Allianz: Mega loss and lawsuits worth billions in the USA - Strong criticism of the ECB: "Robbing of money from private individuals"

Created: 02/18/2022, 15:26

Allianz insurance logo - and in front of it a red pedestrian traffic light.

© Christoph Hardt/Imago

Storms, floods, low interest rates: Allianz 2021 was not affected by the usual risks for insurance companies.

The US judiciary is currently the most expensive risk.

Munich - The Allianz board is repentant after billions in losses in the United States.

CEO Oliver Bäte expressed his regret to the angry investors in Munich and assured: "The management will bear a reasonable share of the burden."

Since the payment of Allianz board members - as is usual in DAX companies - is linked to performance, Bäte and his colleagues will have to accept a drop in salary: "That will have a significant impact on our remuneration," said the manager.

The extent of the salary cuts will only become apparent on March 4th, when the annual report is published.

Allianz insurance: Mega loss due to US asset management

The Munich Dax group* has set aside 3.7 billion euros due to legal disputes with major US customers, the net burden in the annual balance sheet amounts to 2.8 billion euros.

US investors blame asset management Allianz Global Investors (AGI) for the billions in losses in spring 2020.

The failed deals have nothing to do with the original core business of insurance: the subsidiaries AGI and Pimco are also among the largest asset managers in the world.

The serious effects sound like juggling in fragile financial markets: The allegations are that managers did not comply with their own guidelines and did not react appropriately to price slumps at the beginning of the corona pandemic.

According to US media reports, the plaintiffs included the New York Metro, the teachers' pension fund in the state of Arkansas and the Teamsters union.

Allianz* has now come to an agreement with the majority of angry investors, Bäte said.

However, the investigations of the US Department of Justice and the US Securities and Exchange Commission are not complete.

The US judiciary is feared for high fines that companies have to pay after errors.

However, the financial course within the group now seems to be set for success again: for 2022, the board is targeting an operating profit of between 12.4 billion and 14.4 billion euros.

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Allianz: Sharp criticism of the ECB

In addition, the Allianz board of directors attacked the ECB policy* sharply.

Bäte criticized the European Central Bank in connection with the high inflation: "In Germany we have interest rates of minus five to six percent, which is basically theft of private individuals' money." The ECB's predictions were "all wrong", the one with the Low interest rates and "quantitative easing" - ultra-loose monetary policy - the hoped-for goal of higher investments in Europe was missed.

Like the entire insurance industry, Allianz has suffered from the low interest rates in recent years, especially in the life insurance business.

"Interest rates have to rise, now," demanded Bäte - and at the same time emphasized that great caution should be exercised.

The bottom line is that the Allianz Group earned around 6.6 billion euros last year - with insurance and asset management - three percent less than in the previous year.