Performance Goals

Allianz's New Sense of Urgency

bäte dpa
The two sides of Allianz CEO Oliver Bäte: A friendly, modern customer-oriented face to the insurer's policy holders, and internally, the corporate restructurer, setting tougher profit goals and tying bonuses more to performance.
  • Why it matters

    Why it matters

    If Allianz does not revamp its business to reflect the new, tougher realities of the global insurance business, it risks being overtaken by low-cost online rivals.

  • Facts

    Facts

    • Allianz will set new, tougher performance goals for its individual business units and tie employee bonuses in part to them.
    • The CEO, Oliver Bäte, told investors on Tuesday that the insurer had been too patient in the past with under-performing businesses.
    • Mr. Bäte promised austerity and growth, but said the insurer, which employs 147,000 people, would not consider job cuts.
  • Audio

    Audio

  • Pdf

The insurance business used to be pretty lucrative in Germany, perhaps too lucrative. Companies like Allianz, the country’s biggest insurer and one of the world’s largest too, could always count on handsomely invested returns and the loyalty of security-conscious Germans as a steady source of sales and profit.

But no more. Interest rates are near zero, and there’s little chance of them rising soon. German consumers unimpressed with interest rate-linked insurance policies are turning to other options, such as real estate. They’re also starting to shop around for insurance – and many are finding cheaper alternatives from a host of lower-cost, online competitors.

So it wasn’t exactly unexpected on Tuesday when Oliver Bäte, the chief executive of Allianz, pledged to cut costs, woo new customers, introduce new performance benchmarks and get tougher with subsidiaries that fail to meet new, tougher profit goals.

In the new, more cut-throat German insurance sector, Allianz no longer has time on its side.

Want to keep reading?

Subscribe now or log in to read our coverage of Europe’s leading economy.