UPDATE 2-Allianz holds dividend in face of profits slide

* Allianz to pay unchanged div of 4.50 euros per share

* 2011 hit by natural catastrophes, Greek impairment

* Says sees 2012 operating profit of 8.2 bln euros

* Sees economic conditions improving in H2

* Shares indicated 0.9 percent lower

By Maria Sheahan

FRANKFURT, Feb 23 (Reuters) - German insurer Allianz's dividend payment ratio leapt to 81 percent of net profit in 2011 as it held the shareholder payout steady while net profit almost halved.

Catastrophe claims and writedowns on investments in sovereign bonds and banks were behind the profit fall revealed by Europe's biggest insurance group on Thursday. At 2.55 billion euros ($3.38 billion) it also missed consensus by almost half a billion euros.

Allianz said it would pay a dividend of 4.50 euros per share, unchanged from a year earlier.

"2011 was a tough year," Chief Executive Michael Diekmann said in a statement.

Analysts said while such a high dividend payout ratio was unsustainable, they saw Allianz's decision to keep the dividend stable as a sign of the company's confidence in its future earnings strength.

"We believe that Allianz wants to follow its peer group, which so far also proposed unchanged dividends. However, given the solid capitalisation of Allianz, we regard this as unproblematic," WestLB analyst Andreas Schaefer said.

Reinsurer Swiss Re earlier on Thursday raised its dividend and said it tripled its profit for 2011 despite unusually severe natural disasters, and said the current year had started well with a rise in policy prices.

Allianz also forecast an improvement in 2012, saying its operating profit would come in at about 8.2 billion euros, plus or minus half a billion, compared with 2011 profit of 7.9 billion and consensus of almost 8.4 billion euros.

"We are expecting similar global economic conditions in 2012 with a moderate improvement in the second half of the year. The first steps to stabilize the euro zone have already been implemented successfully," CEO Diekmann said.

It did not provide an outlook for net profit.

IMPAIRMENTS Major insurers like Allianz and Axa were hit directly last year by big damage claims from natural catastrophes and writedowns on holdings of Greek government bonds, while indirectly, concerns about the euro area debt crisis held back sales of insurance investment products.

Allianz's net impairment charges for the year more than quadrupled to 1.93 billion euros, almost two thirds of which were on equities.

Allianz's holdings in lenders Commerzbank and UniCredit, for instance, have lost more than half of their market value over the past year as bank stocks tumbled. The insurer also said it has written down its Greek government bonds to 24.7 percent of their nominal value.

Shares of Allianz were indicated to open 0.9 percent lower, while the German blue-chip index is seen up 0.1 percent, according to premarket data.

Allianz's stock has lost about 15 percent of its value over the past year, slightly lagging the STOXX Europe 600 insurance index. Axa's share has fallen by nearly 20 percent over the same period.

Allianz trades at 7.7 times 12-month forward earnings, a premium to Europe's second biggest insurer, Axa, at a multiple of 6.6, according to Thomson Reuters StarMine, which weights analyst forecasts according to their track record.