The Core Business of Allianz Insurance

The Core Business of Allianz indemnificationAllianz is ranked among the top 100 just about blue-chip brands world full(a) and is a leading amends and financial services company. Allianzs core business is Life and Health amends and property casualty. Allianz is too one of the quadruplet active addition managers in the world. The total asset management operations as of 2009 were 1,202 billion. The company s business activities in this segment consist of asset management products and services both for third-party investors and for the Allianz roots insurance operations (Allianz Annual Report, 2009, p.48). Allianz banking operations now comprise of operations in Germany, Italy, France and New Europe. The bank offers a broad(a) range of products for corporate and retail clients. Due to their limited size, banking operations are writinged as part of the corporate and other segment.According to a wedge release on 24 February, 2011 Allianz announced preliminary results for the fiscal year 2010 of total r horizontalues r individu tout ensembleying a bare-ass high gear of 106.5 billion euros. Based on this release, Life and Health insurance generates the most revenue reaching a record level of 57.1 billion euros. Growth amounted to 12.5 percent compared to 50.8 billion euros in 2009, and was set by fast(a) demand for both investment-oriented and traditional life insurance products. Life and Health insurance also generates the most profit with direct pelf growing 7.4 percent to 2.9 billion euros, compared to 2.7 billion euros in 2009. This was largely driven by a better expense result, as well(p) as an attach in operating investment income which benefited from significantly lower impairments compared to 2009 (Press release preliminary results 2010, p.1).Life and Health insurance and property casualty will drive offshoot in the next decade as they have always counted for the main revenue of the Group. Allianz has been performing well and sustainable . Since 2007 it reached 97,689 million revenue and in 2008 the global parsimony was in crisis only if the revenue was just went down slightly with 92,568 million. In 2009, the economic crisis reached its peak in the first half of 2009 however its revenue unflustered increased up to 5.2% with 97,385 million. A newly announced figure for its 2010 revenue has been impressive, with total revenue reaching 106.5 billion. These figures have proven that the company has been doing well for the destruction four years and there is no doubt that the company will be successful in coming years (2009 Allianz Annual Report, p.48).Corporate debt instrumentAllianz responded to the increasing demands of society for greater Corporate Responsibility by adopting a new CSR scheme in 2009. This strategy assures that environmental and social issues are managed, rescue note value for the company and that there is a continued benefit for society. The strategy focuses on three themes managing the c ompanys environmental impact, considering the endangerments and opportunities associated with climate change and supporting the communities in which Allianz is operating (Corporate Social Responsibility 2009, p.3).As an inter field financial services provider, Allianz sees sustainable development as fundamental to its business. Allianz is focusing on finding progressive solutions that address local and global challenges. Allianz also established a strong structure for handling CSR activities. Delivery of the CSR strategy is the responsibility of the Human Resources Director, who is a member of the Allianz Insurance Management Board. CSR issues are included at the monthly Management Board meetings, as well as featuring at the companys annual Director and Management Conferences. The CSR bus is responsible for setting the overall strategy, implementing initiatives and reporting performance to the HR Director and the Management Board.In addition, a CSR Steering Committee comprising of 11 senior managers from each of the major divisions has been established to ensure the CSR strategy is embedded in the business. The committee meets 2-3 times a year to review progress against the strategy and to identify rising risks and opportunities. The Committee is chaired by the HR Director (Corporate Social Responsibility 2009, p.4).Climate ChangeAllianz sees itself and the insurance labor at the forefront of the fight against climate change. The industry must play a central role in both climate change mitigation and adaptation. Based on this initiative, Allianz has done a wide range of activities in response to Climate Change. Allianz Insurance is a founding member of ClimateWise which was founded by leading insurers in 2006 to respond to the myriad risks and opportunities of climate change, aiming to funk the overall risks faced by economies and societies (Climatewise.org.uk). As a member of ClimateWise, Allianz must report annually on its performance against the pri nciples and sub-principles.Allianz also supports national and global carbon dioxide emission step-down targets and government action, including regulation that will enhance the resilience and reduce the environmental impact of infrastructure and communities. In 2002 Allianz joined the Carbon revelation Project (CDP), an independent organization now representing 534 institutional investors worldwide with more than than US $64 trillion in funds. CDP collects, evaluates, and publishes data on the CO2 emissions from more than 3,000 companies around the world. RCM, a globally active investment company belonging to the Allianz Group, uses the CDP database to compile risk profile lesson companies climate performance (Corporate Social Responsibility 2009, p.9) neverthelessmore, Allianz remained affiliated to its carbon reduction plans even when the Copenhagen Summit ended having set no binding global emissions targets and no indication of when emissions should peak. Carbon management h as a strong business case it is primarily