Extreme scenario: Allianz does not expect record profits – 2020 “will not make you laugh” | message

“Assume that we will not achieve a record profit this year,” CEO Oliver Bäte told the news magazine “Der Spiegel”. “This year is not going to make you laugh.” Europe’s largest insurer has previously forecast an operating profit of 11.5 to 12.5 billion euros. Last year, Allianz had earned more than ever at € 11.9 billion. “I’m not worried about our business model,” said Bäte. “While we no longer have the nice value cushions we once had from stock transactions, we also have no losses.” The capital investments of most insurers, which contribute a large proportion to the profit, consist only to a small extent of shares.

In order to cushion the consequences of a pandemic and other catastrophes in the future, the Allianz boss proposes a European emergency fund into which insurers and the states pay. “In an extreme scenario like a pandemic, private capital will never be enough, so we always need a partnership between the public and the private sector,” said Bäte. “I would like to set up a fund at European level that the insurance industry pays into and that can be tapped in crisis situations – not just for pandemics, but also for serious natural disasters.” Such a cushion could also help deal with the consequences of climate change. So far, however, only a few companies have insured themselves against the consequences of a pandemic.

Bäte compares the coronavirus standstill with a “system failure” that would overwhelm the insurers alone. “The de facto shutdown of the economy is not a coincidence, that is what politics has decided. No company can insure such a thing because the risk cannot be calculated.” The insurance industry could not bear the resulting losses. “If, instead of seven to eight percent of the cars, 90 percent a year had an accident, the insurance premiums in car insurance would be priceless. We insure coincidences to a limited extent.”

Munich (Reuters)

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