Allianz (ETR:ALV) Investors Up 62% in Three Years: A Closer Look

Allianz SE (ETR:ALV), the German multinational financial services provider, has seen its share price surge by 62% over the past three years, leaving investors who bought in three years ago with a significant return on their investment. This impressive performance can be attributed to several key factors, including the company's dividend policy, strategic acquisitions, and organic growth initiatives.

Dividend Policy and Payout Ratio

Allianz has consistently increased its dividend payments, with a 21.05% year-over-year growth in 2024. This increase in shareholder payouts is a result of the company's new dividend policy, which offers a dividend per share that is the higher of a 50% payout ratio or a 5% increase from the preceding year's dividend. This policy aims to provide a higher resilience of payout and an upward trajectory for the dividend. As a result, Allianz's dividend per share has increased from €10.80 in 2022 to €13.80 in 2024, representing a 27.77% increase over two years.



Allianz's payout ratio has remained relatively stable over the past three years, hovering around 50%. This consistency in payout ratio indicates that the company has maintained a balance between rewarding shareholders and reinvesting in its business. This stable payout ratio, combined with the increasing dividend payments, has contributed to the company's strong financial performance and shareholder value.

Strategic Acquisitions and Organic Growth

Allianz has made several strategic acquisitions to expand its reach and strengthen its market position. For instance, the company acquired a 27.74% stake in European Reliance General Insurance Company S.A. (ATSE:EUPIC) in August 2022 and agreed to acquire Sanlam Limited in May 2023. These acquisitions have helped Allianz diversify its revenue streams and tap into new markets.

Organic growth initiatives have also been crucial for Allianz's performance. The company has focused on growing its preferred lines of business, such as protection & health, unit-linked, and capital-light products. Additionally, Allianz has been optimizing its product and process offerings to reduce expense ratios and improve efficiency. For example, the company aims to reduce its P/C expense ratio to about 26% by 2024 through product and process optimization and harmonization.

Future Growth Opportunities

Looking ahead, there are several opportunities for future growth for Allianz. The company has set ambitious targets for the 2022-24 cycle, including 5-7% annual growth in earnings per share (EPS) and a minimum 13% return-on-equity (RoE). Allianz plans to accelerate profitable growth by verticalizing operating models globally across business lines, expanding its leadership position in key markets, and building scalable platform models. The company also aims to become more capital-efficient and lower in volatility by reducing long-tail risks from its portfolio.

In conclusion, Allianz's (ETR:ALV) 62% growth over the past three years can be attributed to its dividend policy, strategic acquisitions, and organic growth initiatives. The company's commitment to rewarding shareholders through increasing dividend payments, while maintaining a stable payout ratio, has contributed to its strong financial performance and shareholder value. Additionally, Allianz's strategic acquisitions and organic growth initiatives have helped the company expand its reach and strengthen its market position. With ambitious targets and strategic plans in place, Allianz is well-positioned for future growth and success.