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EARNINGS

Allianz more than doubles net profit in 2012

German insurance giant Allianz said Thursday its net profit more than doubled last year as it shrugged off the worst of the financial crisis.

Allianz more than doubles net profit in 2012
Photo: DPA

Allianz said in a statement that its net profit amounted to €5.169 billion last year, up from €2.545 billion a year earlier. The 2011 figure had been impacted by write downs on Allianz’s holdings in Greek sovereign debt and investments, the insurer explained. But underlying or operating profit also increased, rising by 20.8 percent to €9.5 billion on a 2.7 percent rise in revenues to €106.4 billion.

All divisions achieved double-digit percentage growth in operating profit, Allianz said. In the fourth quarter alone, net profit soared 148 percent to €1.22 billion, operating profit rose by 13.8 percent to €2.275 billion and revenues grew by 3.6 percent to €25.9 billion.

Chief executive Michael Diekmann noted that the numbers exceeded the group’s forecast, which Allianz had already raised last year after a better than expected performance in the first three quarters. “Despite the impact from the storm Sandy, we exceeded our forecast,” Diekmann said.

In January, Allianz had said it took a hit of €455 million from Hurricane Sandy. But overall, insured losses for the industry were significantly lower in 2012 than in the previous year, when record figures were posted due to the earthquakes in Japan and New Zealand and severe floods in Thailand.

“Our results show how well our business model can handle the various turbulences from the financial crisis,” Diekmann said. Allianz would therefore pay an unchanged dividend of €4.50 per share for 2012, he added.

Looking ahead to the current year, Diekmann said that despite the low interest rate environment and overall global economic uncertainty, “I am confident that again in 2013 Allianz will maintain its profitability.”

“With cautious optimism and assuming that natural catastrophes and capital market turbulence do not exceed expected levels, our operating profit outlook for 2013 is €9.2 billion, plus or minus € 500 million,” Diekmann said.

On the Frankfurt stock exchange, Allianz shares were performing slightly better than the overall market, showing a loss of just 0.77 percent while the blue-chip DAX 30 index was down 1.05 percent.

AFP/mb

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ECONOMY

Sweden’s new right-wing govt slashes development aid

Sweden, one of the world's biggest international donors, is planning drastic aid cuts in the coming years, the country's new right-wing government said in its budget bill presented on Tuesday.

Sweden's new right-wing govt slashes development aid

Prime Minister Ulf Kristersson’s government said it planned to reduce the country’s international aid by 7.3 billion kronor ($673 million) in 2023, and by another 2.2 billion kronor in 2024.

That is around a 15-percent reduction from what had been planned by the previous left-wing government and means Sweden will abandon its foreign aid target of 1 percent of gross national income.

International aid for refugees will be capped at a maximum of eight percent of its aid, and will also be reduced.

According to the specialised site Donor Tracker, Sweden was the world’s eighth-biggest international aid donor in terms of absolute value last year, and the third-biggest in proportion to the size of its economy, donating 0.92 percent of its gross national income, behind Luxembourg and Norway.

The new government, which is backed for the first time by the anti-immigration Sweden Democrats, had announced in its government programme last month that it would be cutting foreign aid.

Since 1975, Stockholm has gone further than the UN’s recommendation of donating at least 0.7 percent of its wealth to development aid.

Despite its growth forecast being revised downwards — the economy is expected to shrink by 0.4 percent next year and grow by 2 percent in 2024 — the 2023 budget forecasts a surplus of 0.7 percent of gross domestic product.

It calls for an additional 40 billion kronor in spending, with rising envelopes for crime fighting and the building of new nuclear reactors, as well as a reduction in taxes on petrol and an increase in the defence budget.

The new government is a minority coalition made up of Kristersson’s conservative Moderates, the Christian Democrats and the Liberal party, backed in parliament by their key ally the Sweden Democrats to give them a majority.

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