(Adds detail, comments from analyst call, shares)
By Andrea Mandala
MILAN, Feb 14 (Reuters) - UnipolSai on Friday raised its dividend for the year by 10% and signalled more increases could be in the pipeline after the insurer’s full-year earnings beat expectations thanks to lower taxes and a stronger non-life performance.
Italy’s second largest insurer raised its dividend to 0.16 euro per share as its full-year net profit, stripping out one-off charges relating to staff layoffs, rose 3.2% at 721 million euros ($781 million).
Earnings in 2018 had included a capital gain of 309 million euros from a disposal.
“We will meet our targets on dividends,” Unipol CEO Carlo Cimbri told analysts, adding that the company “might even manage some improvement.”
UnipolSai, more than 80% owned by Bologna-based holding Unipol Group, last year had pledged to pay out total dividends of 1.3 billion euros up to 2021. The parent group promised to pay out 600 million euros in the same period.
JP Morgan analysts said the biggest positive surprise was the dividend. “Overall figures show both entities well on track to deliver against FY19-21 targets we believe” they said.
UnipolSai shares were up 4.3% at 1239 GMT while shares in its parent group climbed 6%.
UnipolSai’s net premiums last year rose around 21% to 13.3 billion euros, boosted by a buoyant life sector which offset a flat auto business, which has hit by pricing pressures.
Life insurance earnings, however, fell 67% due to lower investment returns.
The solvency ratio, a key measure of financial strength, stood at 250%, up from 202% in 2018, the company said.
$1 = 0.9229 euros Reporting by Andrea Mandalà; editing by Stephen Jewkes and Jane Merriman