Profitable core business
Perlet sees the crisis as an opportunity
Allianz board member Helmut Perlet answers questions about Allianz's current situation.
Helmut Perlet
Dr. Perlet, has the credit crunch also put Allianz in a precarious situation?
Helmut Perlet: Quite the contrary. The current situation actually affords new opportunities for strong companies like Allianz. Allianz itself and many of our subsidiaries have decades of experience in dealing with such crises.
Our strong capital base is just one of the most obvious signs of our strength. Our consistent conservative investment policy and our focus on profitable growth will also ensure that Allianz emerges even stronger from this difficult time.
You can also see from our solvency ratio, which at 157 percent compares very favorably to that of our competitors, that we have a sound capital position.
What are the consequences of this development for our customers?
Perlet: We're seeing a reaffirmation of two values for which the Allianz brand has traditionally stood: security and competent advice. In addition, our customers benefit from our stability. Independent of the personal risks a customer enters into when making investments, it is particularly clear in these times how important it is to have competent, strong partners when it comes to financial planning. The fact that customers are recognizing this again is also good for Allianz.
Do you think it realistic that Allianz will attain its targets in the 2008 financial year?
Perlet: The strong fluctuations on the financial markets and the clouding of the global economic situation affect the entire financial services sector. And even Allianz is not immune to this environment. We will not achieve our operating profit target of nine billion euros this year. However, it's important to understand that we are operating profitably in our core business and that we have a strong capital base. This shows that we've done our homework in the past years, and also that we are well poised to benefit from economic upturn.
The sale of Dresdner Bank has dampened Allianz's profit in the third quarter. Why's that?
Perlet: With the sale of Dresdner Bank we divided our business into continued and discontinued business.
The continued business – that is, life, health and P&C insurance, asset management, and the banking business that remains in Allianz's hands – is reported first. Here we continue to be profitable, especially in P&C insurance. However, we too are unable to escape the general market situation. Despite this, we still achieved an operating profit of 1.6 billion euros in the third quarter.
We will now treat Dresdner Bank as discontinued business. In the third quarter the actual loss incurred by Dresdner Bank will be posted as discontinued business; for the last time this will burden the result, by 1.2 billion euros. In addition, Dresdner Bank must be revalued as per September 30. This revaluation will result in impairments of 1.4 billion euros, so that the total negative impact of Dresdner Bank on the result will amount to 2.6 billion euros.
In view of the turmoil on the stock markets and their effects on the purchase price of Dresdner Bank, the question arises as to whether the sale was the right step in these circumstances. What's your opinion?
Perlet: The merger of Dresdner Bank and Commerzbank is and remains the right step. From an economic point of view it was a sensible move for everyone involved. It will benefit customers, employees, and shareholders alike. The turmoil on the stock markets has affected all financial institutions. However, it mustn't distort the view of the true potential of the new Commerzbank.
As with all content published on this site, these statements are subject to our Forward Looking Statement disclaimer, provided on the right.
For further information
