Actually, the Allianz leadership can be very satisfied. With the current figures, she is helped by the sharply rising prices and higher returns from investments, after all interest rates are going up.
Germany’s largest insurer achieved an operating profit of 10.2 billion euros in the first nine months, three percent more than in the same period last year. Sales even rose by 5.3 percent to 116 billion euros, CFO Giulio Terzariol told journalists on Thursday.
Still, not everything is good. At EUR 4.7 billion, the net profit attributable to shareholders was significantly lower than the EUR 6.9 billion in the first nine months of 2021.
The main reason is the high expenses for damages and fines following the Structured Alpha fraud scandal in the USA. The Allianz subsidiary Allianz Global Investors (AGI) had made false promises to major investors about hedging and falsified data. When prices fell sharply at the beginning of the 2020 pandemic, investors lost a lot of money.
Allianz had to pay around six billion euros in fines and damages in the past few months, and AGI was also not allowed to sell any funds in the USA for ten years.
Investors apparently still resent Allianz: With a decline of eight percent since January, the insurer’s share price has developed significantly worse than its rivals. Main competitor Axa is slightly up, Munich Re has even increased nine percent and Zurich twelve percent.
The Allianz management under CEO Oliver Bäte wants to win over investors with a share buyback program of one billion euros, with which the course is to be supported.
In addition, Bäte reacted noticeably irritated by the defeat in the USA and the low share price. He apparently wants to prove to everyone that he is a great business leader – and he verbally lashes out.
He doesn’t seem to care who he meets. At an IT event, for no reason, he took on Economics Minister Robert Habeck and Defense Minister Christine Lambrecht: “In this country, you can become Economics Minister even though you’ve never worked out a rule of three, or Defense Minister without ever holding a gun to have.” Bäte’s secret is why the head of Germany’s largest insurer makes such statements about ministers who were democratically elected and who Allianz may one day need.
He had previously been upset that the citizens of this country were always dissatisfied. In France it is even worse. “People are even more dissatisfied there, even though they work the least in the EU.” Did that go down well with Allianz France customers?
The recently reported business week about an internal Allianz conference in May 2022, in which Bäte dealt with Allianz IT problems in front of 8,000 employees. At the same time, he vehemently attacked the US authorities, accusing them of treating Allianz unfairly because it was a foreign company.
The Allianz subsidiary from Brazil put the website online, but it has now been deleted. Bäte’s favorite word in Allianz IT’s presentation is “Crap”, which means “Mist” in German. And he says: “I think we really had the wrong IT strategy over the past eight to ten years.”
If that’s correct, the question arises as to why the CEO hasn’t done anything about it so far. He has been in office since 2015. But one cannot expect self-criticism from Bäte. In his own words, he bears no responsibility for the US scandal either.