Allianz aims to grow alongside expanding Asian companies

Ask the chief executive of Asia at Allianz Global Corporate & Specialty (AGCS) Alexander Ankel for his thoughts on the region and you’ll hear words like ‘increase’, ‘investment’ and ‘innovation’. And, of course, ‘insurance’.

But the former boss of Allianz Turkey is not just reading from the corporate songsheet. He has lived and breathed Asia before, most recently as the head of Allianz Malaysia from 2004 to 2010 and, before that, of Allianz Fire and Marine Insurance Japan. He also knows the Allianz group inside out, having been with the insurer since 1997.

So when Ankel says that the biggest opportunities in the region are geographical rather than sector specific, you know this means Allianz is targeting the region in a big way. “As the Asian economy continues to grow, so do the opportunities to support Asian companies as they expand beyond their domestic markets,” Ankel says. “We will focus on further expanding our existing operations in Singapore, Hong Kong and Japan, as well as greater China and India.”

Furthermore, AGCS plans to increase its share of insurance revenues in what Ankel calls ‘growth markets’ from 12% to more than 30% within the next five years. “Markets such as Malaysia, Indonesia, Taiwan or Thailand offer lots of potential and we will certainly look into these, too,” he says. In fact, Ankel is counting on growth across all core lines, with international insurance programmes expected to make a large contribution to this.

International expansion

Ankel observes that investment of Asian companies abroad has increased considerably in recent years. “For example, Indian and Chinese investments and expansions in Africa, the US and Europe,” he says. “Companies have become more sophisticated with regards to their insurance requirements, [and] insurers now have a peculiar situation in fast developing markets like Asia.

“On the one hand, due increased population base and growing industry, there is enormous potential for selling products and services. On the other hand, with the climate change and hence vulnerability to natural catastrophe events, the insurance industry could be facing enormous accumulation of risks.”

While the insured property losses from recent natural catastrophe events in Asia make up only a fraction of total economic losses, Ankel says that insured nat cat risks and exposures in the region will “drastically increase”. “The changing climate and the fast growing economy in Asia are new challenges within property which should be carefully considered by insurers more than ever,” he says. “It is crucial for global insurers like AGCS to have a robust system in place for accumulation and control of nat cat exposures to ensure that the company will be there for the clients on a long-term basis.”

Dealing with diversity

In addition to his regional responsibilities for AGCS’s offices in Singapore, Japan and Hong Kong, Mr Ankel is also head of AGCS’s Singapore branch office; all of which, one would assume, requires quite a measure of diplomacy. And Ankel puts it in an appropriately diplomatic way. “Asia represents almost 50 countries with a diverse group of people, so one must also be able to manage the cultural and geographic diversity,” he says.

There is also great diversity in the standard of risk management in the region. It has improved at most major Asia-based companies in recent years, Ankel observes, with many aiming to adopt international best standards. “Enterprise-level risk management as a strategic function is not yet commonplace in many Asian companies, but we feel this is likely to change in coming years,” he says. “We believe there is an opportunity for Asian risk managers to take a more holistic and strategic view of their roles, as trusted advisers to senior management teams, or even at board level.” Ankel believes that risk management should be co-ordinated “at a global level, not at a fragmented local level”. “It is about much more than insurance purchasing,” he adds.

Listing some of the emerging threats on his radar as climate change, cyber, nano-technology and reputational risks, Ankel says that prevention is better than cure. “But in risk management we believe you need both,” he says. “Prevention through effective risk management and cure through effective loss transfer (insurance). Risk managers need to address both sides of the coin here.”

Indeed, Ankel expects that the role of the risk manager at corporate level in Asia will only increase in importance, supported by a growing awareness of the benefits of strategic risk management, especially in businesses that are expanding internationally. “This can only be a positive move for both clients and insurers,” he says.