By Friedrich Geiger 

BERLIN -- Allianz SE said late Thursday it would raise its dividend following solid 2016 results and launch a EUR3 billion ($3.18 billion) share buyback after failing to use funds it had set aside for potential acquisitions.

In the quarter ended Dec. 31, the German insurer's net profit rose 23% to EUR1.7 billion from the year-earlier period, helped by stronger underwriting in the property and casualty segment and an improved nonoperating result. Fourth-quarter revenues increased 0.9% to EUR30 billion.

Management proposed to raise the 2016 dividend to EUR7.60 a share from EUR7.30 a share. The company also said it would conduct a share buyback with a volume of up to EUR3 billion to return unused capital from its budget for external growth from 2014 to 2016. The buyback, which starts Friday, will run for 12 months at most.

Allianz said the recovery of U.S. fund manager Pacific Investment Management Co. continued in the fourth quarter, with net asset inflows of EUR5.9 billion.

"The Pimco turnaround is on track as the fourth quarter was the second consecutive reporting period with positive third-party net inflows," said Chief Financial Officer Dieter Wemmer about the subsidiary. Pimco went through a turbulent period marked by 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, the same figure that the company reached last year, plus or minus EUR500 million.

Allianz will present further details on its results on Friday.

Write to Friedrich Geiger at friedrich.geiger@wsj.com

(END) Dow Jones Newswires

February 16, 2017 15:17 ET (20:17 GMT)