about reducing energy consumption and costs.StakeholdersIn order to understand stakeholders expectations, Allianz is working closely with a range of national and international organizations and doing surveys to discover which topics are most relevant to their stakeholder groups. Every two years Allianz asks its main societal stakeholders which key issues Allianz should deal with and how they should address them. For example, in the 2009 Stakeholder Survey, 131 realised questionnaires were received from stakeholders from the following sectors or groups Politics, Media, Non-governmental organizations, Science, Companies and Allianz management (Allianzsustainable Development Report 2010, p.12).Regarding guests, Allianz is committed to making it easier for its customers to deal confidently with financial topics by maintaining a division on its Group web portal that explains how the financial and economic crisis develop and what its possible consequences for consumers are.Regarding Suppliers, Allianz carries out supplier surveys to learn more about their suppliers businesses and their efforts in the demesne of sustainable development.Regarding Community, Allianz takes to mean solar days challenges as opportunities for action done its local activities, global projects, and the work of Corporate Foundations. A good example is the Foundation for Sustainability and the Allianz Cultural Foundation.Regarding Government Relations, Allianz maintains various(a) partnerships with renowned and trustworthy organizations such as World Wide Fund For Nature (WWF) or the United Nations Environment Programme Finance Initiative (UNEPFI) (Allianzsustainable Development Report 2010, p.12).Crisis ManagementAllianz and other financial institutions had to face the global financial and economic crisis which started in mid 2007 with the collapse of the housing foodstuff in the United States. The crisis that was initially observed within th e banking sector accelerated in 2008 and spilled-over to various other sectors of the financial industry. Serious disruptions in the global financial strategy led to deteriorating economic conditions and investors became much more risk averse. In September 2008, the global financial system almost collapsed large financial institutions faltered, leading to changes in business models, failures, mergers and nationalizations. Some economies were even on the verge of national bankruptcy. In consequence, the weak situation in the financial markets that was observable from falling stock markets and fickle credit spreads became even more intense in the fourth quarter of year 2008.The global economic downturn caused a series of collapses or next collapses of giant financial institutions such as Bear Stearns, Lehman Brothers, Merrill Lynch, Washington Mutual, Wachovia, AIGand Citigroup. However, Allianz has managed successfully in its business operations, particularly its risk management a s demonstrated by its impressed revenue 97,989 billion euros in 2007, 92,567 billion euros in 2008, 97,385 billion euros in 2009 and 106.5 billion euros in 2010.Allianzemerged from the market turbulence as one of the strongest insurance groups in the industry by solvency and ratings, as evidenced by external rating agencies. The financial strength of Allianz SE was rated by Standard Poors as AA (stable outlook), by A. M. Best as A+ (stable outlook), and by Moodys as Aa3 (stable outlook). As of December 31, 2009, Allianz SE had the best Standard Poors rating among the internationally active primary insurance groups in Europe. Even during the 2008 and 2009 financial crisis, these ratings were confirmed and remained stable (Annual report 2008, p. 41 Annual report 2009, p. 187).Allianz has executed and managed its risk management consistently and focused on three main objectives to secure itself from market turbulenceProtect theAllianzGroups cap and solvency position as well as posit ion its investment portfolio for continued market turbulenceProtect the value of their Property-Casualty businessFocus on sustainable profitability in the Life/Health businessAllianz considers risk management to be one of its core competencies. It is an integrated part of its business processes. Based on the risk management framework, these key elements have been focused on Promotion of a strong risk management culture supported by a robust risk governance structure. Consistent application of an integrated risk capital framework across the Group to protect its capital base and to support effective capital management. Integrate the risk considerations and capital needs into management and decision-making processes through the attribution of risk and allocation of capital to the various segments. This comprehensive framework ensures that risks are properly identified, analyzed and evaluated. Allianz Groups risk appetite is defined by a clear risk strategy and limit structure. Close ri sk monitoring and reporting allows Allianz to detect deviations from risk tolerance at an early stage (Annual report 2009, p. 179).StrategyAllianz has been doing successfully for many years, even through years of financial market turmoil and global economic contraction by executing its strategy consistently. According to Allianzs announcement in the 2009Annual Report, the Group focuses its strategy in five management prioritiesBecome the partner of choice for all stakeholders Allianz believes that the Group can whole continue to thrive if Allianz manages to balance the interests of all of their key stakeholders customers, employees, investors and the public.Drive profitable growth In property-casualty Allianz will only grow where target margins can be achieved. In life/health insurance Allianz can build on a strong capital position, growing asset base and attractive new business margins. The strategy has served the Group well in asset management where Allianz is diversifying revenu es and risks into different asset classes with an overweight in fixed income investments and