By William Wilkes

FRANKFURT - Allianz SE (ALV.XE) shares rose early Friday after the German insurance company lifted its dividend, launched a sizeable buyback program and outlined the continued recovery of its U.S. fund manager Pacific Investment Management Co.

At 0805 GMT, Allianz shares were up 3.2% at 163.20 euros ($174.18), leading the DAX index.

The firm, Europe's biggest insurer by market value, said it would begin the EUR3 billion buyback Friday with unused capital from its acquisitions war chest for 2014 to 2016. The buyback will run for 12 months at most, the company said after Thursday's market close.

Allianz also proposed raising its 2016 dividend to EUR7.60 a share from EUR7.30 a share following solid 2016 results. Net profit rose 23% to EUR1.7 billion in the fourth quarter from the same period last year, boosted by a stronger performance at its property and casualty business. Net profit for the full year was up 3% at EUR6.9 billion.

"A share buyback worth up to EUR3 billion, a higher dividend, a strong final quarter of the year--what else could one want?" a Frankfurt trader said ahead of the market open.

Allianz said the recovery of its Pimco unit continued, with the second consecutive quarter of net asset inflows. Pimco went through a period of heavy client withdrawals following the departure of co-founder Bill Gross in 2014.

Allianz said it aims for a stable operating profit of EUR10.8 billion for 2017, plus or minus EUR500 million. The company will present further details on results from 0800 GMT Friday.

-Write to William Wilkes at william.wilkes@wsj.com

(END) Dow Jones Newswires

February 17, 2017 03:36 ET (08:36 GMT)