Journal - Allianz

Allianz MexicoAROUNDTHE WORLDInvestment in a self-determined life:Allianz handed over a check forEUR 50,000 to the Street Children Projectin Mexico CityJournal onthe internetAllianz Journal is going online.As of this edition, the Allianz Group’semployee magazine will be availablefor viewing at http://knowledge.allianz.com.Older editions will also be availableon the Allianz Knowledge page.The December edition of the Journalwill appear exclusively in electronicform.HTTP://KNOWLEDGE.ALLIANZ.COMHelp for street kids“Original andaccessible”The Fundación Por Niños de la Calle wasfounded 19 years ago. Since then the foundationhas taken hundreds of homelesschildren and young adults off the streetsof Mexico City and provided new opportunitiesfor them. Since June, the socialinstitution has had another advocate: TheAllianz Foundation for North America andAllianz Mexico have helped out with adonation of EUR 50,000. The money willgo to a project to house boys aged ten to17 in a transitional home to prepare themfor an independent life away from abuse,drugs and prostitution. The foundation’ssuccess rate is 85 percent. Allianz MexicoCEO Sergio Ghibelini announced that, inaddition to providing financial support,Allianz will also organize programs suchas computer classes to help these youngpeople to lead independent lives.WWW.ALLIANZ.MXWWW.PRONINOSDELACALLE.ORG.MXAllianz Journal is among the award winners ofthis year’s inkom Grand Prix, organized by theGerman Public Relations Association (DPRG).The Allianz Group’s magazine was honored witha Silver Award in Germany’s oldest competitionfor employee media. The nine members of thejury, made up of media scholars, academics,ALLIANZ GROUPJournalDeutsche International Ausgabe Edition 1 | 12011| 2012Space travel for beginnersCountdown in the desert2651Digital broadsideInto the netCrocodiles on the looseThailand fights the floodsJournal_1-12_e_2202_P.indd 1 29.02.2012 08:54:53experts and journalists, particularly praised the magazine’s originality, journalisticrange and accessible language. “The employee medium is exemplary – fromthe design to the layout. It addresses the workforce in a professional manner,” saidthe jury.The Deutsche Telekom employee magazine, you and me, and the magazine ofthe German Organization for International Cooperation, wir, received the platinumawards. Gold went to Bosch, Deutsche Bank, Audi and the German Army. Theaward ceremony was held at the Axel Springer Publishing House in Hamburg inJune. inkom Grand Prix has been reviewing employee magazines and newspaperspublished in Germany by companies, government bodies and nongovernmentalorganizations since 1995. In the interim, the competition also been extended toinclude contenders from Austria and Switzerland.WWW.INKOM-GRANDPRIX.DEAllianz introduced a new way forcustomers to pay premiums in theIvory Coast. In June, the Allianz Côted’Ivoire Assurance Vie marketeda microinsurance life product and aSeniors requiredSince some 100 Allianz retirees took upAllianz4Good’s challenge to help out as advisers atthe startsocial social network last year (see AllianzJournal 2/2012), the arrangement has expandedto two other organizations: the Social EntrepreneurshipAcademy and My Finance Coach.At startsocial Allianz senior experts can work aspanel judges or coaches and help develop socialprojects. At the Social Entrepreneurship Academythey have the opportunity to assist young socialentrepreneurs, and at My Finance Coach they canpass on their wisdom about business and financeto school children.“Our retirees have vast knowledge and valuablelife experience,” says Katharina Rauscher fromAllianz4Good. “That’s exactly what we need toprofessionalize social projects and to combineentrepreneurial spirit with social commitment.”Africa: paymentby cell phonesavings product where the customer’scell phone company doubles asa premium collection center. Insteadof cash or check payments, premiumsare automatically debited fromthe customer’s cell phone account.A monthly payment of USD 1.30is deducted for the life insurancepolicy and at least USD 4.50 for thesavings plan.Allianz now offers microinsuranceproducts in eleven countries. Apartfrom countries in Africa (Egypt,Burkina Faso, Ivory Coast, Cameroun,Madagascar, Mali und Senegal),this type of insurance is also availablefor low earners in Columbia,India, Indonesia and Malaysia. TheWWW.SEAKADEMIE.DEWWW.STARTSOCIAL.DEWWW.MYFINANCECOACH.DEoverwhelming majority of morethan 3.8 million Allianz microinsurancecustomers hail from Asia.In the spring, Allianz asked ninepolicyholders from Columbia, Indiaand Indonesia who had receivedbenefits from their microinsurancepolicies about their experience. Theinterviews, which were randomlyselected from thousands of claimscases, can be seen on YouTube.Allianz4Good contributed EUR 2,500for the production of each video.WWW.ALLIANZ-AFRICA.COMWWW.YOUTUBE.COM/USER/ALLIANZ→ MICROINSURANCE CLAIMAllianz Group Journal 3/201267

AROUNDTHE WORLDAllianz Group Journal 3/2012HallerPERSONALIAAs of August 1, 2012 RemiVrignaud took over as CEO ofAllianz-Tiriac Asigurari in Romania.He moved from Allianz Elementarin Vienna where he has spenteleven years in various senior positions.His predecessor RangamBir at Allianz-Tiriac was appointedHead of Property and Casualtybusiness for Allianz Asia Pacificand became a part of the regionalmanagement team located inSingapore.Surgical insurance for horsesThere are around a million horses in Germany,but only about ten percent are medicallyinsured. Veterinary treatment, particularlyoperations, can be very costly, so in July AllianzDeutschland launched an equine insurancepolicy to cover surgical fees. Dog and catowners have been able to insure their petswith Allianz since 2008.Three types of equine insurance areavailable. All reimburse costs for certainoperations, tests performed up to theday before the intervention, medicines,consumables and up to ten days of postoperativecare. Stabling and feed are alsocovered for up to ten days if a horse hasto stay at a veterinary clinic. There is noexcess to be paid by policyholders. Annualexpenses of up to EUR 10,000 are paid bythe insurance. The premium is EUR 13 to30 per month, depending on the level ofcover chosen.WWW.ALLIANZ.DEAllianz France expandsbroker businessAllianz France has taken over the P&C activities of Gan Eurocourtage, a subsidiaryof the French insurance company Groupama. The two companies reached anagreement in June. Gan Eurocourtage is one of the leading P&C insurance companieson the French broker market. After the transaction, which involved thetransfer of a premium volume of around EUR 800 million, 2,500 brokers will be partof the Allianz network in France – one of the biggest broker platforms in the country.600 Gan Eurocourtage staff will be transferred to Allianz.both pictures: ShutterstockTAMCulture for the youngFor ten years now, the Allianz CulturalFoundation and Allianz agents in Germanyhave been financing projects at communitylevel to promote European thinking. 2/3 ofthe project costs – up to EUR 2,100 maximum– are covered by the foundation,1/3 is paid by the agents. A year ago, thissuccessful concept was extended to Austria,where Allianz agents are now sponsoringmore than 20 such initiatives.One of them is the integrated kindergartenWiener Kinderfreunde (Viennese Children’sFriends), which looks after 37 girls and boysfrom twelve countries. The children learnto play instruments together, study musicand put on plays, which they then performin nursing homes and other social institutions.Michael Haller, a general agent inVienna, contributed EUR 1,000 towardsthe purchase of musical instruments andlanguage-learning games.Another example of a successful culturalinitiative comes from Waidhofen in LowerAustria, where Allianz agent Andreas Hanischsponsored the production of Dreams andNightmares at the Theater an der Mauer(TAM). In the play the 15-to-17-year-oldmembers of the junior group at TAM expresstheir dreams and desires as well astheir anxieties about the future. One aimof the campaign was to learn to talk aboutproblems and dashed hopes. Hanisch contributedEUR 1,500 towards the productionof the play and publicity in local print media.Following increased demand the AllianzCultural Foundation will increase its budgetfor the program by 20 percent to the amountof EUR 120,000.WWW.ALLIANZ-KULTURSTIFTUNG.DEAWARDSAllianz Life made it into theranking Fortune 100 Best Companiesto Work For. The US subsidiaryof Allianz Group took part in thecompetition for the first time. Onlythree other insurance companiesacross the country made the list.Genialloyd, Allianz Italy’s directsale subsidiary, ranks first forpresence on social media among allItalian insurers according to a studycarried out by Osscom, the CatholicUniversity research center concerningmedia and communications.Allianz SE Investor Relationshas been awarded the prize for thebest IR work in Germany and in theinsurance sector in general by IRMagazine in June. On top of that,the team also won the Grand Prixas the best IR team in Europe acrossindustry borders. IR head OliverSchmidt was voted best IR professionalin Europe.WWW.ALLIANZ.FRWWW.GROUPAMA.COM89

OPINIONSGlobalAllianz Group Journal 3/2012The court case against the punk bandPussy Riot has provoked fierce criticismin the West. How is it perceived inRussia?In Russia too there is strong criticism of thesentences, particularly from the opposition.But a large majority of the Russian populationcondemned the band’s performance inthe cathedral, and many demanded severepunishment. In other words, the court, theChurch and the political leadership, who encouragedthe court to issue these sentences,can claim to represent a majority.Speaking of the Church, what role does itplay with regard to Putin’s authority?The Russian Orthodox Church is certainlynot a classical instrument of power. Butalongside the army it continues to be theinstitution that enjoys the biggest trust ofthe Russian population. For many people– whether they’re believers or not – theChurch embodies Russian identity. You haveto realize that the Russian state had to becompletely reinvented after 1991. For overa hundred years no Russian state had ruledover such a small territory as the presentone. The Tsar’s realm was as big as the SovietUnion. It included Central Asia, Ukraineand Belarus. The population contracted byalmost a half after the collapse of the SovietUnion. And this new Russia was looking foran identity. The Church plays an importantrole in this respect. It represents Russiancontinuity, Russian identity.Is Russia safe for foreign investors?Yes and no. For major investors who enjoypolitical support in the government, it’scomparatively safe. For small and mediumsizedcompanies, on the other hand, it’sdifficult because there’s still no independentjudiciary. Economic jurisprudence in theregions continues to be a difficult issue. Ifyou are able to advance a case to the federallevel, you have a relatively good chance of afair process. In the regions, where oligarchs,governors and regional elite hold sway,your chances are slim. And when politicalinterests are at stake, the independence ofjudges at federal level leaves much to bedesired too.Could joining into the WTO help to shapean independent judiciary?It’s certainly an important step. There’salready the European Court of Human Rightsin Strasbourg and the Human Rights Charter,of which Russia is a signatory. Russians whofeel they have been unjustly treated bytheir own judicial system can go to Strasbourg.And in many cases Strasbourg hashanded down a different ruling than theRussian courts. The Russian state has alwaysrecognized these verdicts. This hasn’t hadan effect on the Russian judiciary itself so far,but the state is at least compliant. This beingthe case, it will also conform to WTO rulings.But it will take time before they are embeddedin the local legal system.Russia’s weal and woe is dependent onits oil and gas exports. How stable isPutin’s system?At the moment I see no alternative politicalforce that could replace this system. It is conceivable,however, that it will be reformedfrom the inside out, becoming more flexible,and allowing other political parties greaterlatitude. But it could also become more repressive.Both scenarios are possible, and thecountry has a history of both models. At themoment the pendulum is swinging towardsgreater repression. Greater flexibility toinclude the opposition would certainly be amore intelligent solution. I believe that themiddle classes are more willing to work constructivelywithin the system than to followa strategy of total opposition. Unfortunately,in recent months the Putin leadership hasshown little inclination to make any concessionstowards this potential.Major infrastructure projects are plannedin Russia in the coming years. Can thecountry free itself from its commoditybasedeconomy?Hardly any money has been invested inthe country’s infrastructure over the past20 years, including in pipelines, roads, andthe rail network. Much of it is in extremelybad condition. If Russia wishes to becomea state that is more than just an exporter ofcommodities, it must invest money in itsinfrastructure – and a great deal of money.The question is: how effectively will thismoney be invested? Analyses show thatroad construction in Russia is much moreexpensive than in other countries. One mustassume that corruption plays an importantrole here. This means that something mustbe done to combat corruption as well asimprove the infrastructure. But you wouldneed independent courts to do that.But even that won’t be enough. The statewould have to ensure that young engineersand scientists don’t leave the countryin droves. Russia’s innovative power hasgradually diminished over the past 20 years.Thousands of young, well-trained Russiansare moving abroad. There is in fact a braindrain, a migration of skilled workers who arevital to Russia’s development but who seeno place for themselves in the country in thecurrent circumstances. A Russian leadershipthat wishes to halt this exodus would haveto create living conditions that make itattractive for young people to remain intheir home country.WWW.SWP-BERLIN.ORGFRANK STERNBullets in orbitOn October 1, 1957 the Russians launched Sputnik 1, ushering in the dawnof the space age. Fifty-five years later, millions of objects of every shape andsize are orbiting the Earth – most of them along unknown trajectories.Astronauts and Cosmonauts are beginning to find things a bit crowded.1213

