The unit expects to grow premiums to between 3.9 billion euros ($5.4 billion) and 4 billion euros this year, Clemens von Weichs, who took over as head of the Munich-based insurer’s Allianz Re unit on April 1, said at a press conference in Frankfurt today.
Allianz Re, based in Munich, is handling about 70 percent of the company’s reinsurance, including a share of natural- catastrophe related risk. It reinsures part of Allianz’s risk itself and places the rest with other reinsurers such as Munich Re or Swiss Reinsurance Co. Allianz Re had gross written premiums of 3.78 billion euros in 2008, making it Germany’s third-biggest reinsurer behind Munich Re and Hannover Re.
“It would be difficult to match last year’s profitability in 2009,” Von Weichs said. Operating profit at the unit rose 86 percent to 495 million euros last year, bolstered by reserve releases. The unit’s combined ratio, or spending on reinsurance claims and costs as a percentage of premium income, improved to 87.8 percent last year from 95.2 percent in 2007.
About 18 percent of Allianz Re’s business is reinsurance for third parties, Von Weichs said. While the company aims to grow its overall reinsurance business, it “won’t swamp the market with capacity and doesn’t plan to create a new reinsurance giant,” he said.
Regarding catastrophe bonds, which are issued by insurers to protect against losses on natural disasters, “Allianz is well protected for this year,” Von Weichs said. The insurer sold $180 million of so-called cat bonds to protect itself from losses on U.S. hurricanes and earthquakes in April.