Allianz ready to pay more in renewals for ‘more conservative’ stance

Global insurance group  Allianz will plough through the reinsurance renewals season with demands for ever-more coverage in the face of inflation threats despite clear signals that reinsurance protection will come at a cost, group CFO Guido Terzariol (Pictured) has said.

“If you ask me, we are getting more conservative,” Terzariol said of Allianz’s sought-out 2023 renewal stance. “We are getting more protection” with full knowledge they will pay “a bit more of premium.”

While Terzariol described changes as more “conservative,” he also suggested “you can put [the changes] to managing inflation.”

Allianz is seeking a reinsurance programme structure largely matching its running standard. “We are not fundamentally changing the programme,” Terzariol said. Allianz is admitting “some changes,” but all inside a standard range of deviation. “Sometimes you can get more aggressive in some position or you can get more conservative.”

Comments mirror the stalwart stance presented by Allianz’s chief reinsurance buyer Jan Störmann in a late October  interview for Intelligent Insurer.

Faced with a chorus of reinsurer demands that cedents not only accept a major hike in prices, but additionally adjust structures, be it a move to named perils or higher retention levels after a decade of stagnation, Störmann drew lines in the sand.

Retentions may be a bargaining point and prices an ever-open question to the market, but treaty structure is Allianz’s own internally-set sovereign decision. “We have always looked to protect on a global basis,” Störmann told Intelligent Insurer at the time. Allianz’s global programme of two major towers – one for the US and one for remaining global “has been the case for 10 years, will be the case next year and also probably for the next 10.”

According to CFO Terzariol, Allianz walked into the 1.1 2023 renewals ready to pay the price to stay that course and is already putting that cost into the rates it is charging its own customers.

“We knew that price was going up,” Terzariol said. “We are in a market where we expect we are going to pay a higher reinsurance premium for 2023 and that is part of how we are setting our prices.”  Hurricane Ian only confirmed a direction in pricing that had been long since set, he suggested.

“From that point of view, I don’t think we are going to have any surprises.”

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