GLOBALleft and page 13: dpa / picture-alliance | right: ShutterstockAllianz Group Journal 3/2012SATELLITE INSURANCEIn 2011, the industry’s total premium incomefrom satellite insurance worldwide was USD 800million, with losses of USD 600 million. SpaceCo’spremium income from the satellite business in2011 was approximately USD 116 million.WWW.SPACECO.EUSolar stormsIn the past two years there have been two close callson the International Space Station (ISS) when fragmentsof old spacecraft sped toward it on a collision course.They missed the ISS by sheer luck; the crew would havehad no time to take avoidance action. According to astudy published by Allianz Global Corporate & Specialty(AGCS) in July, such close encounters will become morefrequent if we fail to remove the debris that has beenaccumulating in near-Earth orbit over the past five andhalf decades and that poses an ever growing hazard forboth manned and unmanned space travel.“The space around our planet is becoming increasinglycongested,” says Thierry Colliot, head of SpaceCo, theAllianz specialist for satellite insurance. Even if westopped putting satellites into space, the problem wouldgrow, because the number of flying objects increasesexponentially with every new collision. At the momentaround 800 geosatellites, weather satellites and telecommunicationsatellites are circling the Earth in trackedorbits. But there are also 16,000 pieces of junk witha diameter of more than 10 cm, 330,000 fragmentsmeasuring 1 cm to 10 cm and 35 million pellets lessthan 1 cm in size. But even these can cause enormousdamage if they collide with a satellite or spacecraft.Traveling at a speed of 10 kilometers per second, theyare ten times faster than a speeding bullet.Orbiting fragmentsGuiding spent satellites back to Earth so that they burn upduring reentry into the atmosphere will not be enoughto solve the problem, warns Colliot. Every year we wouldneed to capture ten large pieces of debris and renderthem harmless if we want to prevent the number of flyingobjects from increasing further. In 2009, the Russiansatellite Kosmos 2251 and the US satellite Iridium 33 collided,spawning thousands of new orbiting fragments.Satellites and spacecraft are threatened not onlyby collisions with orbital debris but also by massiveonslaughts of charged particles from solar storms,which can trigger malfunctions and system failures.It is estimated that up to now about 40 satellites havebeen damaged or destroyed by solar storms. Even onEarth solar eruptions can have unforeseen consequences(see box).It’s no wonder that Colliot hears alarm bells ringing.About a quarter of the 800 satellites circling the Earth –worth a total of USD 22 billion – are insured againstdamage and malfunction. Whereas damage to geosatellites,which orbit 300 to 2,000 km above the Earth,are usually borne by the operating country, damage totelecommunication satellites, which hover 36,000 kmabove the equator and cost around USD 200 millioneach, is largely met by private providers. Every year 20to 25 insured commercial satellites are launched.When the Earth was hit by a solar hurricane in 1859 it was regardedas little more than a curiosity. The aurora borealis couldbe seen as far south as southern Europe and Cuba, and a coupleof telegraph stations caught fire.Today a solar storm of that magnitude would have unforeseeableconsequences. “In theory, such an event only occurs once every500 years,” says Michael Bruch, head of R&D at the EngineeringNetwork of Allianz Global Corporate & Specialty (AGCS). “But ofcourse that doesn’t mean that there are 350 years left before thenext one happens.”With every technical advancement mankind has achieved in thepast century, it has made itself more vulnerable to these kinds ofextraterrestrial attacks. The energy infrastructure, the backboneof today’s industrial and information society, is also its Achilles’heel. It would take far less than a superstorm like the one in 1859to wreak havoc on Earth. In March 1989, a solar storm some 20times less intense than the 1859 incident triggered such violentgeomagnetic fluctuations in overland transmission lines thatthe power grid in the Province of Quebec broke down within92 seconds and was only restored nine hours later.1415

GLOBALdpa / picture-allianceAllianz Group Journal 3/2012In full flightOut of controlThis April the European Space Agency (ESA) lost contact with its Earth observation satellite Envisat,a whopping piece of equipment weighing eight tons, which is now orbiting without power about790 km above the Earth. It is estimated that Envisat could continue to hurtle through space for another150 years before breaking up and incinerating as it reenters the atmosphere. In the meantime, it hasabout a 30 percent chance of colliding with another object. That would greatly increase the numberof objects in the junkyard orbiting around earth.Satellite operators are now obliged to bring back allspace equipment at mission’s end. But only the latestgeneration of satellites has such recovery capabilities, acontrolled fall being the method most commonly used.The bulk of the space junk burns up during reentry intothe atmosphere. The rest is guided over an unpopulatedarea or the sea – at least most of the time.Uncontrolled descentdefunct satellites can be removed from orbit. Zappingthem with lasers has been mooted. Alternatively, theycould be docked to satellites, which would then carrythem piggyback fashion to Earth. Another option wouldbe to refuel satellites in space to keep them in orbit.“There are some interesting ideas out there, althoughthey would be very expensive,” says Colliot. “There isno sign of a real breakthrough just yet.”The harassed executiveglances at his watch ashe hurries through thecrowded airport terminal:just five minutes left tocheck in for his flight toFrankfurt. He can’t affordto miss this meeting;there’s an important dealat stake. This is the typeof individual Allianz istargeting with its airportadvertising campaign. Theadverts are visually strongand especially adapted tothe airport environmentso that they stand out andmake you take notice.LOIS HOYALBelieve in yourself.Last year after an uncontrolled descent the US satelliteUARS plummeted into the Pacific off the Canadian coast.There was also only a rough estimate of the reentry pathof the Russian space probe Phobos-Grunt, which fell intothe eastern Pacific in January. But it could equally havegone disastrously wrong.© Allianz SE, GermanyKatrin Green, Sprinterallianz.com/believe2With you from A-ZSome promising suggestions have been made as tohow spent rocket stages, disused space capsules andPartner of the InternationalParalympic Committee.1617

GLOBALAllianz Group Journal 3/2012International travelers experience a range of emotionsas they travel through an airport – stress about makingthe flight on time, concern about the journey ahead andwhat’s waiting at the other end and boredom as theyhang around at the gate before their flight. It’s not easyto attract the attention of international business travelersin such a busy environment, having to compete with athousand and one distractions. But that’s the challengeAllianz wants to meet with its 2012 airport ads.“Airport campaigns have always been frontrunners inglobal brand building,” says Christian Deuringer, headof global brand management at Allianz SE. The newand improved campaign now focuses more on digitaltechnology and integrates a mixture of advertisingapproaches, from large banners to interactive posters.The campaign will run from May to December this yearat several airports across Europe and Asia, namely Paris,Munich, Frankfurt, London, as well as Seoul, Hong Kong,Singapore and Jakarta.The ads are targeted at business travelers who take morethan three international business trips per year – you’retalking about well-educated opinion leaders and decisionmakers. “We want to raise awareness of Allianzand make a difference within members of this targetgroup; opinion leaders and decision makers who alsohave a significant influence on other people and importantbusiness decisions,” says Matthias Fichtl of AllianzGroup Market Management. The various topics covered,such as roadside assistance, the sponsorship of theParalympics or financial stability should spark the interestof this very audience.© Allianz SE, GermanyCatherine Porte Arondelle, Allianz Global Assistance DoctorRaising brand awareness: the airport advertising campaign uses thought-provoking advice and bold messagesAllianz Global AssistanceHelping people in over230 countries and territories.allianz-assistance.comWith you from A-ZThis QR code leads users toa video which tells the story ofone of the Paralympics athletes“Airport campaigns have always been frontrunnersin global brand building.“ Christian DeuringerThe road assistance poster, for instance, features a youngGerman who has bought an Allianz Global Assistancetravel insurance policy and is setting off on a road triparound the world in his van. “By featuring the AllianzGlobal Assistance services in this Global airport campaign,we are able to showcase our brand’s strength andshare our expertise and competencies, particularly inthe area of roadside assistance and medical repatriation,”says Sophy Rigommier Hunter of Allianz Global Assistance.“These are potential situations that internationalbusiness travelers can be faced with during their travels.We want them to know that Allianz Global Assistanceis the right company to rely on for a variety of travelrelated services.”Different executions suit those passengers with “lowdwell time”, namely people in hurry, or those with“high dwell time”, meaning those sitting around a gateand welcoming distraction. Thought-provoking advice,big iconic images and bold messages work best in lowdwell time sites, while high dwell sites are good placesfor interactive posters, which include new elementssuch as web links and Quick Response (QR) codes.People can then access the web link or scan in the QRcode on their smart phone to download MyTravelAid,an app that is proving to be popular among busybusiness travelers thanks to its useful travel tips andinformation, such as emergency numbers in variouscountries, a drug dictionary, translations of first-aidterms and hospital information.1819

GLOBALEveryone has seen images of the world’s slumswith their shabby corrugated iron huts, squalidopen sewers and neglected children. Accordingto the UN, a third of today’s urban population –over a billion people – live in slums. Yet the appealof an urban promised land lives on. Enormousinvestment in infrastructure will be needed inthe coming years to cope with the swelling ranksof urban dwellers. Allianz has already begun totake stock.FRANK STERNGardens by the Bay in Singapore. The first stage of themegapark was opened in June. Cost so far: EUR 650 million2021