regions.Strengthen competitiveness Allianz has been continuing to adapt its business models, products and customer interactions accordingly. Hence Allianz has been focusing on efforts to drive efficiencies, reduce complexity and leverage new web-based technology along the entire value chain in order to achieve productivity benchmarks.Increase market and customer focus The Group has created the foundations for Allianz to become a customer-centric organization through its customer focus and innovation programs. Going forward they are further strengthening their customer segmentation and the delivery of segment-specific offerings.Maintain capital management discipline Allianz has fortify risk management function and de-risked its investment portfolio to appropriately adjust to the rising uncertainty in the real economy (Annual Report 2009, p.63).Allianzs core strength is risk management which has helped the Group protect its net asset value and carefully balance cash generation and investment opportunities. In the 2009Annual Report they state that we are managing the transition to the new Solvency II framework. And we are leveraging this process to place state-of-the-art risk management technology into the hands of our business leaders for even better day-to-day decision making. Based on this, Allianz has performed successfully as the Group usually gets AA rating and the Group has successfully steered through one of the most severe financial crises ever. Allianzs solvency is strong and its capital base grew almost 20 % to more than 40 billion (Annual Report 2009, p. 179).Allianz is definitely an innovative company as it has a wide range of changes, improvements and strengthening in management, products and customers services. Regarding customer services, the Group always put innovation as its priority. The 2009 Annual Report remarks At all important points of contact, we are measuring the propensity of our customers and distribution partners to recommend our products and services to others. And we have been tying our frontline managers incentives to systematically improving the service experiences of our clients. Furthermore, we are creating a line of merchandise architecture which allows customers and distribution partners to experience more targeted value propositions, service offerings and price positions which are easy to understand and consistently delivered. (p.66). Werner Zedelius, Member of the Board of Management of Allianz SE, also confirmed that at Allianz, innovation is a part of an even bigger goal Allianz wants to become a trusted innovator engagement (Allianz Group Portal, press, n.d). heraldic bearing and GoalsMission At Allianz, we strive for exceptional financial performance and growth based on our commitment to the pursuit of a sustainable world through combining long-term economic value, environmental stewardship and social r esponsibility.GoalsPerformance Maintain sustainable development leadership in the financial services sectorSustainable Development Reporting Active stakeholder engagement in our materiality assessmentClimate Change Global awareness on CO2emission reduction concept for 80% of employeesEnvironmental ManagementSystem Accomplish an 80% employee coverageSustainable Investment Invest an additional 150 million in renewable energy projectsMicro insurance Creation of a global Allianz micro insurance strategy to be implemented by a trade union movement forceEngagement with Society Launch global employee engagement programEmployees Develop KPIs for employee engagement, trust, feedback, motivation, development and diversity from the strategic HR scorecard.Customer Responsibility Further strive for our 2010 goal of Loyalty Leadership. Net Promoter Score above market average.How does Allianz motivate employees Allianz believes that employees are motivated if their work is well recognized and well paid. Therefore the Group created a pay structure that includes a mix of basic pay, performance-related pay and additional benefits to motivate it employees, Incentivizing staff is an important way of support entrepreneurship. We have now adopted evaluation procedures that help assess more clearly how an individual or team has performed, and reward that performance accordingly (Allianz Group Portal, Employee, n.d). Allianz also motivates its employees with the Employee Stock Purchase Plan as approximately 939,000 shares were bought through the scheme. This has not only proved a sound financial strategy but it has also allowed the Group to strengthen employee engagement (Allianz Group Portal, Employee, n.d). In addition, The Group creates a good working environment where employees can maximize their ideas through innovative programs, healthcare program, talent development etc.Desirability as an employerAllianz is a good company to work for. Firstly, good performance will receive hi gh payment and the incentives and bonuses of the company are attractive. Secondly, Allianz has a good working environment as a result of their policy to put employees first. Many Allianz companies offer wellness and sickness prevention training and health testing on a voluntary basis as well as health programs for members of staff and customers. Allianz has a diversified working environment and promotes a diversity theme called Power of All Worlds. This aims to promote diversity and inclusion to reach their business goals, and continues to support Gender, Disability, extension Mix and international cultures. Thirdly, Allianz is an innovative working place which allows employees to develop and maximise all new ideas. This culture of innovation was turned into reality by the Ideas to triumph (i2s) framework launched in April 2006, and has been rolled out to 58 Allianz companies worldwide. It has actively encouraged over 172,000 employees to develop ideas which could improve the way in which Allianz operates on a day to day basis. And so far more than 60,000 ideas have been generated (Allianz Group Portal, Employee, n.d).