Europe’s largest insurer Allianz warns of a dangerous speculative bubble in the financial markets. “We are very concerned about the issue of financial market stability,” said CEO Oliver Bäte on Friday at the balance sheet press conference in Munich. The situation, especially on the stock markets, is similar to the situation before the 2008/09 crash and the crash of 2000.
“Some celebrity buys some Bitcoin and then the prices for these assets explode,” said Bäte. “That’s pretty crazy, we really have to be careful.”
According to its CEO, the insurer has reduced the proportion of shares in its investments in order to ensure that possible volatility does not in any way severely affect Allianz. “I cannot predict a crash, otherwise I would probably have another job (…) otherwise I would probably have something different to do,” said Bäte.
Such clear criticism is rare
There have been repeated warnings of a speculative bubble in recent months. But it is rare that the bosses of a DAX group express themselves so clearly.
Allianz itself benefited from the development over the past year. At the end of 2020, Allianz managed a total of almost 2.4 trillion euros, more than ever before. Of this, 1.7 trillion were customer deposits. According to CFO Giulio Terzariol, the net inflow of new customer funds in 2020 totaled almost 33 billion euros. With its own capital investments amounting to a good 700 billion euros, Allianz had invested 58 billion euros in shares at the end of last year, 10 percent less than a year earlier.
According to Bätes, the corona crisis will continue to affect economic development this year. “The subject is not over at all.” At Allianz, there will continue to be great pressure on sales and margins in many countries.
Although Bäte was cautious or warned about the development of the real economy and financial markets, Allianz itself has come through the corona crisis better than expected by stock market experts. For the current year, the group is even aiming for a record operating result of 12 billion euros – albeit more cautious than usual with a reservation of plus / minus one billion euros.
Break-ins less dramatic than feared
The net profit fell in 2020 by 14 percent to 6.8 billion euros, but some analysts had feared greater losses. The company put the “negative Covid-19 effects” in the operating result at 1.3 billion euros. There were also positive effects – including fewer car accidents – but they did not offset the additional costs caused by corona. The Group’s sales fell slightly by 1.3 percent to 140 billion euros.
This year there could be further corona damage, but probably to a much lesser extent than in 2020. For example, in the “entertainment” area, which includes the insurance of events, according to the Allianz management, charges of 50 to 100 million euros are possible, including the Cost of a possible cancellation of the Tokyo Summer Olympics. Allianz has been the IOC’s global insurance partner since the beginning of this year.
Apart from the corona crisis, the long-term low interest rates are a major burden for the insurance industry because the income from capital investments is under pressure. Bäte therefore emphasized that productivity must increase. “Our products have to become cheaper and more efficient. Our industry is not particularly efficient.” But the meanwhile 150,000 employees around the world should not be restless because of this. “What we want to avoid are restructurings and redundancies for operational reasons,” said Bäte. The goal is “that we do not shrink over time, but that the entire workforce of Allianz grows with the company.” As a Corona compensation, there is an additional vacation day for the workforce this year. (apa / dpa)