GLOBALShutterstock | page 20/21: IbrahimRothFact-finding tour in virgin territory: Futures and trends analyst Peter KöferlShabby huts, squalid open sewers, filthy children – a third of city dwellers live in slumsWhat remains of these drawing board dreams depends not least onwhether enough private investors can be found who recognize theirbusiness potential. The public sector can be ruled out as an investorin many parts of the world due to a lack of resources. The situationis dire because without infrastructure renovation, expansion andconstruction the megacities of this world are in danger of descendinginto chaos. Meanwhile the influx from the countryside continues:in 2050 around 70 percent of the world population will be living incities, compared to 50 percent of the earth’s seven billion inhabitantstoday. They are the engine of economic growth and produce between60 and 80 percent of a country’s GDP. But they also emit 70 percentof greenhouse gases and already consume almost 80 percent of theworld’s energy supply.Some estimates predict that a global investment of around USD 40billion will be needed in the next 25 years to achieve the eco-friendlyand sustainable renovation and expansion of urban infrastructure.40 billion! City planners and politicians have proposed integratedsolutions that cover everything needed for city life – from energy andwater supply to civil security, public transport, schools, universities,hospitals, nursing homes and waste disposal. However, the ecofriendlyconversion of a huge metropolis is much more difficult andcostly than building a new city from scratch.The ideal cityPeter Köferl, in charge of future and trend analysis at Allianz’sEconomic Research and Corporate Development, describes it asthe green transformation of the urban landscape. This has alreadybegun in some places: London hosted the first “green” OlympicGames. Copenhagen will be the first climate-neutral city by 2025,and Munich will be run entirely on renewable energy the same year.Many experts regard Singapore as a prime example of an ideal city.“As it’s an island state, the city cannot simply expand; it has to continuouslyreinvent itself,” said Siemens executive officer Roland Busch,head of Infrastructure & Cities, in an interview with the FrankfurterRundschau in April. “They go about it in an intelligent way.”Singapore is living proof that it’s possible to cope with a high populationdensity with the help of innovative models for water treatmentand waste recycling and that cities can be supplied more efficientlyand with less environmental impact than rural areas, where distancesare greater and networks less dense. Admittedly, the Lion State isone of only a few countries that can afford such intelligent solutions.Moreover, compared to metropolises such as Tokyo, New York, SãoPaulo, Bombay and Manila, this city-state of five million inhabitantsis still relatively easy to manage. But even on a larger scale, efficiencyand the intelligent use of resources is not entirely utopian. The questionremains: where is the money for these billion-dollar projectsgoing to come from, given the dearth of public funding.Against this background some good could come out of the financialcrisis. Current low interest rates have meant that investors such aslife insurance companies and pension funds, which are supposed tofind long-term, profitable and safe investment opportunities for theircustomers, have been wringing their hands to find viable alternativesolutions. Investment in the sustainable renovation and constructionof urban infrastructure – requiring, as mentioned, an injection ofUSD 40 billion in the next 25 years – could be the answer. This is especiallytrue as some of them offer stable returns on projects spanningseveral decades, which will be less affected by fluctuations in thecapital markets. Notoriously cash-strapped city councils would havethe option of tapping into nongovernment resources, and investorscould make long-term plans and invest directly in future growth.The era of dream returns may be over, and a new normality withits modest profits has arrived. But a return of seven percent is notinconceivable for green development projects – and this over thelong term. “Nevertheless, this is largely new territory for investors,”says Peter Köferl. “Currently there is no climate-friendly urbaninfrastructure investment class.” Allianz is exploring what form asuitable investment might take. Green-infrastructure funds orenergy-efficiency funds would be two possibilities. A first stepwould be for policymakers to provide investment security anda stable investment climate.Bumpy pathThere will be no shortage of projects that could be of interest toinvestors in the foreseeable future, although the path to a greenurban future will probably still be pretty bumpy. For years expertsat climate conferences have been calling for a huge reduction incarbon dioxide emissions. At a local level this could be achieved byconverting urban transport systems, switching energy sources andrenovating housing and public buildings to be more energy-efficient.Be that as it may, a carbon-free world, particularly in Asian thresholdcountries, still seems a distant dream. China and India for instancecontinue to fuel their economic growth with coal, and India is nowproducing cheap cars that the middle classes can also afford.What an urban future will finally look like, which strategies will beemployed to counter climate change, which transport systems willbe given priority, how water supplies will be secured so that groundwaterlevels remain stable – the answers to all these questions couldsoon be formulated with the help of input from private investors.2223

Strategy“The accusations areunfounded”Jay RalphAllianzAllianz is the first company in the world to set up a committee at board level to adviseon the consideration of ecological and social issues in corporate decision-making.We spoke to Jay Ralph, head of the ESG Board (Environmental, Social and Governance),about the rationale behind the “eco board”.INTERVIEW: MICHAEL GRIMMMr. Ralph, was the foundation of theESG Board a reaction to NGOs’ concernsabout Alianz’s investments in coal inChina and asset management’s clientinvestments in funds that include commoditiesfutures?The accusations made at our Annual GeneralMeeting in May were not the trigger, butrather a catalyst for our move to set up anESG Board. As an insurer and asset manager,Shutterstockwe have the power to influence key issues.We want to use this influence in a responsiblemanner and manage it via our newESG process.Does Allianz now intend to stop thesekinds of investments?The first “official action” taken by the ESGBoard was to enter into dialog with the NGOsconcerned. In July, we met with Greenpeacein Hong Kong and Oxfam in Berlin. TheAllianz investments in coal in China are quitelow compared to our other investments.Together with Greenpeace, we are lookingat whether to sell these interests or ratheruse our status as an investor to encouragebetter environmental practices.When we met with Oxfam, we listened totheir concerns and brought in our investmentexperts to respond in detail. To date,we have not received any response to ourpoints and factual evidence refuting theirpast accusations.So what arguments and facts has Allianzprovided to refute the Oxfam concerns?The accusations are simply unfounded andeasy to refute, and additionally require amore in depth understanding of the subjectmatter. At our Annual General Meeting inMay, we made it clear to Oxfam that we donot invest our policyholders’ funds in eithercommodities or in commodity index funds.Only our asset managers, PIMCO and AllianzGlobal Investors invest some customer assetsin commodity index futures. They representless than two percent of our 3rd party assets.Around one third of this amount can be attributedto agricultural commodities. Theseinvestments allow farmers to hedge againstfluctuating prices: farmers want to makesure that they receive a minimum price fortheir harvest. They need a financial partnerto share the risk of fluctuating prices.Our customers generally make long-terminvestments. They do not buy real commoditiesor withdraw them from the market. Theymay make money when prices fall as wellas when they rise. They do not trade in themonth when the commodities are delivered,when prices are most likely to fluctuate. Whatis more, our customers have tended to investanti-cyclically, which helps to stabilize themarket. A withdrawal of these investors wouldhave a negative impact on both farmers andcommodity prices.So who is to blame for the price hikein agricultural commodities?According to the UN FAO and the OECD,the primary drivers of food prices areweather events, population growth, risingconsumption on emerging markets, tradebarriers and the increasing use of agriculturalland for biofuel production. The currentprice rise in grains due to drought in theU.S. are clear evidence to this assertion.Allianz and most experts are convinced thatthe price of the future follows the price ofthe physical commodity, not the other wayaround. However, if commodity futureshave an influence on food prices, then awithdrawal of our investments would havea negative impact on the individuals Oxfamwould like to protect.What can Allianz do to minimize theimpact of rising food prices on the poor?Investor withdrawal would be fatal. Risingprices confirm that the gap between supplyand demand is still widening. In order tocombat this, we need more investments inagricultural productivity, food productionand distribution. A withdrawal of long-terminvestors in commodity and index fundswould be negative, too.Farmers in the US benefit from crop insuranceand a highly developed futures market. Currently,most farmers in developing countriesand emerging markets do not have theseoptions available to them. Allianz will considerwhether micro-crop insurance andmicro-futures might benefit both the farmerand consumer in developing markets. If so,we will consider how we might participate.So does this mean that the issue is “doneand dusted” from Allianz’s point of view?The dialog with Oxfam would appear to haveended, but the matter is not closed as faras we are concerned. As an NGO, Oxfam iscommitted to an issue that is also importantto us. We believe that the widening foodsupply gap is one of the three biggest challengesfacing us, along with climate changeand demographic development, and webelieve that we can play our part in findinga solution.What specific role will the ESG Boardplay in this process?The ESG Board will ensure that, in our dialogwith internal and external experts, we canidentify key social and ecological issues in atimely manner, assess them correctly anddevelop pragmatic implementation options.Differences in the laws, cultures and basicphilosophies of stakeholders in the morethan 70 markets in which we operate meanthat we will not arrive at a uniform way toaddress each and every issue. Nevertheless,we want to serve our insurance andinvestment clients in a sustainable way andare conscious of our responsibility to society.This is why the ESG Board will offer our localcompanies content-related guidance onimportant ESG topics. However, for somecritical topics we will issue binding rules,such as those related to the ban on Allianzinvestments in certain weapons manufacturersor the prohibition on all weaponstransactions in crisis-ridden regions, bothof which already apply.The role of the ESG Board is not simplyto restrict certain transactions, it is alsocharged with the promotion of sustainability.Our positions will be influencedand formed by listening to NGOs and otherexternal stakeholders. This dialog will assistus in achieving our aspiration to be oneof the leaders in sustainable insurance andinvestments.2425

