Allianz CEO Target of Growing Dissent

  • Why it matters

    Why it matters

    Allianz is Europe’s biggest insurer based on revenue, but internal dissatisfaction could derail its future.

  • Facts


    • Allianz CEO Oliver Bäte’s plans to change the company’s culture has led to leaks as internal unrest grows.
    • Mr. Bäte’s predecessor Michael Diekmann is set to be appointed to the company’s supervisory board in May.
    • Allianz has to enter the digital age to remain competitive and relevant.
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Germany Allianz
Steady hand or wrecking ball? Picture source: picture alliance / AP Photo

Internal unrest against changes to its century old culture appears to be the only threat for Europe’s biggest insurer, Allianz, and its beleaguered Chief Executive Oliver Bäte. Economically, the company is riding a wave of success.

Mr. Bäte has set out to completely overhaul the German company since he took over the top job in 2015. Yet resistance to his plans is growing at the company’s Munich headquarters and among its more than 140,000 employees. The 52-year-old, however, has received backing for his plans from the company’s employee representatives.

Mr. Bäte is trying to modernize the culture of a company that has been steeped in tradition for more than a century. Allianz is a special company, unlike any other German business. It stands for solidarity and stability. Conservative decision-making has been a staple of the insurer, but Mr. Bäte is trying to shake that up. He is setting high targets for returns, while expecting low costs and calling for a digital revolution – all at the same time.

It’s no accident that the leaks coincide with the anticipated return of former Allianz CEO Michael Diekmann to the company’s supervisory board, where he will replace Helmut Perlet as chairman.

And despite the company’s financial success, Mr. Bäte is not offering job security to his employees. There has been talk that mid-level management positions could be eliminated. Murmurs of discontent are growing in the lower levels of Allianz’s headquarters as a consequence.

Indeed, Allianz is not fighting other European insurance companies such as Zurich or Generali, but instead the growing dissatisfaction within its own labor force. And the target of the unrest is the man at the top – Mr. Bäte.

More than two years into his leadership, Mr. Bäte is dividing the insurer more than any other CEO in the company’s history. His supporters, and there are many of them, say it’s because he has awoken a sleeping giant and is preparing the company for the digital age. In the view of his opponents, he is leading a well-oiled machine into chaos.

Despite the grumblings, there’s no need for the chief executive to be nervous about his job. Powerful employee representatives have his back. According to information obtained by Handelsblatt, the employee represetatives have gone against their constituency and vowed to support Mr. Bäte’s overhaul in the non-executive supervisory board, which has the power to hire and fire managers.

“We need change,” a high-ranking employee representative said. There’s no second guessing of the CEO’s strategy within the supervisory board, the representative added. Rather, there is an open dialogue with the whole management team.

The support of the employee representatives is an important signal to the company’s labor force. That’s because nothing happens at Allianz without the support of the six employee representatives that sit on the 12-member supervisory board, especially a cultural revolution.

For Mr. Bäte, the backing is an important sign of trust. And judging by Allianz’s financial numbers, Mr. Bäte could simply relax in his fourth-floor corner office. Last year, the company generated €10.8 billion in profits. In a recent survey, the majority of Allianz employees said their CEO has good leadership skills.

Nevertheless, the company’s top dog does not have the backing of all employees. Within two-and-a-half years, he has not only installed a new agenda at the insurance giant, called “renew and continue,” he also made more enemies than any other CEO before him. It’s a situation that has even reached outsiders. Internal details and anecdotes of the infamously secretive company have suddenly become public. The reason for those leaks is to put Mr. Bäte in a bad light.

It’s no accident that the leaks coincide with the anticipated return of former Allianz CEO Michael Diekmann to the company’s supervisory board, where he will replace Helmut Perlet as chairman. Many people at Allianz look to Mr. Diekmann as the one who will bring back stability.

“It feels a little forced, the overhaul comes with brute force,” said the boss of a competitor, who declined to be named.. “Maybe Mr. Bäte wants too much too fast.” The executive chairman of another large European competitor describes Mr. Bäte as “abrupt and arrogant in his interactions.” And a major Allianz investor couldn’t believe what he heard when the CEO told him that “he wants to get the shack growing again.”

Not everyone understands why the company needs a complete overhaul when it generates billion-dollar profits.

On the operational side, Mr. Bäte knows what he is doing, even his critics hate to admit it. Allianz’s most recent profits were close to record levels. The insurer has also been able to turn its US subsidiary PIMCO around. The California-based investment management company is heading toward a net cash flow of at least $10 billion per quarter. Its life insurance business is also exceeding expectations.

The result of the success has been that Allianz’s share price is trading 15 percentage points higher than the European insurance sector benchmark since the beginning of 2015. The company’s value has doubled since 2010. The company’s economic success is undeniable.

The success, however, has not prevented the rise of internal resistance against Mr. Bäte. Not everyone understands why the company needs a complete overhaul when it is generating billion-dollar profits.

And the company’s old guard has struggled with the idea of having to let go of certain privileges. In addition, many take offense with his brash behavior. An exception is 63-year-old Markus Faulhaber, who heads Allianz’s life insurance division and has been with the company for 36 years. In an interview, he said Allianz needs to change with the times to not lose touch with its customers.

Insiders believe that Mr. Diekmann will keep the CEO on a short leash once he joins the supervisory board. Expectations are that Mr. Diekmann intends to take on a leadership role behind the scenes. Mr. Diekmann knows what the company is capable of if led in the right direction.

“It’s less about reducing costs and more about setting the path for the future,” he said in 2006 after announcing cost cutting measures as its CEO. “Allianz has to become more modern, flexible and faster, while at the same time remaining performance oriented.”

Those words could be attributed to Mr. Bäte, 11 years after Mr. Diekmann uttered them.


Carsten Herz leads Handelsblatt’s asset management and insurance coverage and is based in Frankfurt. Christian Schnell covers the auto industry in Germany. To contact the authors:, 

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