One of the top officials at Allianz said the German insurance powerhouse is capable of weathering low interest rates that could persist for a “very long time.”
Markus Faulhaber, chief executive of Allainz’s life insurance division, told the German media that ultra-low central bank rates have put pressure on the company to restructure its portfolio,
Reuters reported.
Faulhaber told German newspaper
Welt am Sonntag that about 80% of Allianz investments are still placed in highly diversified bonds with long-term maturities.
These investments include 40-year French state bonds, which generated about 4% interest even today.
“You can expect us to survive the low interest rate environment,”
Reuters quoted Faulhaber as saying. “We are attuned to this lasting for a very long time.”
“We started in 2007 to offer other types of life insurance apart from our classic form of life insurance,” Faulhaber also said.
He added that their new products are funded through a greater proportion of shares, real estate and private equity.
Allianz is looking to recover from a significant 17% profit slump in the second quarter of 2016. Earlier this month, the insurer reported that its operating profit decreased to €2.4 billion, largely due to the impact of natural catastrophe losses and other exceptional effects.
“The second quarter in particular was shaped by markedly higher damages from heavy floods and storms in Europe this spring,” said Allianz CEO Oliver Bate.
“The good earnings growth in life and health insurance business could not fully offset the decline in the property and casualty segment,” he added.
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