Morningstar | Turkey Turnaround for Allianz and Traditional Life Investment Margin Headwinds Persist
While we think Allianz is one of the best-run multiline insurance companies, life and health insurance is its main problematic business. Allianz has three main business units, nonlife insurance, life insurance, and asset management. The nonlife business contributes around 45% to operating profit, while life and health insurance and asset management each add around 35% and 20%, respectively. In the nonlife business, Allianz sells motor, accident, property, general liability, travel insurance, and assistance services. From a reporting standpoint, nonlife is broken down into geographies: German-speaking countries and Central and Eastern Europe; Western and Southern Europe, including Asia-Pacific; Iberia and Latin America and Allianz Partners; global insurance lines and Anglo markets. Germany, Italy, and France dominate, but Allianz Partners, Allianz global corporate solutions, and reinsurance are also important.Allianz Partners is a business-to-business-to-consumer segment selling travel insurance through airlines, tuition insurance through colleges or universities, event protection sold with sports or concert tickets, and assistance services that cover travel, medical, transportation, medical evacuation, prescription replacement and emergency legal referral. Allianz global corporate solutions provides insurance for companies that operate globally and writes program insurance across lines like property, motor, travel, and liability.Geographically, life and health is driven by Germany, Italy, and France, but the United States is also important. By product line, the life and health division is broken into guaranteed savings and annuities; capital-efficient products; protection and health; and unit-linked without guarantees. The guaranteed savings and annuities business dominates, contributing EUR 2.05 billion of the EUR 4.15 billion operating profit for full-year 2018. And the dependence of life and health on guaranteed savings and annuities shows how reliant Germany is on guarantees within long-term savings. Allianz’s German weighted average guarantees are still some of the highest for the business.
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