Allianz Deutschland happy with profits rise
- 2008-03-17
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Results strong despite turmoil of past year. ALLIANZ Deutschland saw "excellent profits" in 2007 despite its wide-ranging restructuring and cost-cutting programme and a softening market, chief executive Gerhard Rupprecht said.
The German section of Europe’s largest insurer, which covers property & casualty, life and private health business, posted profits in 2007 of €1.97bn ($3bn), up from €1.8bn the year before. Gross premium income rose slightly from €25.6bn to €26.06bn.
Mr Rupprecht said: “When we record figures like these in a year of such drastic changes in our organisation, it is quite an achievement.” He added that dips in market share for P&C and health were due to market and political trends, not to underperformance. Allianz increased market share in life insurance, and has 15.7% of the German primary market over all lines, compared with 15.5% in 2006.
Allianz is combining its separate life, health and P&C insurers into one group, with a single back office. Around 5,700 full-time jobs will go. “We have already achieved 3,000 of those, and have agreements for a further 1,700,” Mr Rupprecht said. Allianz has agreed not to impose redundancies before 2009.
A cornerstone of the new system is a unified call centre, which had encountered teething problems. “There were days when we had no service at all due to software problems,” Mr Rupprecht said. These problems have been resolved.
Allianz group chief executive Michael Diekmann has declared the German model of one single back office to be the template for other national Allianz companies’ restructuring.
Allianz Deutschland saw a fall in P&C premium income, from €9.5bn to €9.4bn. This was due to a weaker price trend, said Mr Rupprecht. New business fell by 4.5%. But the combined ratio improved from 92.8% in 2006 to 92.6% — the cost ratio was 26.3%, from 27.9%.
In motor insurance, where a price war has been raging since 2004, the combined ratio was in the range of 102%.
Allianz lost 0.4% of 2008 renewals, and insured 8.8m vehicles.
The company recently lost a court case against agents who complained about a lower 6% commission on annual premiums for a special motor tariff, instead of the standard 10%. Mr Rupprecht said that Allianz had not decided yet whether to pursue the matter further in the courts.