STRATEGYRothAGENCY FUTURE PROGRAM (AFP)AFP describes the business model for the agency channel,integrating many ideas from Allianz companies. It supportsAllianz companies taking part in the program with a “healthcheck” of their agency channels, integrating local strength andcustomizing the approach to their respective needs. So far theprogram has been rolled out in Austria, the Czech Republic,Germany, France, India, Italy, Spain and Switzerland.Louis de Montferrand (left) and Johan van Tholen“It really works”They’re still one of the biggest sources of revenue in the Allianz Group: in 2011,Allianz agents accounted for premium income of around EUR 34 billion worldwide,30 billion of which came from Europe. But gross written premiums and customernumbers are dwindling – as they have been for years. A new business model shouldhalt this downward trend.FRANK STERNThis is not Allianz’s first attempt to bringits agency channel back on a growth track.There were quite a number of initiatives inthe past, both in the Group companies andat Holding level but there was no breakthrough.The Agency Future Program (AFP)is set to change that, at least according tothe project leader Johan van Tholen. “Wedeveloped the program together with companieswith strong agency distribution andhave tested it extensively in Germany andFrance,” he says, “and it really works.” Hesounds slightly surprised himself.Before the AFP was launched at the endof 2010, van Tholen and his team analyzedthe current shortcomings in Europeanagency sales and pinpointed two fundamentalproblem areas. Firstly, there’s oftena lack of meaningful data at the point ofsale to provide pertinent advice. Secondly,agents have too little personal contact withcustomers because they are up to their eyesin paperwork. On average, only about onein five policyholders receives extensiveagency support. The rest often only knowtheir insurance agent from hearsay. It isspecifically these customers who are indanger of jumping ship and going to thecompetition.Plenty of optionsYet personal contact and one-on-oneadvice are actually an agent’s forte. “That’san advantage that no other channel has tooffer,” says Louis de Montferrand, ProgramLeader Distribution. “If that doesn’t work,there will be a point where you have to askyourself what this sales channel is actuallyShutterstockfor.” After all, there are plenty of otheroptions. This is where AFP comes in.According to the sales experts, if agencysales are to survive in the future, there hasto be a marked increase in the percentageof customers with multiple policies. Not onlydo such customers remain loyal for longerbut it’s also more efficient to administerseveral policies for one customer instead ofjust one. In the major European markets ofGermany, France and Italy there’s still quitesome room for maneuver: until now mostAllianz customers there have only had oneinsurance policy.This recipe for success sounds relativelysimple: agents will be given more breathingspace to carry out their own work – customercare and support – by trimming theagency processes and transferring administrativetasks, such as preparing claimsreports, making appointments, enteringcustomer data, to the back office. “This willallow us to concentrate on the strengths ofthe agency channel,” says van Tholen. Theconcept appears to be paying off: the testphase in Germany and France revealed thatby reorganizing agencies, productivity canbe boosted by over 25 percent.However, more time on the sofa alone isn’tenough to keep customers loyal. Accordingto van Tholen, who, like his team membersworked in sales himself in the past, somethinghas to change in the consultation andselling process. At the moment it focusesless on the interests and needs of customersthan on policy sales, notes the Dutchman:“It should be the other way round. A structuredanalysis of the customer’s situation isa key improvement of the AFP project andthe starting point of a trusting relationship.”Of course an agent only finds out what hiscustomers really need if he stays in closecontact with them, and not by sending anewsletter once every blue moon.Inadequate rulesAll the same, agents need reliable customerdata to have any prospect of success duringa customer consultation. That’s anotherweak point. Clear rules on collecting andstoring customer data have so far been asinadequate as automatic data exchangebetween back office staff and agencies. Thedigital world offers enormous opportunitiesfor improved distribution processes. In Francefor example, at the start of every week agentsreceive a list from the agency system Lagonof those customers who, according to theavailable data, would be most responsive toa sales consultation. The system even identifiesthe products they are most likely to buy,so that these can be mentioned during thesales talk.Van Tholen believes that people stillwant advice from agents even in the eraof internet and direct sales. “Many customersstill welcome professional advice,particularly in complex life matters,” hesays. “It’s a question of trust, and that’swhere agents excel.” But this strengthcan only be exploited if agents know whothey’re dealing with.Allianz Austria set the stage for the newbusiness model some years ago. The LifeCheck model placed customer support atthe focus of the selling process. Since thenagents have been asking policyholdersspecific, structured questions about theirpersonal situation, discussing their aspirationsand plans and proposing solutionsto realize them.The Austrian approach proved successful,making the new sales process a milestonein the development of the Agency FutureProgram: customers’ willingness to recommendthe company to others increasedmeasurably, and cancelation rates fell. Thenew customer approach is being widelyused under the name of Pro3 in Germanyand S’Energy in France. Initial test runs haveresulted in much improved sales figuresand increased customer satisfaction.The AFP project was launched in the CzechRepublic in April and in Spain and India inMay. “The concept works everywhere,” saysvan Tholen. “It will secure the future of theagency channel as one of the key pillarsof Allianz.”JOHAN.VAN_THOLEN@ALLIANZ.COM2627

STRATEGYAllianz Group Journal 3/2012Brand guardians: (from left)Tobias Unterguggenberger, PatriciaSchulz-Moll, Steffen DrögslerBRAND VALUESTop 10 financial services companies, 2010USD billions 0 36 9 12 15American ExpressJP MorganHSBCGoldman SachsCitiAxaMorgan StanleyAllianzTimmichtions in Brazil, Germany, France, Slovakia, Turkey andthe USA to stop using the words Allianz, Alliance andAlianza as a trademark or brand name. In some casesthe dispute had to be referred to the trademark andpatent offices or the courts. “Our legal clout varies fromcountry to country, depending on how established ourown trademark is and the business fields in which it isused,” explains Steffen Drögsler.SantanderVisaAmong insurance companies Allianz ranks second behind Axa, and eighthif banks are included. Top dog among financial services providers is AmericanExpress. The most valuable brand across all sectors is Coca Cola, valued byInterbrand at just under USD 72 billionSource: InterbrandValue and impactMore than ten years ago, Allianz began to rename those subsidiaries that werestill operating under their local brand names in their respective markets. In somecountries this presented no problem, in others it was a case for the courts.FRANK STERNBefore the Columbian subsidiary Colseguros could berenamed Allianz Colombia in May this year, the lawyersin Allianz Group Legal & Compliance department hada lot on their plate. Alianza Fiduciara, a small asset managementfirm in Bogotà, had gone to court because of arisk of confusion – and was able to invoke long-standingtrademark rights. “Usually it’s the other way round,” saysTobias Unterguggenberger, who is responsible alongwith Steffen Drögsler for trademark protection at GroupLegal. In the end the quarrel was settled out of court.That’s how trademark disputes frequently end, but moreoften than not Allianz can tip the scale in its favor. “It’soften enough to make clear which trademark rights wehave in each country,” says Unterguggenberger. In 2011,Allianz was able to persuade companies and organiza-Allianz has now had its name registered worldwide –except in countries like Eritrea and Somalia, where notrademark protection exists. Since the company beganto implement its one-trademark policy seriously, manysubsidiaries have switched over to the Allianz brand.Italy came under the Allianz logo in 2007 and Francein 2009 – important milestones on the road to a globalbrand name. Today 80 percent of the Group’s turnoveris generated under the Allianz name, compared to just65 percent in 2007. “We want to invest in a single strongbrand, instead of spreading our influence over five or ten,”says Patricia Schulz-Moll of Group Market Management.Established brand names are like a promise that instillstrust and reassurance and for which customers areprepared to dig deeper into their pockets. However, itmay take years before they become rooted in people’sminds. “As a company you have to be prepared to investin a brand name and see it as a value,” Schulz-Mollexplains. “In order to achieve that goal you sometimeshave to relinquish a locally established brand name.”Russia is a case in point. Until early this year Allianzoperated there through three subsidiaries using variousbrand names. One was Rosno, one of the best-knowninsurance companies in the country. Since April, followingmergers with industrial insurer Allianz Russia, andP&C insurer Progress Garant, Rosno has been operatingas Allianz Russia.The name change carries its own risks. “During atransitional period we will continue to take advantage ofthe familiarity of the local brand name Rosno in Russia.After two years we’ll change over completely to theAllianz name,” says Schulz-Moll. It was not certain thatthe changeover would meet with unanimous approvalwith customers. However, Russians also appreciate financialstability, international renown, trust and reliability –especially in these uncertain times. Allianz specificallyemphasized these values in its advertising campaign.“A campaign with Russian feeling,” says Drögsler.The fact that investment in a global brand is a smartmove is evident from the contribution it can make tothe value of the company. According to “Best GlobalBrands 2011”, a ranking drawn up by the brand consultantInterbrand, the Allianz brand is worth around2829

STRATEGYboth pictures: AllianzRussiaspecialAllianz Group Journal 3/2012Rebranding can be tricky: in Columbia an assetmanagement firm complained about the useof the Allianz brand name. Even switching fromMondial to Allianz Global Assistance doesn’talways run smoothlyIn the land ofonion domesEUR 5.4 billion and last year achieved the greatestgrowth in value among European financial serviceproviders. As far as global insurance companies areconcerned, only Axa was valued higher (EUR 6.7 billion).It is therefore understandable why Unterguggenbergerand his colleagues are keeping a close eye on the brandname. Any dilution of the brand would significantly reduceits value and impact.The brand guardians are currently busy overseeing theglobal transformation of the Mondial Group to AllianzGlobal Assistance. The switch from red to blue in 28countries will take several years. “It’s clear that rebrandingon this scale sometimes calls for special solutions,”says Tobias Unterguggenberger.sistance: there’s already a Global Assistance in Italy, andAllianz wanted to avoid a dispute. Moreover, the MondialAssistance name has been retained for some majorclients such as Air France that are associated with otherinsurance companies. A link from the website of theFrench airline to the portal of a travel insurance companyusing the Allianz logo would not look good.Such solutions may soon be needed more often. Allianzplans to enter new business fields with its Assistancecompany – in the health sector for example. “That’swhere new challenges for brand management await us,”Unterguggenberger believes.In Italy, for example, Allianz’s travel insurer and roadsideassistance company goes by the name of Allianz As-WWW.INTERBRAND.COM3031

RUSSIASPECIALRussia – a country that can shed two time zones but still have nine; acountry in which onion domes shoot out of the ground like mushroomsafter a summer shower; a country in which the men manage – by dint ofvodka and tobacco – to keep their life expectancy down to 62. A countryin which the president and prime minister regularly swap jobs, and carsare paid for in cash. Welcome to a country that cannot be understoodwith the mind alone.TEXTS: FRANK STERNShutterstock all pictures | also page 35: Stern (where not indicated otherwise)Allianz Group Journal 3/2012Birches. Birches, as far as the eye can see. When youtravel by train to the Russian boondocks – and they beginat Moscow’s city limits – you inevitably end up in a birchforest. The Canadians have their maples, the Germanstheir oaks. The Russians have their birches. “They’re veryhardy,” says Olga, our companion. Most Russian womenare called Olga by the way. Vera Alexandrowna Emelinais one of the few exceptions. But more about that later.Another defining facet of the country, in which a populationsmaller than that of Bangladesh lives in an area morethan a hundred times the size, are the onion-domedtowers. Garish and golden, bright and bulging, theyrise up in ever increasing numbers into the Russian sky,announcing the resurrection of the Russian OrthodoxChurch following decades of wanton impiety. Not onepage of a bible would pass between its spiritual leader,Patriarch Kirill, und Russia’s President Vladimir Putin,whom the churchman sometimes likes to praise as agift from God.Not everyone in the country sees the current presidentas a blessing. There has been overt opposition to Putin’ssystem of “controlled democracy”, at least in this giganticcountry’s capital. But behind the birch forests, sup-port for the former KGB officer appears solid. Even ifhe doesn’t endorse everything that the Kremlin does,there’s no denying that Putin has given the country acertain amount of stability, says one of the people wetalked to. “There’s no one in sight who could lead thecountry apart from him.”Weal and woeOf course stability could quickly evaporate if worldmarket prices for oil and gas go through the floor.These commodities are inextricably linked to Russia’sweal and woe, says Professor Professor Hans-HenningSchröder from The Foundation for Science and Politicsin Berlin (See interview on page 10). Its commodityeconomy makes the country extremely susceptibleto cyclical fluctuations on the world market. When theprice of crude oil collapsed on the international stockexchanges three years ago, Russia’s GDP plummetedby eight percent.But no one can deny that Russia, of which the lyricistFyodor Tyutchev once said, “cannot be understood withthe mind alone”, has enormous potential. Many Westerncompanies are counting on a sustained boom, setting3233

