Germany’s Allianz AG, the world’s largest insurer, measured by gross premiums written, will launch a revamped division, Allianz Global Risks (AGR), on January 1, 2002, in an effort to improve its performance in the global industrial insurance sector.
A reporter for Allianz.com news, the company’s website, recently met with Steve Schleisman, CEO of AGR, and recorded his frank views on the new operation. Asked why was there a need to create a new, global division for industrial insurance, and what Allianz expects from AGR, Schleisman replied that “The Board of Management of Allianz Group decided to establish our industrial business as a global managed segment. It is the one exception to our decentralized business model. Our industrial insurance business will still continue to be done locally by our operating entities throughout the world, but for this segment of our business, Allianz Global Risks (AGR) has been given global profit center responsibility.”
Asked for a specific reason why Allianz was making the change, Schliesmen responded with unusual candor, saying that, “in the past, we’ve lost an immense amount of money. A common measure that I subscribe to is combined ratio. You have to have a combined ratio of 100 percent or lower to even be ‘in the club’. Our current combined ratio for this segment is something above 140 percent. In simple terms, for every euro we take in, we lose another 40 cents on that euro. Even for Allianz, this is not sustainable.”
The interview coincided with the failure to conclude an agreement between German insurers and the government to cover the costs of terrorist risk coverage. Allianz CEO Henning Schulte-Noelle has been leading efforts establish a state-backed insurance pool to cover damage claims related to terrorism, but the parties remain at odds over the amount of risk each sector would cover. The insurers will conduct further discussions with the government in January in an attempt to reach an agreement.”|”allianz, prepares, launch, global, risk, division
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