Allianz Global Risks to ‘Raise Profile’ on Liability Coverage

April 26, 2005

Allianz Global Risks, the industrial business unit of Germany’s Allianz, announced its intention to raise the division’s “activity and profile in Liability insurance.” In an on-line interview on the Allianz Website (www.allianz.com) Thomas Juette, Global Head of Liability Underwriting, discussed the new strategy.

Asked about how the market perceives Allianz coverage in the liability area, he stated: “Although our Liability premium market share has increased in recent months, the perception remains that our company is mainly a Property player. Overall, Allianz’s Liability profile is still relatively underdeveloped internationally. However, we are working hard to change this view. In fact, we can offer up to 50 million euros [$65 million] of capacity to non-U.S. customers. We are also improving our already competitive Liability underwriting quality and technical skills and starting to employ cutting edge risk grading tools and loss control engineering.”

He outlined plans for achieving the goal as follows: “Our main global Liability product initiatives this year will be offered exclusively for European risks. First, we launched special Clinical Trials coverage in December, writing a pilot policy in the UK for a major pharmaceutical company’s European risks.

“Additionally, we are seriously considering offering an Excess Facility through a new dedicated operation of underwriters. Brokers with whom we have discussed this initiative have been very supportive. For corporate clients, these initiatives offer greater choice, and the more competition there is in a market, the greater the pressure will be on players concerning performance.”

One of the areas Allianz plans to concentrate on is excess coverage. “We are looking into offering an additional source for corporates’ capital needs above what they purchase in their local markets,” Juette continued. “Traditionally, sectors showing interest in such surplus capacity have included transportation, utilities, retail, construction and machinery. We are considering also adding value by issuing policies in local European languages as most policies presently tend to use American or Bermudian wordings.”

He sees the coming months in the liability market as more or less stable with some possible declines in some rates. “The process of consolidation of players is more or less over,” he observed. “However, the future of the major brokers will be important to monitor following recent investigations. This development will affect us as insurers, our corporate customers, our producers and the environment in which we operate.”

Allianz also plans to become a major player in environmental coverage. Increasing concerns over environmental liabilities have significantly raised the risks in the area. A recent EU directive is aimed at giving “compensation for damage from the release of toxic substances to public goods like soil, water or biodiversity, such as fish in a lake, on the basis of the so-called ‘polluter pays’ principle,’ Juette noted.

The full interview is available on the Allianz Web site, noted above.

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