UPDATE 1-Pimco problems won't dent Allianz rating for now - Fitch
* Pimco problems not hurting brand - Fitch
* Allianz forecasts asset management earnings to fall
* Allianz hints at higher dividend for 2014
FRANKFURT, March 14 (Reuters) - Management turmoil at Allianz asset manager Pimco is unlikely to threaten the credit standing of Europe's largest insurer, credit rating agency Fitch said on Friday.
"We are looking at the problem with asset management but for the time being we do not consider it as a trigger for a negative rating change," Fitch Senior Director Stephan Kalb told Reuters.
Allianz expects operating profit in asset management to fall this year and analysts are watching performance at fixed-income manager Pimco closely after a high-profile falling out between its star chief investment officer Bill Gross and Mohamed El-Erian, who is due to step down as Pimco's chief executive.
"Two leading people are having a fight but I would not expect this to hang over the company for long," Kalb said, pointing out that Pimco had deep investment expertise.
Earlier on Friday, Fitch affirmed Allianz's "AA-" rating with a stable outlook, saying the insurer's profitable property and casualty business would offset downward pressure on earnings from life insurance and investments this year.
Pimco has been suffering investor outflows for months but this was a cyclical problem rather than indicating any weakness in its business or strategic model, Kalb said.
"There is a management problem within Pimco but so far I would not consider that the brand is damaged," he said.
In its annual report published on Friday, Allianz reiterated its goal of earning operating profit of 9.5-10.5 billion euros ($13.2-$14.6 billion) this year, versus 10.1 billion in 2013.
The 2014 plan includes an expected decline in the contribution from asset management to 2.5-2.9 billion euros from a record 3.2 billion last year.
Analysts have been weighing whether the departure of El-Erian could add to the general momentum away from fixed-income investments, which are also dragging on performance at rival asset managers.
"We believe the main risk is that Pimco underperforms its 2.5-2.9 billion euro fiscal 2014 target operating profit range," said JP Morgan analyst Michael Huttner in a note to clients.
"But to fall to below 2.5 billion operating profit, we believe Pimco's assets under management would have to drop 13 percent or 180 billion euros to December 2014 and this is a large number," Huttner added.
Pimco's third party assets under management fell 10 percent to 1.1 trillion euros at the end of 2013, with nearly one-fifth of the decline attributed to net investor outflows.
Despite the headwinds in asset management, Allianz expressed confidence in its own prospects for 2014, hinting that it could raise its dividend payout after criticisms its dividend for 2013 had fallen short of expectations.
"In 2014, we will re-evaluate our target payout ratio of 40 percent," Allianz said in the annual report.
Allianz raised its dividend for 2013 by 0.80 euros to 5.30 euros per share, which was exactly in line with the median forecast in a Reuters poll of analysts.
Allianz has traditionally aimed to dedicate 20 percent of net income to invest in its existing operations, 20 percent to fund takeovers, 20 percent to purchase real assets and 40 percent to the dividend.
JP Morgan's Huttner forecast Allianz's dividend to rise by a further 0.80 euros to 6.10 euros per share for 2014, and said the insurer also had room to pay a special dividend of 2 euros per share.