RUSSIASPECIALAllianz Group Journal 3/2012The nouveaux riches throw away their roubles in trendyrestaurants like there’s no tomorrow, while the rest meetup in the park to drink a few beers and make music. It’sas though the metropolis of 10 million people is tryingto catch up with Western developments of the past decadesin fast forward mode. Avant-garde, decadence andflower power – it’s all happening.The sun sets behind the Christ the Savior Cathedral onthe other side of the Moskva, bathing the river in a softlight. In February, members of the female punk rock bandPussy Riot stormed the altar and called on the VirginMary to save Russia from Putin. In August, they weresentenced to two years in a prison colony. Patriarch Kirillsaw the stunt as the work of the devil himself.A couple of crazy motorcyclists race along the riversidestreet at breakneck speed, stretch limos cruise pass ata leisurely pace, and on the Moskva Bridge a young girltakes off her T-shirt and reveals bare breasts to increaseher chances of a cheap lift – taxis cost a fortune inMoscow. She doesn’t have to wait long.A nose foropportunitiesHe has already stood at the helmof a market leader. Now HakanDanilesson has to demonstrate howto become one. That’s quite a task:at the moment Allianz Russia is stilla far cry from the top.all pictures: Stern (where not indicated otherwise)Hakan Danielsson“Our goal is to be among the top three,” Diekmannexplained in July in an interview with the Russian newspaperVedomosti. Only then will the company be ableto help shape the market. On the other hand, Russiamust be prepared to concede such a position to Allianz,Diekmann continued. “We know how to do things,” saidthe Allianz boss. “We know how to operate an insurancebusiness sustainably over the long term and bring ourconsiderable expertise to bear.”“There’s no greater vote of confidence in the businessworld than the transfer of brand rights to a subsidiary,”he says.At the same time Rosno was renamed, the P&C andindustrial insurers Progress Garant and Allianz Russiawere also merged with Rosno. Hakan Danielsson makesno bones of the fact that things didn’t go smoothlywithin the trio of companies. Many employees jumpedship during the restructuring process, and it wasn’talways the weakest ones. Danielsson now wants to starta new chapter, and he seems to have found the rightwords – quite literally: after just one year in the country,the mathematics graduate speaks astonishingly goodRussian. “Not perfect,” he says, “but people can understandme.” For months on end he burned the midnightoil after work to learn the language.Danielsson, the father of a son and daughter, likes thelanguage, and he has a good rapport with people.“Swedes and Russians have a lot in common,” he believes.“We both play ice hockey, we love hunting andfishing. We have our dachas in the woods and oursaunas. You could say that Sweden is a mini version ofRussia.” Except that, as he said, Sweden’s somewhatmore boring. Danielsson favors growth markets whereeverything is still in flux. “It’s just that there’s moregoing on – in both the positive and negative sense,”Since April, Rosno, together with the industrial insurance arm, and Progress Garantoperate under the Allianz Russia name“Sweden is really boring,” says Hakan Danielsson abouthis homeland. “Because it’s so stable.” That’s not veryinteresting for a man for whom the goal is the journeyitself. But for the moment the 51-year-old can’t complainabout being bored. Order and stability aren’t wordsthat spring to mind when it comes to Russia, whereDanielsson has been living for over a year. Before movingto Moscow he was the CEO of the Swedish insurancecompany Länsförsäkringar –market leader amongSweden’s P&C insurers. “When we increased our marketshare by 0.2 percent it was a big celebration. It’s just nofun,” he says.About a year ago Allianz chief Michael Diekmannbrought him in as head of subsidiary Rosno. Althoughthe company is well known in Russia, it only ranks eighthin P&C and sixth in life insurance – outside of the realmDiekmann thinks appropriate for a global company.This also applies to corporate governance. Russia iscurrently ranked 143rd on Transparency International’scorruption perception index. Dubious practices are commonplacein the Russian business world, and those whodon’t play the game are often left out in the cold. “Wesometimes lose business,” confirms Hakan Danielsson.On the other hand, international investors are lookingfor business partners with a clean sheet. “Like us.”At a meeting in Moscow in July, which was attended by500 employees from various Group companies, MichaelDiekmann again emphasized the importance of imageand reputation, particularly in times in which financialservice providers are widely viewed with mistrust. Hewould rather relinquish lucrative business than put thecompany’s reputation at risk, he said. Diekmann seesthe fact that Rosno has been operating under the Allianzbrand since April as a tribute to local management.In Moscow, Allianz CEO Michael Diekmann answered employees’ questions aboutthe future of Allianz in RussiaSjukow3637

RUSSIASPECIALhe says. “And you can exert a stronger influence ondevelopments.”Meanwhile he’s traveled all over the country and introducedhimself to the staff in many of the 92 branchoffices between Kaliningrad and Kamtchatka. He’s quickto answer when asked which place he liked best on histravels: “Vladivostok,” he says, the city at the easternextreme on the Sea of Japan. “It looks like San Francisco,”he gushes. “The sun on the snow-covered hills with theharbor below – indescribable.”the German he’s talking to looks at him askance – aRussian author recently described her country as big andlazy – Danielsson explains: compared to the Germans,the Russians are much better at experimenting. “Theytry things out, and if they don’t work, they try somethingelse. Russians have a nose for opportunities, whereasGermans organize a working group and draft plans.”That’s cleared up then.ale pictures: Stern (where not indicated otherwise)Stories fromthe VolgaAllianz Group Journal 3/2012The people he’s met have great entrepreneurial spirit,he says, praising the qualities of the natives. And whenWWW.ALLIANZ.RURUSSIAAllianz Russia1991 Ost-West Allianz (subsequentlyAllianz Russia) founded2002 Allianz acquires a 45 percent stake in Rosno2003 Rosno Life Insurance founded2007 Allianz becomes sole owner of Rosno2010 Allianz launches pension fund business in Russia2012 Rosno, Progress Garant and Allianz Russia are mergedand marketed under the Allianz brand nameP&C INSURANCE – ROSNO• Gross premiums written 2011 EUR 535 million• Market position 8th• 5,400 employees• 10,000 agentsLIFE INSURANCE – ALLIANZ ROSNO LIFE• Gross premiums written 2011 EUR 60 million• Market position 6th• 370 employees• 4,500 agents(Data: Allianz Russia)MoscowRussian Insurance marketPopulation 140 millionArea17 million square kilometersINSURANCE PENETRATION(premiums as percentage of GDP 2011)• All insurance 2.4• Life insurance 0.1• P&C insurance 2.3• Position worldwide 53INSURANCE DENSITY 2011Life insurance premiums per capita USD 8P&C insurance premiums USD 295(Data: Swiss Re, sigma no. 3/2012)Stretching more than 3,500kilometers, the Volga is Europe’slongest riverOne of the first times she went to see a customer, Vera AlexandrownaEmelina was thrown out after barely uttering the word “insurance”.Today, the physics graduate is the head of the Volga directorate of AllianzRussia covering an area bigger than Poland.Vera Alexandrowna Emelina worked for ten years as anengineer on the Soviet space program. Then MichailGorbatchov turned the world upside down, the SovietUnion broke up, and Emelina, who earned a distinction intheoretical physics at university, lost her job. The countryhad no more money to reach for the stars.Vera Emelina belongs to that generation of Russianswhose life plans were disrupted in the social upheavalof 20 years ago. “Everything changed with perestroika,”she says. “And mainly for the best.” Emelina tried to findher place in the new order, making ends meet by sellinginsurance in her hometown of Nizhny Novgorod. Shewasn’t put off by setbacks like the one with the bakery3839

privateRUSSIASPECIAL“Russian women can do everything,”says Vera Emelina, “even soften thehearts of the most prickly customers.Men are too undiplomatic and toounwilling to compromise.”(From left) Irina Petryankina, MarinaPogudina and Tatyana Pintchuk are herbest sales peopleIn Yaroslavl, on the other hand, Sergei Milykh (left) and Ilya Murachov holdtheir own against top seller Elena Balnikovaall pictures: Stern (where not indicated otherwise)Like his colleague Emelina in Nizhny Novgorod, it neveroccurred to Garin to leave his hometown for Moscow,although salaries in the capital are two to three timeshigher than in the provinces. The few times that he hasto travel to the head office for meetings are enough forhim, says the 44-year-old. Garin loves the Volga, thedream of every angler. His dacha is 70 kilometers outsidethe city. He chops logs for the woodburner and saunahimself. In the winter temperatures can easily fall belowminus 20 degrees – he goes ice bathing with his daughter.His three-year-old son is still too young for suchadventures.You could say that Garin has made it. It’s not surprisingthat he finds the new era liberating. In the past, livingstandards of most people used to be pretty similar; todaythere are massive differences. But Garin prefers a systemin which everyone can take control of his or her life. “It’snot a question of being rich,” he says. “Freedom is muchmore important – being able to determine your own lifeand to make use of the opportunities available to you.”The younger generation often has other ideas: “Some ofthem are very demanding,” Garin has noted. Potentialtrainees’ attitude of entitlement makes it difficult for himto find new staff. “The young ones want everything atonce, immediately.”Renaissance of faithVera Emelina, the managing director in Nizhny Novgorod,on the Volga 400 kilometers downstream, has fewerproblems with trainees. She recruits many of themdirectly from university, and the majority of her agentshave an academic degree. “Most young people stayhere,” she says. “We don’t have any worries about theup-and-coming generation.” The same applies to thepopulation in general. A renaissance of religious faithmeans that families are once again opting to have morechildren, says the mother of two boys and two girls. Sheadopted her youngest daughter from an orphanage.Emelina manages 14 branch offices with a total of1,200 agents, and she earns money where others have tofight for business. “Car insurance is our most profitablebusiness segment,” says the director, who also managesthe most successful branch office in the region – NizhnyAllianz Group Journal 3/2012Yevgeny GarinToday, 600,000 people live in Yaroslavl, situated 300 kilometers northeast of Moscow where the Kotorosl River meets the Volgaboss, who threw her out before she could barely puta foot in the door. “He’d recently been cheated by aninsurance company,” she relates. “Bad timing.” Todayhe’s one of her most loyal customers.Yevgeny Garin, head of the Allianz agency in Yaroslavlon the Volga 300 kilometers northeast of Moscow, alsochanged careers. After completing his studies, whichhe began under the Red Star, he found himself out ofwork. Like many others at the time he tried his luck as atraveling salesman. Garin bought and sold anything thatcould make money. It was good training: In 1996, after alean period of three years, he managed to land a job inthe sales department of a local brewery. Since 2007 hehas been managing the Rosno branch in Yaroslavl. TheAllianz logo is now emblazoned on the office building.Last year, he and his 25-strong staff in Yaroslavl andthe surrounding area collected 64 million roubles (EUR1.6 million) in premiums. Industrial insurance (energy,chemicals and transport) is the greatest contributor at27 million roubles. Yaroslavl, an old trading town with ahistory dating back one thousand years, is more than apopular tourist destination; it’s also an important locationfor industry. This year, Garin wants to increase premiumincome by ten million roubles.In cashAlthough companies transfer their insurance premiumsvia bank transfers, private customers tend to pay theiragents in cash. The agents take the money to the agencyat regular intervals, where it is held in a safe before beingtaken to a bank. It’s a complicated and inscrutableprocedure and a real headache for Allianz Russia’s CEOHakan Danielsson: “Such capital flows are difficult tomonitor.” He’s hoping that the increasing popularity ofthe internet will encourage more customers to switchto online banking in future. Garin will then be able toscrap his safe.4041

