Allianz no longer buys government bonds and pushes for restructuring

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Oliver Bates

The Allianz CEO considers the ECB's interest rate management to be wrong.

(Photo: AFP)

Frankfurt Allianz boss Oliver Bäte wants to accelerate the initiated reorganization of the insurer in the coming years even faster. "The main problem of our industry and the Alliance in particular is that sometimes we stifle our complexity," said CEO Bäte on Tuesday evening before the International Club of Frankfurt business journalists. In Germany alone, for example, Allianz carries around 62 types of legal protection policies, of which only a fraction is still sold.

The Dax 30 Group has embarked on a fundamental simplification in its new multi-year strategic plan. Old contracts will now be converted to new products and old IT systems will be shut down in the long term. By 2023, the Alliance wants to have turned off half of the legacy computer systems. In addition, more offers should be placed on uniform platforms.

Another important step will be the new digital direct insurer Allianz Direct, which will launch vehicle policies in November and benefit from economies of scale.

Low interest rates and new competitors are forcing the industry to pay more attention than ever to their costs and to look for high-yield investment vehicles. The major investor has said goodbye to German government bonds against this background. "We no longer buy German government bonds," said Bäte in Frankfurt. With a portfolio of 650 billion euros, the group is one of the largest investors in Germany. However, all German government bonds have a negative return. Investors must therefore pay to lend money to the federal government.

Bäte renewed his criticism of interest rate policy in this context. He believes that controlling interest rates is wrong, he complained. The central bank should be independent of politics. The opposite is true, however. The biggest beneficiary of this is the German state, which saves billions of interest costs.

With regard to possible major takeovers, Bäte was reluctant. "We did not find anything big – nothing at all – that would have made any sense for us," said the CEO. The prices are very high and "by the way also undifferentiated high". The alliance therefore seeks to expand its market position with smaller acquisitions in countries where opportunities exist.

Only a few days ago, Allianz had taken over parts of the Brazilian insurer Sul America for € 667 million, making it the number two on the market for motor vehicle policies in the country. In May, the Munich had already taken over the British property insurance business of Legal & General and the remaining shares in the British insurer Liverpool Victoria.

More: The new online insurer Allianz Direct is not welcomed internally everywhere. But by November at the latest he should go to the start.

Finance briefing



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