Allianz sees synergies between corporate and ART, deepens ties

by Artemis on June 29, 2016

Global insurance and reinsurance giant Allianz has restructured the board of its Allianz Global Corporate & Specialty unit, citing the “increasing opportunities for collaboration” between its corporate risk transfer business and its alternative focused Allianz Risk Transfer (ART) unit.

The Allianz Risk Transfer (ART) is the home of Allianz’s business of fronting risks to alternative and insurance-linked securities (ILS) capital providers, with the ILS market’s largest fund manager Nephila Capital being its key partner in that area.

The fronting of risks to alternative reinsurance capital providers, such as Nephila, has been a growing piece of the Allianz ART business in recent years, alongside its creation and underwriting of customised risk transfer solutions, such as weather risk transactions (which also often involve Nephila), and multi-line re/insurance deals.

In an announcement on the changes to the Allianz Global Corporate & Specialty (AGCS) board, the company explained that Hartmut Mai, the Chief Underwriting Officer Corporate for AGCS, would now also be taking on board responsibility for Allianz Risk Transfer (ART).

The reason for this move is to reflect the “increasingly close interactions between the traditional Corporate lines of business of AGCS and ART’s Corporate Solutions division,” the company explained.

The importance of the fronting business at Allianz ART has increased in recent years, with the company explaining in a recent results statement that fronting is a “major driver” of top-line growth at the unit.

Richard Boyd, Allianz Risk Transfer Chief Underwriting Officer, explained to Artemis; “ART’s relationship with the Insurance Linked Market is an important element of its business mix and ART continues to support the evolution of this market on various fronts.”

Boyd also noted that Allianz ART provides structured fronting services for some of its largest corporate clients, which is an area that is driving the bulk of the top-line growth.

So the closer integration of Allianz’s AGCS and ART units seems an approach set to help this fronting for ILS and corporates business grow and could result in greater synergies for the re/insurer, as well as helping more ILS backed capacity gain access to corporate risks in the future.

Chris Fischer Hirs, CEO of Allianz’s AGCS SE unit, commented; “Our corporate clients increasingly look to us to help them develop custom-built solutions to both established and new risks. By leveraging our combined expertise, we can further expand our services in this fast growing and highly specialized area,” highlighting the increasing synergies between Allianz ART and AGCS’ traditional corporate focused business.

In the evolving insurance and reinsurance landscape, finding synergies between the alternative and traditional activities at large, global re/insurance companies is going to be key, as they position themselves to navigate the changing market.

Allianz has established a market-leading franchise specialising in alternative solutions, fronting for ILS or alternative capacity and tailored risk transfer products such as in weather risk. By acknowledging the synergies between its corporate insurance division and the ART business and deepening the ties, Allianz is positioning itself for the future.

Also read:

Nephila & Allianz work on blockchain catastrophe risk trading.

Nephila & Allianz Risk Transfer partner for wind farm swap.

Blue Halo Re 2016 cat bond launched for Allianz Risk Transfer.

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