RUSSIASPECIALtop row: dpa / picture-allianceAllianz Group Journal 3/2012Novgorod. “That only works of course if you manage riskwisely,” she says. For instance, Emelina’s branch officeinsures the entire vehicle fleet of the regional administrationof Nizhny Novgorod – generating 18 millionroubles in premium income annually. There are fewclaims: If a public official is involved in an accident, it’salways the other party’s fault.UnlimitedAllianz is one of the insurers of the new ZenitStadium in St. Petersburg (left photo) and ofthe Olympic village in Sochiall pictures: Stern (where not indicated otherwise)The managing director is less happy with agriculturalinsurance. “It’s a very risky business which is hard tomake money from,” she says. “We pay out our entireincome in claims.” There was no let-up this year either:Along the Volga, in the southern Urals and westernSiberia ongoing drought was causing devastating cropfailure. In some places the area’s officials and farmerswere so desperate that they were calling on divine help:Orthodox priests held public masses, in which the entirecommunity prayed for rain.The Russian Agricultural Ministry is not expecting amiracle though. It has lowered its forecasts for wheatproduction to 80-85 million tons – ten to 15 million tonsless than in 2011.opportunitiesFor an industrial insurance company like Allianz GlobalCorporate & Specialty (AGCS), Russia should be somethingof a country of unlimited opportunities – theoreticallyspeaking at least. In practice, many obstacles are put inits way. One of them is the state’s considerable influenceon the economy. Moreover, many industrial sectors areringed off from foreign competition. Many major companiesalso use so-called captives to cover their risksinternally, which removes a large share of business fromthe insurance market. Others, such as Gazprom, dabblein the insurance market themselves.Another handicap is the Russians’ general unwillingnessto insure themselves against risks. This doesn’tjust apply to the man on the street; many companiesare also notoriously under-insured or not insured at all,says Willy Schaugg, regional manager of AGCS for Russia,formerly known as Allianz Russia. In April it was integratedinto Rosno, which has now assumed the nameAllianz Russia.“Imagine a company wanting to build a production plantin Vladivostok,” says the Swede. “One of our local representativesis available as a direct contact on site, andan Allianz expert from the USA flies over the next day toanalyze the specific risks for the company in question.”That would send a really strong signal to the market, saysDanielsson. No other company could come up with sucha combination of local presence and global know-how.Despite the ongoing obstacles, Werner Lellinger, untilApril CEO of the AGCS subsidiary Allianz Russia, sees realprogress: “The market is opening up more and more –not least because the financial stability of the insuranceindustry is becoming an issue for Russian companies aswell,” he says. “They appreciate Allianz’s high rating.”Allianz has insurance program agreements with around60 of the 150 biggest companies listed on the Russianstock exchange, including Sovcomflot, one of the world’sleading tanker companies, and the energy giantsGazprom, Lukoil and Rosneft.In the coming years, Russia will spend billions on expanding its railway networkand purchasing modern trains. The Sapsan, built by Siemens, currently only operatesbetween Moscow and St. Petersburg and between Moscow and Nizhny Novgorodprojects for the Winter Games in Sochi, including the icehockey arena and the Olympic Village.Monuments to Minin and Pocharski, the leaders of the 1611 uprisingagainst the Polish invasion, can be found here in Nizhny Novgorod, as isthe case in many other Russian citiesDespite a difficult start, AGCS in Russia was able to boostits turnover from USD 38 million to USD 100 millionbetween 2006 and 2011. And this wasn’t just the resultof cooperation with foreign businesses in Russia whichthe company insures, such as Toyota, VW and Siemens.Allianz is now also a sought-after partner in the Russianeconomy. After integrating the industrial insurance armAllianz Russia CEO Hakan Danielsson is hoping for evengreater penetration of the market.Schaugg and Lellinger are also expecting a boost fromthe major sporting events that will take place in Russiain the coming years: the World Summer Student Gamesin 2013, the Winter Olympics in 2014, the Ice HockeyWorld Championships in 2016 and the World Cup soccerchampionship in 2018. The Russian Ministry of Sport hasestimated that EUR 16 billion needs to be invested. Allianzis one of the companies underwriting the constructionof the New Zenit Stadium in St. Petersburg and also someBut the prospects for insurers go far beyond the investmentsneeded for these major sporting events. In thecoming years Russia will have to spend huge sums on itsailing infrastructure if it doesn’t want to fall behind othercountries. For the expansion and revamping of its railwaynetwork and the procurement of new trains alone, thegovernment plans to raise EUR 380 billion by 2030 – aneconomic stimulus package from which the insuranceindustry will surely also benefit.4243

RUSSIASPECIALdpa / picture-allianceSternAllianz Group Journal 3/2012Nicholas HallJack Frost inthe tankThere’s nothing like a Russian winter. “Even the best diesel freezesat minus 40 degrees,” says Nicholas Hall, head of Mondial Assistancein Moscow. For a company specializing in roadside assistance, it soundslike an advertisement. “Business is booming in winter,” he says.There’s a video clip in which a BBC reporter somewherein Siberia throws a pot of boiling hot coffee into the airwhich instantaneously turns to snow – a vivid demonstrationof what winter in Russia is really like, says NicholasHall. “At such extreme temperatures even our technicianssometimes have problems reaching a vehicle that hasbroken down,” reports the Brit – not to mention fixingthe car when they get there. “If you removed your glovesin these temperatures your fingers would drop off,” saysHall. That being the case, there’s only one option: towthe car to the workshop.In 2011, the call center at Mondial Assistance in Moscowreceived about 45,000 emergency breakdown calls, mostof them during the winter, when Jack Frost flexes hismuscles. The number of staff is then increased from theusual 75 to over 100. Many international carmakers suchas BMW, Mitsubishi, Volvo, Peugeot and Lamborghini relyon the services of the Allianz subsidiary, which launchedoperations in Russia in 2008. In the past year the companyhas widened its activities to Ukraine, Kazakhstanand Belarus.Currently, around 550,000 vehicles are insured withMondial Assistance against breakdowns due to frostdamaged batteries and other rigors that can occuron Russia’s roads. No insurer covers more cars. At themoment the roadside assistance service accounts formost of Mondial’s turnover, which reached EUR 5.5million last year – 75 percent up on the previous year.This year, turnover could hit the eight million euro mark,and if business continues to grow as planned, Hall says,that figure could reach EUR 15 to 17 million in three orfour years’ time.The market is dominated by Russian insurers, who oftenkeep newcomers at bay by with rock-bottom prices. However,people are beginning to recognize that dumpingprices do not equate with quality. “We purposely positionourselves as a company that, although not the cheapest,offers excellent service,” says Hall. “And it pays off.”In the area of roadside assistance Mondial AssistanceRussia, which will be renamed Allianz Global Assistancein October, cooperates with service companies in 110of the larger cities nationwide. Their range is limitedto a manageable radius though, since carmakers areunwilling to cover the cost of services in every corner ofthis vast country. So a tow back home could turn out tobe a pretty expensive proposition for anyone who breaksdown in the wilds of Kamchatka.On his trips to St. Petersburg, Irkutsk, Novosibirsk andSamara, Nicholas Hall has been able to get an impressionof just how big the country is. “The distances are completelydifferent to what we’re used to,” says the 55-yearold,whose family lives in the UK. He’s also warmed tohis current workplace in Moscow. “I feel safer in Moscowthan I do in London,” he says. “In London there are CCTVcameras all over the place. They’re useful but, in the worstcasescenario, you could be dead before anyone comesto your aid. Here in Moscow there are simply more policeon the street.”But feeling safe can be illusory. A case in point was thebomb attack in January 2011 carried out by terroristson the Domodedovo Moscow airport, indiscriminatelykilling 36 people: Russians, Kyrgyz, Tajiks, Uzbeks,Germans, British and Austrians. Over 150 people wereinjured. Two of Hall’s colleagues were in the vicinityat the time of the explosion. Fortunately, both escapedunscathed.4445

EuropeAllianz Group Journal 3/2012ShutterstockCompared to almost every other nation, Germans excel at protecting theirchildren from life’s perils: cycling helmets, safety socket covers, vaccinations –nothing is left to chance. Nevertheless, they’re still insufficiently preparedfor the worst-case scenario.FRANK STERNChallengingparenthoodWhat do parents with young children fear the most andwhat safeguards do they take? Earlier this year AllianzDeutschland and the magazine ELTERN (Parents) carriedout a representative survey to examine this very question.1,000 men and women in Germany whose first childwas under four years of age took part in the survey.The results: almost three quarters of the respondentsfeel that they are well insured, but only just over a third(35 percent) have taken out a life insurance policy toinsure family members in the case of death. 28 percenthave taken out occupational disability insurance.The situation is no better in terms of insurance policiesfor their offspring. Less than half take out any type ofinsurance policy for their child. Only 31 percent ofparents have child accident insurance and just twelvepercent have child disability insurance. The reason isnot usually insufficient funds. “Parents often suppressthe thought that their child could develop cancer orepilepsy,” says Allianz Deutschland board memberSeverin Moser. “They are ill-prepared for the worstcasescenario.”A parallel survey by Allianz Suisse revealed that Swissparents are better prepared in this respect. Not only arethey more optimistic than Germans about the future,they also take out more insurance policies for theirchildren. 82 percent of those questioned said that evenbefore the birth of their child they had researched thebest insurance cover. Only 62 percent of their northernneighbors had done likewise.Every year, about 1.67 million childrenare involved in accidents in Germany, more than537,000 of them at home or while taking partin leisure activities. That makes accidents the biggesthealth risk for children.(Source: Bundesarbeitsgemeinschaft Mehr Sicherheit für Kinder/Working Committee More Safety for Children)In terms of anxiety about unemployment, poverty andfalling on hard times, which the study also researched,Germans are ahead again, as they are with regard toconcern about their children. They warn them moreoften not to talk to strangers, use safety sockets anddrawer safety locks, install stair gates and keep their eyesglued on their children in the playground. The Swiss area bit more relaxed in this respect. Although what theymost dread is the death of their child or the involvementof their child in a serious accident, those fears are lesspronounced than in Germany. Only their concern abouttheir child being bullied is greater in Switzerland thanin Germany.Although this protective instinct is admirable, too muchprotection can hamper a child’s development, says childpsychiatrist Michael Schulte-Markwort, who posed thequestion in ELTERN: “How much protection does mychild need?” “Children should also have negative experiences,”says the head of the Child and Youth Psychiatryat Hamburg-Eppendorf University Hospital. Incidentssuch as a three-year-old falling off a swing or a ten-yearoldgetting lost in a strange part of town allow a child togrow, he says.And the Swiss didn’t just do the research – almost halfhave taken out child accident insurance, and one infive has a child disability policy. Overall, the Swiss alsospend more on safeguarding themselves and theirfamily. Whereas Germans spend an average of EUR 113on insurance policies, that figure is almost EUR 280 inSwitzerland.There are already signs that children and teenagershave significantly poorer motor skills than was the case30 years ago – a consequence of being over-protected,says Schulte-Markwort.WWW.KINDERSICHERHEIT.DE“Although this protective instinct is admirable,too much protection can hamper a child’s development.”Prof. Michael Schulte-Markwort4647

