Munich-headquartered insurance group Allianz will ‘verticalise’ its operating models globally across business lines, expand the company’s leadership position in key markets, and build scalable platform models – all in the name of accelerating profitable growth over the next three years.
“For 2022-24, Allianz has set a target to achieve 5-7% compounded annual EPS (earnings per share) growth,” announced the insurer. “Three levers will drive this ambition: steady topline growth, improvement in profitability, and efficient management of capital.
“Over the next three years, Allianz expects to generate €12 billion of excess capital through its operational plans. Providing a solid base for these targets is healthy underlying growth in all business segments and encouraging progress in their transformation to meet future needs.”
In property & casualty, Allianz said the goal is an annual revenue rise of 3-4% plus a 92% target combined ratio. To reduce the unit’s expense ratio, the group is planning product and process optimisation and harmonisation.
“Further,” noted the firm, “Allianz aims to make 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.”
Under life & health, meanwhile, the focus will be on growing Allianz’s preferred lines of business. Additionally, greater synergies and more efficient deployment of capital are expected, with L&H and asset management converging towards asset gathering.
In line with this, it was announced that Allianz has entered a reinsurance agreement with Resolution Life and affiliates of Sixth Street for its US fixed index annuity portfolio. The deal is set to “unlock” US$4.1 billion in value and free up regulatory capital for Allianz.
“Allianz continues to overdeliver and outperform, which shows that our customer-centred simplification strategy is working,” stated group chief executive Oliver Bäte. “Now, we aim to deploy our global scale as a competitive advantage to grow both our customer base and our margins.”
It was also highlighted that the insurer is achieving a consistent look and feel for client interfaces, simple and transparent products and processes, and quicker customer service, thanks to the accelerated rollout of the Allianz Business Master Platform.
Meanwhile, a “new and improved” dividend policy has been unveiled as well.
“Beginning retrospectively with fiscal year 2021,” declared the company, “Allianz will follow a new and improved dividend policy that offers a dividend per share which is the higher of a 50% payout ratio or a 5% increase from the preceding year’s dividend. The payout ratio will be based on net income, adjusted for significant extraordinary and volatile items.”
Chief financial officer Giulio Terzariol said the new policy is a reflection of Allianz’s confidence in its financial strength and earnings power.