Talanx AG (TLX), the German insurer that sold shares to the public last year, said it will pay its first dividend as a listed firm after profit rose 22 percent in 2012.
Net income advanced to 630 million euros ($815 million) from 515 million euros in 2011, the Hanover, Germany-based insurer said in a statement today. Talanx proposed a 1.05 euro a share dividend, according to the statement.
Insurers were largely spared major losses from natural disasters in 2012, with the exception of Hurricane Sandy, which lashed the densely populated U.S. Northeast coast in October. Talanx said it will bolster underwriting this year to compensate for lower returns on investment as Europe’s debt crisis and “low” interest rates limit profits from capital markets.
“We now have the financial flexibility to maintain a successful long-term position on the global insurance market in future,” Chief Executive Officer Herbert Haas said in the statement. “The outlook remains extremely challenging.”
The insurer plans to increase net income this year to more than 650 million euros and wants to pay out 35 percent to 45 percent of profit in dividends, according to the statement.
Talanx owns 50.2 percent of Hannover Re (HNR1), the world’s fourth-largest reinsurer. Hannover Re proposed a record dividend two weeks ago after profit rose to the highest in the company’s history.
Talanx shares climbed 9.4 percent this year to 23.49 euros, valuing the company at 5.9 billion euros. The Stoxx Insurance 600 (SXIP) index advanced 6.1 percent this year.
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