Munich Despite the recent record result, Allianz boss Oliver Bäte calls for significantly greater efforts in the coming years. “Even if we have already achieved a lot, I believe that we are far from exhausting the potential of our alliance,” he said in his speech at the virtual general meeting of the Dax group on Thursday. He sees a need for improvement, especially in dealing with customers, in the challenges of digitization and in the development of new business areas. In addition, Allianz must become even more crisis-proof in the future.
Last year, Allianz earned a record result of 14.2 billion euros. This level should also be reached this year – with a range of one billion euros up and down.
The proposed dividend of EUR 11.40 per share was 5.6 percent higher than in the previous year and is set to increase in the future. This is precisely why the Allianz boss, whose contract extension the supervisory board is to decide this year, is the driver.
In the future, Allianz wants to focus on several points: First and foremost are the approximately 122 million customers that the group has worldwide. In recent years, they have given the group better grades in surveys. In Germany, Allianz recently achieved 4.6 out of a possible five stars. “But we are not yet able to translate this satisfaction into stronger customer growth,” says Bäte.
Insurer Allianz: Planning in terms of digitization is still “too complex and too expensive”
The Allianz boss was also dissatisfied with the progress of digitization in the company. Bäte spoke of a “mammoth project” in the simplification and renewal of the IT systems. It is the speed, efficiency and reliability in the implementation of new IT projects that determine future business success.
“We are still planning too complex and too expensive, we still have to improve the cooperation between IT and specialist departments,” explained Bäte. However, around five billion euros are invested in the digital infrastructure every year. In this context, it is also about technical excellence, which in turn should ensure further customer growth.
The group has been working on new growth areas for years. For the African market, the group announced last year that it was setting up a joint venture with the South African insurer Sanlam. The cooperation is to start at the beginning of July, serve 30 million customers and turn over three billion euros per year.
“And we are only at the beginning of our journey to serve the African market,” said Bäte. The Allianz boss also counts the European direct insurers Allianz Direct and Allianz Partners among the new growth areas. The globally active subsidiary is active in the areas of mobility, health and travel.
>> Read here: “Anyone who wants to get ahead in the company, change now” – This Allianz subsidiary is to take off in Europe
The development of a digital platform for claims in car insurance is still in its infancy. Through the cooperation with three partners and the use of artificial intelligence, damage should be better assessed and processed faster. “We will also offer these services outside the Allianz Group and thus open up another growth area,” Bäte announced publicly for the first time.
Investors demand stronger controls: “Black swans” as a mega risk
But the Allianz boss also gave a rare glimpse of the extreme challenges ahead, including risks that investors refer to as “black swans.” “We also have to arm ourselves against very improbable risks that harbor a great potential for losses,” said Bäte literally.
It is always important to ask what the worst that can happen is and how Allianz can prepare for it. “The most important lever here: a culture that sees a high level of trust and strong controls as two sides of the same coin,” demanded Bäte.
Deka fund manager demands clear structures from Allianz after Structured Alpha scandal
Recently, investors at Allianz have been missing appropriate self-monitoring. At the general meeting, a number of shareholders criticized the group’s handling of the structured alpha funds of the subsidiary AGI in the USA.
At the beginning of the corona crisis, speculative hedge funds recorded high losses. The agreement with the US authorities and the compensation to investors cost the group 5.8 billion dollars last year.
“A disaster like the one in Structured Alpha must never happen again,” demanded Andreas Thomae. The fund manager from Deka Investment represented around 1.3 percent of Allianz’s share capital. He unequivocally asked Bäte to create clear structures so that such a home-made fraud, as Thomae says, does not happen again.
Oliver Bäte responded with a mixture of defence, understanding, humility and looking ahead. The past year was marked by the processing of the scandal for the entire board. Therefore, in less than twelve months, a fair compensation was decided.
At the same time, Bäte also went on the offensive on Thursday. “We would like to conclude the processing of the events surrounding the structured alpha funds today,” said the Allianz boss.
For the future, he promised the shareholders that the group would raise the manifold regulatory rules from a “mandatory exercise” to a core discipline of top management.
More: Allianz balance sheet check: record numbers – and still some problems