reinventing insurance

Germany's Allianz eyes revamp after weathering storms

Clouds gathered over the insurance business last year. Source: DPA/Getty

In Munich on Friday morning, Allianz boss Oliver Bäte declared his intentions: To revamp Allianz’ property and casualty division to reverse a steady decline in market share in recent years. His comments came as Europe’s biggest insurer announced what amounted to a narrow escape in 2017, when profits edged up despite a spate of natural disasters, the effects of a US tax overhaul, one-off charges and a weakening US dollar.

“We are much too complicated,” said Mr. Bäte, speaking at a press conference to announce the company’s annual results. Allianz needs to simplify its products and cut costs, he said, and it needs to do all this while also undertaking a “cultural change” at the company. “That will be a long journey,” the CEO said.

Mr. Bäte said he plans to present a long-term business plan in late November, but was short on details. At its core, it will likely be a digital revamp of the property and casualty operations, analysts say. But the CEO said the company is also toying with the idea of making acquisitions in the sector even though prices are high. “So far, we haven’t found anything that suits us,” Mr. Bäte said. He declined to comment on reports Allianz is interested in the Bermuda-based reinsurance and property insurer, XL Group, which operates primarily in the US. XL is valued at about $11 billion (€8.8 billion) on the New York Stock Exchange.

Last year, Allianz spent €3 billion on acquisitions, but about half of that sum was to increase its stake in trade credit insurer Euler Hermes. In early 2017, the German insurer was reported to be interested in Australia’s QBE, but a bid never materialized.

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