Allianz has seen a robust performance in its two growth regions Asia Pacific and Middle East and North Africa (MENA) in 2008. Both regions jointly reported 8.1 billion ruros in gross written premiums, an increase of one percent1. Property and casualty business (P&C) was strong, growing at double-digit pace in many markets. Total premiums amounted to 2.5 billion euros. Some life insurance markets suffered from the turmoil on financial markets. As a result, life insurance premiums from both regions fell slightly to 5.6 billion euros. Allianz has more than 21 million customers in Asia Pacific and MENA today.
Allianz shows robust performance in 2008
"The P&C business in Asia, the Middle East and North Africa remains a growth driver for Allianz", commented Werner Zedelius, Member of Board of Allianz SE responsible for Growth Markets. "In life insurance, some markets fared well, others were not immune to the economic downturn. Against this background, I am satisfied with our overall performance in Asia Pacific and MENA in 2008."
Werner Zedelius: "I am satisfied with our overall performance in Asia Pacific and MENA in 2008"
Asia Pacific – P&C remains growth driver, unique opportunities to strengthen distribution
Property and casualty business in Asia Pacific has shown a good performance in 20082.
Results are dominated by Allianz Australia, which recorded premiums of 1.5 billion euros, up 2.1 percent from last year. Combined ratio in Australia was at 97.1 percent.
Asia (excl. Australia) contributed 0.5 billion euros, strongly up by 18 percent compared to 2007. In Malaysia, premiums even increased by 28 percent and reached 220 million euros. This is testimony to the very successful integration of Commerce Assurance Berhad, which was acquired in 2007. China, Laos, Indonesia, and Hong Kong were all firmly growing above 10 percent. Growth in Thailand and Japan was only slightly lower. The combined ratio improved to 96.9 percent (from 98.6 percent), as a result of disciplined underwriting and, in particular, successful cost control.
Total premiums in life insurance in Asia were 3.8 billion euros. Allianz Indonesia grew by 8.5 percent and is the fourth biggest life insurer in the country. Malaysia posted a record premium of 141 million euros and raised its market share in new business to 7 percent. Allianz Life Japan started selling life insurance policies in April 2008 and generated revenues ahead of expectations.
Other companies were affected by the financial crisis and the resulting decline of demand for unit-linked products. Premiums of Allianz China Life fell by 20 percent, but the company did better than the market and climbed to number four among international joint ventures. While premiums fell by roughly 40 percent, Allianz Taiwan Life maintained its number one position in unit-linked business and improved its solvency, against market trend. South Korea reported 1.6 billion euros premiums (down 10 percent), and remains the fifth largest life market for Allianz.
On the investment side, Allianz started reducing its equity exposure in late 2007. At the end of 2008, equities accounted for one percent of Allianz's investment assets in Asia. In 2009, Allianz will remain cautious on equities, but will selectively invest if market conditions appear to be favourable.
"I am glad about the very robust P&C business. In life, we have to be content considering the very difficult market conditions in the second half of the year", Bruce Bowers, CEO of Allianz Asia Pacific commented. "We have weathered the storm so far and invested our clients' money prudently. We see unique opportunities to grow our business, and we will seize them. I remain confident for 2009."
Allianz has two strategic priorities in Asia Pacific in 2009. First, as part of its two global initiatives 'Customer Focus' and 'Target Operating Model', Allianz will push forward to make processes, products and services even more customer focused. The objective is to become loyalty leader in all chosen markets. Second, Allianz will further strengthen its sales channels with a special focus on recruiting, training, and developing tied agents. "We see a 'flight to quality' among agents", Bowers explains. "Take Taiwan, for example. Allianz is a very coveted partner for agents nowadays. This is a unique chance for us to strengthen agency and to grow our business. We are committed to taking this opportunity, in Taiwan and elsewhere in Asia."
Bruce Bowers: "Unique opportunities to strengthen our distribution"
Middle East and North Africa (MENA) – India growing by 41 percent
In 2008 the MENA region has proven to be one of Allianz's growth powerhouses3. Revenues from the region grew to 2.4 billion euros, an increase of 40 percent from last year.
Business in the region is dominated by India. Despite the difficult financial situation, strong growth continues. Bajaj Allianz Life reported premiums of 1.8 billion euros, an increase of 43 percent. Premium volume of Bajaj Allianz General grew by 31 percent to 460 million euros. Both companies quickly expanded the number of agents in previous years to reach roughly 210,000 by end of 2008. The focus is currently on the profitability of the agency channel.
Revenues in other markets were growing quickly, albeit from a relatively small level. For example, life business in Egypt grew by 34 percent to reach 60 million euros. Lebanon reported growth of 25 percent to 30 million euros. A new Takaful unit in Bahrain (Allianz Takaful Bahrain) was set up and started selling Takaful products in March 2008.
Kamesh Goyal, Regional CEO of Allianz Middle East and North Africa, commented: "Since September, market conditions have been quite difficult. We focused on the profitability of our businesses and on increasing the ratio of premiums per employee and premiums per agent, respectively." In India, Bajaj Allianz Life and Bajaj Allianz General achieved operating profit in 2008.
Contributions of other MENA entities are still rather small. "However, these countries have shown high growth, and there is a great potential in future", Goyal said. Looking forward, he concluded: "2009 will be characterised by a global recession that also will reach our customers. We will continue to help our customers to weather the current financial turmoil and strive to establish long lasting relationships with them."
Kamesh Goyal: "We help our customers to weather the financial turmoil"
Medium-term target confirmed
Werner Zedelius commented: "Our agenda for 2009 is clear. We will continue to invest in sales and distribution in Asia, Middle East and North Africa. We will safeguard the solvency of our companies and benefit from the exceptional financial strength of Allianz. And we will work on our operating models to achieve even better customer focus and higher performance." He added: "Our medium-term target remains unchanged: We want to reach 10 billion euros in premiums in Asia Pacific and MENA and to attain a top-5 position in each market at least."
1 Figures comprise all Allianz insurance companies in Asia Pacific and MENA, including those not consolidated under IFRS (India, Thailand). Growth figures are internal growth, i.e. adjusted for F/X effects and consolidation effects.
2 Asia Pacific consists of Allianz entities in Australia, China, Hong Kong, Indonesia, Japan, Laos, Malaysia, Singapore (incl. Brunei), South Korea, Taiwan, and Thailand.
3 Middle East and North Africa was established as the third growth region of Allianz in 2007, besides Asia Pacific and New Europe. It consists of entities in Bahrain, Egypt, India, Jordan, Lebanon, Pakistan, Saudi Arabia, and Sri Lanka.
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