Allianz plans to strengthen ‘leadership position’ in P&C markets over next three years

Insurer Allianz has today (3 December 2021) set out its strategic outlook and targets for the next three years – this includes cementing its “leadership position” in key property and casualty (P&C) markets, as well as striving for 3% to 4% annual revenue growth in this market segment.

The insurer, which has laid out its 2022 to 2024 strategy as part of its Capital Markets Day 2021 today, will also be looking to achieve a 92% combined ratio for its P&C business during the next three years.

It further hopes that “product and process optimisation and harmonisation” will contribute to reducing its P&C expense ratio to around 26% by 2024.

Additional ambitions for Allianz’s P&C business include making “its mid-corporate segment more efficient by rebalancing the portfolio using integrated tools, strengthening operations in Europe and growing regional hubs, as well as by harmonising and simplifying processes through a global IT platform”.

Allianz chief executive Oliver Bäte said: “Allianz continues to overdeliver and outperform, which shows that our customer-centred simplification strategy is working.

“Now, we aim to deploy our global scale as a competitive advantage to grow both our customer base and our margins.”

Five pillar plan

Allianz has identified five strategic pillars that will underpin its outlook and targets between 2022 and 2024. These are:

• Transforming life and health and asset management franchises.
• Strengthening leadership position in key P&C markets.
• Boosting growth through scalable platforms.
• Deepening global vertical integration of operating models.
• Reinforcing capital productivity and resilience.

By focusing on these target areas, Allianz aims to achieve 5% to 7% annual growth in earnings per share (EPS) and a minimum 13% return on equity (ROE) by 2024. This will be supported by “steady topline growth, improvement in profitability and efficient management of capital”, Allianz added.

Over the next three years, Allianz also expects to generate €12bn of excess capital through its operational plans.

The insurer noted: “Being a multiline business, Allianz is well positioned to deliver synergies through scale in processes, products and infrastructure.”

Commenting on Allianz’s announcement, financial services firm Jefferies said: “Allianz’s capital markets day includes four materially positive announcements: higher growth targets, an improved dividend policy, a US back book deal and lower target Solvency II ratio.

“Having expected Allianz to largely reiterate the previous plan targets, today’s announcement has positively surprised in a number of material ways - namely growth, dividends, capital and back book risk.”