Allianz to hike dividends by 5% each year from 2021

(Corrects to say parties of reinsurance deal include Resolution Life, Paragraph 5)

BERLIN (Reuters) - German financial services company Allianz said on Friday it would increase dividends by 5% each year from 2021 as it raised mid-term guidance, citing progress of its business simplification strategy.

The company said it would give shareholders half of its earnings, which it expects to grow 5-7% each year over 2022-2024, as it plans to increase the scale of its business and focus on efficient capital management.

"The new dividend policy reflects our confidence in the financial strength and the earnings power of the Allianz Group," Chief Financial Officer Giulio Terzariol said in a statement.

Allianz said that after the higher dividend payments, it will still have 12 billion euros ($13.55 billion) of excess capital that could be used for share buybacks or acquisitions.

Allianz added it had entered a reinsurance agreement with Resolution Life and affiliates of Sixth Street for a $35-billion fixed index annuity portfolio as part of its strategy.

($1 = 0.8857 euros) (This story corrects to say parties of reinsurance deal include Resolution Life, paragraph 5)

(Reporting by Miranda Murray and Christina Amann, Writing by Zuzanna Szymanska; editing by Paul Carrel and Jason Neely)