EUROPEall pictures: WKP / Dan PearlmanAllianz Group Journal 3/2012Some companies build colossal glass palaces as a symbol oftheir stature and status. Allianz is siting its new conferencecenter in the basement.FRANK STERNUndergroundencountersAllianz is one of the biggest financial service providers inthe world, yet until now it has been unable to provide anappropriate meeting place at its Head Office in Munich.To fill that gap construction began last May on a buildingclose to the English Garden in the heart of the Bavariancapital – and for the most part it’s underground.The building will have very little impact on the externalappearance of the company’s listed Head Office, whichwas opened in 1954 in the presence of ChancellorKonrad Adenauer. Construction teams are building astate-of-the-art underground conference room for upto 300 people. Designed by the Munich architectsWeickenmeier, Kunz + Partner and the Berlin brandarchitecture agency dan pearlman, the Allianz Auditoriumis scheduled to open in fall next year.The building – with a price tag in the lower double-digitmillion range – will radiate a sense of openness andlightness to stimulate the creative exchange of ideasboth within and beyond the Allianz community. Thissounds very ambitious for a building below groundlevel, yet the design of the conference center is originaland spacious; it’s not at all heavy or gloomy. Like theunassuming external appearance, the interior designhas no sumptuous quality about it. It will be a timeless,top-quality building with state of the art equipmentwithout being lavish or overly grand.use, serving as a standing reception area or an informalsetting for working groups to exchange ideas. To the rearis a terrace with a view of the English Garden.A series of rooms will be built on the first floor, whilethe auditorium itself will accommodate larger eventssuch as the Allianz International (AZI), the annual meetingof the international top management. Designed asa semi-cylinder with hub podiums, the room can bequickly converted into an amphitheater-like space.Movable partitions will be used to adapt the size of theroom to the number of participants. The auditoriumwill also be equipped with the latest digital technologyso that participants will be able to communicate withthe Allianz world via video conferences and live links.The new conference center is user-friendly and hasdisability access. Planned as a community building, itfeatures an original and inspirational design and will alsobe open to the public. The new design permits a flexibleapproach to requirements, whether for super-visoryBoard meetings for 30 people, major conferences,analyst meetings, press conferences, podium discussions,career days, art exhibitions or public viewing events suchas the broadcasting of Allianz Sports.Allianz goes underground in fall 2013.As mentioned, nothing will change on the outside: thelisted building and landscape conservation conditionspreclude alterations to the building complex and theadjacent park. However, C-Building, a wing that is slightlyset back from the rest of the complex and that housedthe Punchcard Department in the 1950s and later thePress Office, will be given a completely new function,serving in the future as a foyer and entrance to theauditorium. It will also give employees and visitors roomto meet and greet each other and will be flexible in its4849

EUROPEAllianz Group Journal 3/2012Big wheels, smallmarketTitan ItaliaTitan Italia is Europe’s market leader in the manufacturing ofwheels for agricultural machines, tractors, combine harvestersand irrigation systems. The company has over 500 employeesat its production sites in Crespellano (Bologna), Finale Emilia(Modena) and Jesi (Ancona). Titan Italia is a subsidiary of TitanEurope, which is well known for the design, manufacture anddistribution of wheels and undercarriage components for trackedand wheeled off-road vehicles. The Group is represented internationallyby sites in the UK, Italy, France, Germany, Spain, Turkey,South Africa, the USA, Brazil, Chile, Peru, Australia, Indonesia,China and Japan.left: dpa / picture-alliance | right: CiullaWWW.TITANEUROPE.COMTitan Italia SpA is a leading manufacturer of wheels fortractors and other agricultural machines. Its north Italianproduction site in Finale Emilia was badly damaged by twoearthquakes in MayEarthquakes in ItalyIn May, two earthquakes in the northernItalian region of Emilia Romagna claimed26 lives, injured 400 and made 15,000 homeless.Many historic buildings and churcheswere reduced to rubble, and some smallertowns had to be evacuated. The area hitby the earthquakes is highly industrialized.Many biomedical companies are based inEmilia Romagna, where numerous warehousesand production sites collapsed orwere badly damaged. Many of the victimsdied at their workplace, prompting questionsabout the safety of the industrial facilities,some of which were new.There were no victims among Allianz Italyemployees and agents, but a number ofagencies in the earthquake zone wereaffected, and some were rendered temporarilyinaccessible. Allianz provided trailerhomes as temporary offices so that agentscould resume their work and assist local customers.Payment deadlines for outstandingautomotive and P&C insurance premiumswere also extended in the affected region.Allianz Italy launched a donation campaignto help the victims of the disaster.EUR 66,000 was collected, a sum that wasthen doubled by the company. The moneywas donated to the Italian Red Cross.In addition Gian Marco Diani from AllianzInvestment Management in Milan organizedan initiative to support Parmesan cheesemanufacturers. Many wheels of the famouscheese were severely damaged by thequake and couldn’t be brought to market.Diani fetched nearly 300 kg of the cheesefrom Piacenza and sold it to colleaguespiece by piece – even abroad.WWW.ALLIANZ.ITdpa / picture-allianceIn May this year, two severe earthquakes shook the region of EmiliaRomagna in northern Italy. A factory belonging to Titan Italia, themarket leader in tractor wheels, was also affected. Production washalted for weeks. Joachim Hufenreuter, a claims adjuster at AllianzGlobal Corporate & Specialty, was on site.HEIDI POLKEOne, two, three wheel rims, each about a meter indiameter, lie on the ground – a rather meager output,as normally 2,000 units roll off the line every day.But production manager Massimo Columbini isinordinately pleased. The three wheel rims, whichwere manufactured in a test run, have passedquality control, so the two high-precision productionrobots must have escaped damage from the earthquakes.That’s a good sign, because production is dueto resume soon.5051

EUROPEboth pictures: dpa / picture-allianceAllianz Group Journal 3/2012Italy’s heart of gastronomyThe entire northeast of the Mediterranean from Italyto Turkey – where the African and Eurasian tectonic platesmeet – is at high risk from earthquakesVeronaPaduaVeneziaThe products of Emilia Romagna are the quintessence of italianitá and are thecountry’s export hits: Parmesan und Grana Padano are produced in the fertile lowlandsnorth of the Apennines, as is Parma ham, balsamic vinegar and Lambruscowine. According to the Coldiretti Farmers’ Association, the quakes caused EUR 500million worth of damage.Some 300,000 wheels of Parmesan cheese were destroyed, a tenth of the annualproduction output. The towering racks on which cheese wheels weighing up to40 kilos apiece are left to mature, had toppled over. Many vinegar factories werealso damaged, and countless barrels of balsamic vinegar, sometimes many yearsold, ruptured.Besides agriculture, industry also suffered losses. The Po Valley is home to manycarmakers and suppliers, and the region is aptly nicknamed “car country”. Factoriesand warehouses were particularly hard hit, since earthquake-proof building codesonly came into force in the region in 2003. Private dwellings on the other handfared better. The Italian Insurance Industry Organization (ANIA) estimatesinsured losses of EUR 700 to 800 million.ParmaFinale EmiliaADRIATIC SEAModenaITALYBolognaRavenna40 kmSource: USGSThe machinery in Titan Italia’s factory in Finale Emiliawas idle for almost six weeks. The company is Europe’sleading supplier of wheels for tractors and agriculturalmachines. The epicenters of both earthquakes, whichstruck the province of Emilia Romagna in May and registereda magnitude of 6.0 and 5.9 on the Richter scale,were not far from Finale Emilia.After the second quake on May 29, the authorities prohibitedaccess to the facility for safety reasons. Parts ofthe roof had caved in and many supporting pillars weredamaged. The risk of the building collapsing on the250 employees was too great. None of the workers wereinjured in the quake, but the emotional strain was huge –particularly during the aftershocks, which occurred at arate of up to 60 a day. Many slept in their cars or in tents,either because they were too frightened to return homeor because their houses had been destroyed.The earthquakes in Emilia Romagna came as no surpriseto seismologists; tremors are often felt in Italy. However,the area around Modena is thought to be less at risk.“Of course we were shocked,” says Maria Cecilia la Manna,managing director of Titan Italia. “But we got to workimmediately and did everything in our power to resumeproduction as quickly as possible.”By early July the factory was safe enough for JoachimHufenreuter, a claims adjuster at Allianz Global Corporate &Specialty (AGCS), to get an impression of the situation.Hufenreuter inspects major industrial damage all overthe world and is often faced with the aftermath of naturaldisasters. He knows that after an earthquake “the firstthing you do is to stabilize the building temporarily; thenthe actual repairs can begin.”It will cost in the double-digit of millions to repair thebuilding and machines. But Titan’s management ismore worried about production downtime. The factoryin Finale Emilia is the centerpiece of a cluster of threeproduction sites: it is the sole producer of rims, on whichdisks are welded and tires fitted in the neighboring productionsites of Crespellano and Jesi. “Big wheels makeup a small market. Our competitors are already lyingin wait,” explains Gary Chesteron, CFO of Titan Europe.“That’s why we’re doing everything we can to keep ourcustomers supplied, no matter what the cost.”A working group devised a raft of measures to limitproduction downtime. Some sections of the productline for wheel rims were moved to the other two sitesalong with the employees, who worked round the clockin three shifts. Titan subsidiaries in Turkey and Francealso stepped into the breach to supply wheel rims. Thetraditional factory vacation in August was canceled.But there were still production gaps, and Titan wasforced to buy in some rims from other manufacturers.“Not all companies work so quickly, professionally andproactively after suffering damage,” says Hufenreuter.Only some of the consequential damage – from lostearnings, for instance, or extra expenses from purchasingreplacements and loss of customers – canbe covered by insurance, Hufenreuter says. On top ofthat, lost market share can weaken a company overthe long term. “So active damage limitation is beneficialto both sides,” Hufenreuter remarks, “the insurer andthe company.”WWW.AGCS.ALLIANZ.COM5253

