend, compared with 40 percent up to now. The surprise move is likely to help mollify shareholders worried about management turmoil and investor outflows at asset management arm Pimco.

Allianz had said it would review its dividend policy by the end of the year after facing calls from analysts and investors to bring its dividend more into line with peers like Zurich Insurance, which pays out around 70 percent of net results.

"The management further intends to evaluate and pay out the unused budget earmarked for external growth every three years," Allianz said in a statement, adding that the first evaluation will take place at the end of 2016.

Allianz's quarterly operating and net profit rose by 5 percent and 11 percent respectively, handily beating the average forecasts in a Reuters poll of banks and brokerages.

Operating profit in property-casualty insurance and asset management were both ahead of average analyst expectations, but asset management still posted an 8 percent decline from the year earlier quarter.

Pacific Investment Management Co (Pimco) posted outflows of $48.3 billion across its open-ended funds in October following the surprise departure of Bill Gross, adding to the $25.5 billion of withdrawals the previous month, according to Morningstar data this week.

Read More More investors say goodbye to Gross-less Pimco

Gross, who co-founded Pimco in 1971 and built it into one of the largest investment firms in the world, managing $2 trillion of pension, endowment, and retirement money, resigned on Sept. 26 to join rival Janus Capital Group.

A majority of Pimco's firm-wide outflows in October stemmed from investors pulling money from its flagship Pimco Total Return Fund, which was managed by Gross.

Allianz on Thursday said that net outflows at Pimco were nearly 50 billion euros in the third quarter, but pointed out that a substantial majority of these occurred in the days following Gross's departure.

"Net outflow development after the resignation of Bill Gross is within our expectation," Allianz Chief Financial Officer Dieter Wemmer said in a statement.

Allianz also said it was "in reach" of earning 10.5 billion euros in operating profit this year, the upper end of its target range. Quarterly net profit jumped to 1.6 billion euros from 1.45 billion in the year earlier quarter, beating the 1.54 billion euros average in the Reuters poll.

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