MUNICH, Feb 22: German insurance giant Allianz reported record net profit of 7.021 billion euros ($9.2 billion) in 2006, well above target, on Thursday and said it expected further growth.

“In 2006, we didn't just achieve our ambitious targets in terms of the result, but surpassed them all by a wide margin,” said chief executive Michael Diekmann.

“We've delivered what we promised and will do so again in the coming years as well,” he added.

The net profit figure of 7.021 billion euros represented an increase of 60.3 per cent over the previous year's 4.38 billion euros.

In the wake of the positive performance, Allianz planned to raise the dividend payout to 3.80 euros per share for 2006 from 2 euros for 2005.

“By raising the dividend, we will let our shareholders, who stood by us in hard times, participate in the improved results,” said CEO Diekmann.

All divisions contributed to profit growth, but the strongest increase was seen in the banking division, which includes the Dresdner Bank unit.

Allianz also saw a reduction in income taxes and lower payments to minority shareholders.

Operating profit topped 10 billion euros for the first time, rising by 29.8 per cent to 10.386 billion euros.

Total revenues, which combines both gross premium income and revenues from its banking subsidiary Dresdner Bank, edged up by 0.2pc to 101.1 billion euros.

“Our focus on profit growth is paying off,” said Diekmann.

“Last year, with the merger of (Italian insurer) RAS into Allianz, the conversion into a European company (SE) and the reorganisation of Allianz in Germany and America, we made a lot of progress. 2006 was a year of systematic chance,” Diekmann said.

Last year was a “very good year” for the property and casualty business, Allianz said.

The so-called combined ratio -- which measures the amount of claims paid as a proportion of premium income -- improved, falling to 92.9 per cent in 2006 from 94.3 per cent in 2005.

Whereas premium income was steady at 43.7 billion euros, operating profit jumped by 21.9 per cent to 6.3 billion euros, with high growth rates achieved in the Asia-Pacific region and in central and eastern Europe.

The life and health business saw operating profit rise by 24 per cent to 2.6 billion euros, despite a 1.8-per cent decrease in revenues to 47.4 billion euros owing to a “market-induced downturn in Italy and a period of weak growth in the US market. ”The banking unit Dresdner Bank “performed very well”, finance chief Helmut Perlet said. “Productivity and efficiency have both improved and the bank is growing strongly.” Dresdner Bank's operating profit more than doubled to 1.361bn euros.

By contrast, the bank's net profit declined by 10.5 per cent to 895 million euros because the year-earlier figure had been inflated by one-off gains from divestments.—AFP