We want to dovetail asset management and life insurance even more closely.

Wimmer is now focusing on an even stronger interlocking of life insurance and asset management. The group’s two asset managers, AGI and Pimco, are to increasingly invest customer funds from long-term contracts in alternative investments. Pimco focuses on real estate, while AGI has expertise in the areas of private equity and infrastructure investments.

Wimmer can also imagine future acquisitions in asset management. However, AGI and Pimco are to remain independent units within the group.

Read the entire interview here:

Mr. Wimmer, you have had two jobs at Allianz Leben for the past six months because of your successor Katja de la Viña’s corona disease. How does this work for you?
The strategic trends are the same in both jobs: the global zero interest rate policy, investments in alternative investments and the trend towards a CO2-reduced economy. We want to dovetail asset management and life insurance even more closely. Nevertheless, I am looking forward to handing over life to Katja de la Viña as the new CEO of Allianz at the end of March.

The most difficult topic that you have taken on in the new position is the structured alpha problem of the subsidiary AGI in the USA. How do you want to solve them?
We have reached an agreement with the majority of the plaintiffs. Now we must finish the other procedures. Because they are still running, I do not want to go into further detail.

Allianz boss Oliver Bäte said in the summer that 93 AGI strategies have already been discontinued, and that many should be added in the next 18 months. What is the current standing?
Here you have to distinguish between a general portfolio adjustment and Structured Alpha. Under the new management since the beginning of 2020, AGI aims to simplify structures. We removed 140 strategies from the previous 450. The cleanup is now becoming a continuous process.

What else could come?
We’ve accomplished a lot. Now we continuously monitor the success of the remaining strategies and reduce or merge where it makes sense.

The past year was marked by a savings program and job cuts at AGI. More to come?
We are now increasing the focus on growth. For example, we want to do more with alternative investments, i.e. with real estate, investments, financing and infrastructure.

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Both life insurance and asset management are looking for alternative investments at Allianz. Will the two previously separate pillars grow together operationally?
We are one of the largest life insurers in the world to date and probably the largest active asset manager in the world. Around 60 percent of the total operational Allianz profit comes from both areas. We want to expand this position. In German life insurance, a third of the 300 billion euros in customer money is already being invested in alternative investments. Through our two internal investment managers, customers are thus invested in alternative investments that are difficult for private investors to access. There is much more to this cycle.

What exactly?
With the 200 billion euros that we have already invested in alternative investments, we are already complementing each other. Pimco has intensified its investment in real estate with Allianz Real Estate, while AGI has been investing in private equity and infrastructure for years. We look at many topics together and globally, in the end it is an implementation in the respective society.

Which investments could we then see more often?
In the transformation of the economy, we will need much more infrastructure investments, be it in the conversion of the power grids, digitalization or low-CO2, climate-neutral production. We can accompany this transformation as a long-term investor.

Does that sound like a renaissance of the so-called public-private partnership?
We would be willing to talk. We have already made investments abroad. In Germany, too, there would be room to do more.

Nonetheless, Allianz’s wealth management remains an unequally divided area, with Pimco contributing 80 percent and AGI 20 percent.
The exchange will continue. But quite clearly: These are two independent providers who are sometimes in competition. As long as both are successful, each has its place.

What if things don’t go well?
At the moment I don’t know what could happen there.

With life insurance, you take care of another area that is changing significantly. What is your goal here?
We are pursuing a capital-light strategy and have already released billions of previously tied-up capital by hedging life insurance portfolios through reinsurance over the past year. Decisions about this must always take into account the regulatory differences in the markets and risk management. Another way is the further development of products in order to grow while preserving capital.

Is it conceivable in the long term that Allianz will only become a manufacturer and designer of life insurance, as Bäte put it? The capital would then be managed elsewhere.
We are already that today, just as reinsurance is traditionally part of our business model. Customers will continue to want Allianz as a point of contact for their policies in the future. In this respect, I wouldn’t say that at some point we will only be manufacturers & designers.

Allianz is by far the market leader in life insurance in Germany with a market share of 30 percent. Hasn’t growth reached its natural limit long ago?
We strive for balanced growth in the right segments with the right products. There’s still a lot we can do. One example of this is the USA: Here we are planning to expand our company pension scheme business.

Allianz life insurance was very early on in introducing modern products, and you were a pioneer in reducing the guarantee to 60, 80 and 90 percent. What’s next?
Certain forms of guarantee will continue to exist. What is interesting, however, is the process of change on the customer side. There, many are now more open to more opportunity orientation. The topic of zero interest has become tangible, which has led to an understanding of more opportunities with fewer guarantees.

Does that mean that Allianz will still go below the 60 percent threshold in guaranteed benefits in some areas?
We are already doing that today. Where it is not required by law, customers can also choose zero percent guarantees. We will bring further innovations where the customer can also adjust the level during the runtime. And in the USA, for example, there are extremely successful product concepts where customers can choose between different security mechanisms.

What do inflation and the upcoming turnaround in interest rates mean for life insurance?
At the moment we are seeing a small countermovement in interest rates. But of course we are curious to see when the central banks will finally react. It is important that no inflationary spiral develops. Central banks should make their contribution to this.

If, contrary to many forecasts, inflation is not a temporary phenomenon, what does that mean for Allianz?
In life insurance, we will benefit from the fact that we have already extensively restructured the portfolio. In asset management, we will increasingly offer products that offer customers protection against loss of value even in such market phases.

With the reinsurance solution in the US life business, you free up capital that you can invest elsewhere. Which investments have you specifically thought of here?
In the USA we see investment opportunities in new product concepts and new market segments. But we also see growth opportunities internationally.

Where in particular?
Retirement provision is a global issue. Asia, for example, is a large growth market.

Would takeovers also be conceivable?
Acquisitions are always an issue for us if the price is right. We recently bought in Greece. However, organic growth is my priority.

>> Read also: Allianz acquires Greek insurer European Reliance

However, in recent years Allianz has tended to make purchases in the area of ​​property insurance. Has your strategy changed so that purchases in life insurance are increasingly an option?
Last year we also made an acquisition with Aviva Poland that is of great importance for the life insurance business. However, we are also looking at possible targets in the area of ​​asset management.
With Allianz X you have an investment company whose investments are ready for the market. What role do they play in the group as a whole?
Allianz X investments are part of our digital transformation. In the area of ​​claims processing, we see very good developments that will help us in the group. The investment in Open Gamma in the area of ​​asset management is also an example where we hope to gain impetus for our digital strategy.

How do you assess the rapid developments in recent years in the fintech sector – for example with players like Trade Republic, who are proclaiming ETF savings plans as the new and better form of old-age provision?
We see how the new digital platforms are changing the way to the customer. In the corona crisis, we experienced massive upheavals in the advisory processes. Digital consulting tools now play an important role for us. But we also have to observe how digital players occupy the interface to the customer with their solutions.

Where do you see the greatest opportunities and risks for you?
I think the topic of which platforms we can use to support both digital and personal advice as well as the processes and administration behind them has been completely underestimated. This is a huge opportunity for us. Of course, we are also in competition with the new digital players.
Mr. Wimmer, thank you for the interview.

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