EUROPEall pictures: Allianz UKAllianz Group Journal 3/2012Team AllianzThe 2012 Olympics in London were a big success with billionsof people around the world watching the Games. At Allianz UKpeople had another reason to be excited, they had their ownsquad competing: Team Allianz.DAVID KEELAaron Cook, first in the world rankings for taekwondo, was one of the top athletes in Team AllianzAndy Turner, European champion in the 110-meter hurdles, reached the Olympic semifinalsAt the heart of Team Allianz were eleven Olympic andParalympic athletes representing the sporting disciplinesof Athletics, Swimming, Cycling, Eventing, Rowing, Triathlonand Taekwondo. The team included stars of the past,present and future, led by two Olympic medallists andTV presenters Steve Cram and Sharron Davies alongsideRebecca Romero, the only British athlete to win Olympicmedals at two different sports.Over the course of the two year Team Allianz program,Allianz employees and business partners could followthe athletes’ journeys from training to qualifying forLondon 2012. The first stage was to introduce the membersof Team Allianz through a series of videos profilesand an Intranet site and broker microsite incorporatingblogs and news stories. To bring the films to life, Allianzemployees were featured interviewing the athletes togain insight into how they achieve high performanceand what drives them to keep improving.The quality and messaging of the videos was recognizedwhen the program was a finalist at the 2011 CannesLions Awards for Creative Communication. To bring theprogram closer to the employees, the Team Allianz LiveExperience was created and toured around the UK.Visiting over 20 Allianz office locations, the Live Experiencefeatured a “Team Bus” with a range of activitieson board to engage and entertain visitors.Having registered online, Allianz employees spent anhour on the bus, split into teams to take on challengesthat included a handbike to test strength and stamina, aBatak machine to test reflexes and peripheral vision, anda quiz to exercise their “gray matter”. Team scores wererecorded electronically and published online along withphotographs including “green screen” shots of employeeswith the athletes.To maximize the impact of the Team Bus visit, the localoffices arranged events to give employees the chance5455

EUROPEall pictures: Allianz UKAllianz Group Journal 3/2012to socialize and compete, involving our business partnerswhere possible. The Team Allianz Live Experience alsoachieved external recognition winning the 2011 EventiaAward for Best Teambuilding Event. All locations also hadthe opportunity to meet the athletes with personal appearancesaround the branch network. These visits wereinformal with the athletes walking around the offices,signing autographs, having their photos taken, holdingQuestion and Answer sessions and joining in with theTeam Bus activities. The 2011 program was rounded offwith the release of a series of videos. In their own wordsand drawing on their own experience, the athletes toldtheir high performance stories to inspire the audience.The high performance theme for Team Allianz continuedinto 2012. In March, 100 employees nominated by theirDivisional Head were invited to attend the High Performers’Lunch held at a five-star London hotel. The Team Allianzathletes were also there and were interviewed fromthe stage about their hopes and fears for the Olympicsand Paralympics. A prize draw was made with employeeswinning hospitality tickets for the Games.Rebecca Romero won Silver at the 2004 Olympics in the quadruple sculls, and four yearslater took Gold in the 3,000-meter individual pursuit. Left: The Olympic gold medalists AlistairBrownlee (Triathlon) and Andrew Triggs Hodge (Coxless Four)One of the most popular elements of the program was aseries of Masterclasses, which allowed promising Allianzsportsmen and women to train with these elite athletes.The Masterclasses covered Eventing, Swimming, Cyclingand Athletics, with more planned for the rest of theyear. The Team Allianz athletes also attended variousconferences and exhibitions giving talks on the themeof high performance and meeting our people and ourcustomers. One of the highlights was a series of highimpactdemonstrations by Taekwondo World NumberOne Aaron Cook. Unfortunately, Aaron was one of theathletes who did not make selection. The other, sprinterJodie Williams, suffered an injury before the Games in acompetition in Birmingham.Four Team Allianz athletes made it to the OlympicGames and delivered two Gold medals and one Silverbetween them. Equestrian star William Fox-Pitt wonTeam Allianz’s first medal – Silver in the Eventing Teamcompetition, quickly followed by a Gold for Andy Hodgein the Men’s Four Rowing. The highlight was probablyAlistair Brownlee winning the Triathlon in commandingfashion, having suffered a severe injury earlier inthe year. High performance in action! Two Team Allianzathletes were competing in the Paralympics. Wheelchairracer David Weir and swimmer Ellie Simmonds, bothchampions from the Beijing Paralympics, competed inmultiple events.WWW.TEAMALLIANZ.CO.UKUSERNAME: TEAMALLIANZ → PASSWORD: GOLDMEDAL5657

The AmericasAllianz Group Journal 3/2012Business trip withobstaclesSternThe customer is king? Well, only if you’re lucky. Nancy Jones,Chief Marketing Officer at Allianz Life in Minneapolis reports onsome of her most memorable customer experiences.NANCY JONESThe travel industry is a tough business, especiallynowadays in the internet era. Often it’sthe butt of jokes and trashed in social media.Remember the YouTube video “UnitedBreaks Guitars”? It currently has nearlytwelve million views. While entertaining forthose of us not working for United, can youimagine the impact on United’s reputation.So, what’s that got to do with USD 250?For me … 2 business trips – both involvingcar companies: one a taxi company, one arental car company. Let’s start with the taxiexperience. I took Airport Taxi – my usualcompany – on a recent trip to the Minneapolisairport. On this trip, my carry-on bag wasleft in my condo building’s driveway insteadof being put in the trunk of the cab. After amoment of panic (think about the valuablesyou have in a carry on), I called Airport Taxi.They arranged for another cab driver toget the bag and bring it to the airport. Theyrequested I pay the cab driver, and the managerwould call me to reimburse me whenI got back.5859

THEAMERICASAsiaSternAllianz Group Journal 3/2012privateNancy JonesThe good news was I got my bag, eventhough it had been run over by a car (butthat’s another story). I barely made my flight,so I was a bit stressed out. (Okay, I was acrazy lady arriving on a plane just as thedoors closed with grease and oil on myhands from the run-over suitcase.) Ofcourse, no phone call from Airport Taxi.Since I never heard about the reimbursement,I called Airport Taxi myself. First, I wastransferred to “Customer Care” manager#1. Voicemail. No return call. I called again.Voicemail. And again. Transferred to “CustomerCare” manager #2. Voice Mail. Calledagain – and again. Maybe they should becalled “I don’t Customer Care” managers.On about my sixth call, I reached a delightfulcustomer service rep. She said they’dreimburse both cab fares and replace mydamaged suitcase. All in, this would costthem about USD 250. Shortly after thatdiscussion, I received a voicemail from “CustomerCare” manager #1 complaining thatit wasn’t his responsibility to call me backbecause he’d transferred my call to manager#2. Then, several days later, “Customer Care”manager #2 called to say they would notreimburse me and that I should have boughttrip insurance (for a routine cab ride – really?).After asking if they record their callsand letting him know that two of their agentssaid they would pay, he said he was goingto fire them.I took a drastic action – I shared the storywith everyone I knew through social media.I do not use Airport Taxi, ever. From myperspective, they lied and treated theiremployees poorly for doing the right thing.Now, what’s the real value of AirportTaxi’s USD 250?But I also can tell another story of USD 250gone right. I was traveling with three of mycolleagues. I rented the car from Hertz.We had the car for about six hours. Whenwe returned it, the bill was almost USD 350.I paid it. But, as we were walking through theHertz parking lot, we were commenting onthe ridiculous amount of money, “perhapswe should have had a Lamborghini for thatprice.” Two Hertz employees overheard usand simultaneously converged on us. Theygrabbed the bill and the next thing we knewwe had a new bill for USD 100.I always book with Hertz. I tell everyoneI know this story. I sent a comment cardabout the employees to Hertz. I received alovely note thanking me for my feedback.The note did not threaten to fire the employeesfor making a USD 250 decision. Instead,these employees were praised with kudossent to their manager. So, what’s the realvalue of Hertz’s USD 250?A positive story is a short one to tell – but anegative one spreads quickly. Notice howmuch shorter a positive story is to tell. It’s soeasy to tell thousands of people somethingnegative – whether it is through an articlelike this, Facebook, LinkedIn, or other socialmedia. What’s USD 250 worth? Airport Taxilost a loyal, frequent traveller – who spendsway more than USD 250 in a year. Hertzgained a loyal customer. So what’s the valueof customer loyalty and stories that damageor enhance reputation? It’s hard to quantify,but you can imagine in both cases it’s worththousands of dollars.NANCY.JONES@ALLIANZLIFE.COMWWW.YOUTUBE.COM/WATCH?V=5YGC4ZOQOZOWhile Europe is in turmoil over the financial crisis,Asian countries are showing remarkable resilienceagainst repercussions on their economies.Allianz companies in Asia Pacific have to deal witha different set of challenges. We talked to DavidFried who took the helm of Allianz Asia Pacific lastFebruary about business obstacles in general andabout China in particular.FRANK STERNRemarkable resilienceMr. Fried, after 27 years at HSBC youmoved to Allianz at a precarious momentin time. The markets are more volatilethan ever, Allianz had to gobble up aseries of natural catastrophes, and insome Asian countries business is hamperedby restricting regulations. Howare you going to write a success story inthis kind of environment?David FriedThe reason why I joined Allianz had a lotto do with my perception of how strongAllianz’s brand is and how great a partnerit had been to myself and my colleaguesat HSBC. I saw that there was a greatopportunity for Allianz to grow and becomea stronger leader in Asia than it had beenup to now. Yes, I did enter at a precarioustime, but one of the things that I always feltwas that Allianz was one of the strongest6061

ASIAAllianz Group Journal 3/2012SOUTHKOREAJAPANCHINAPAKISTANINDIALAOSTHAILANDTAIWANSternPHILIPPINESThe Art Science Museum in SingaporeSRI LANKAMALAYSIASINGAPOREINDONESIAinsurers globally and they continued toprove that through the most recent periodof volatility.Regarding catastrophes, that’s actually whatwe are here for, isn’t it? When customers buyan insurance policy from us they are buyinga promise that we will be there when a claimarises. One of the things I have been ableto see in action is the commitment by ourcolleagues on the ground after the floodshit Thailand, to go out in the most difficultsituations, to inspect our customers’ claimsand to ensure that they are suitably paid.What I have seen in action is a companyreally showing its capabilities in precarioustimes. That’s a lot of what attracted me toit in the first place. I do believe that if wecontinue operating together through all thedifferent businesses that we have in Asiato develop a common strategy and a commonvoice, and to link the strength of ourglobal lines like Euler Hermes, Allianz GlobalAssistance or Allianz Global Corporate &Specialty, then Allianz can write a successstory for the future.Allianz started its Asian journey morethan 20 years ago. But the results haven’tbeen too impressive so far.A lot of people talk as if Asia were one country,whereas actually there is no one Asia. Asiais very different with a number of distinctcountries. I always tried to categorize them asemerging ASEAN countries, developed stateslike Japan, Korea and Taiwan, the developingcity states like Hong Kong and Singapore andthe future giants China and India.In the emerging ASEAN countries we currentlyhave some very strong businesseswith increasing market share. It’s true, theyhave been sailing troubled waters in recenttimes, especially on the P&C side in Indonesia,Thailand and India ranging from changesin regulation to floods. But they are stillbusinesses that remain strong in growthmarkets.If we take China then we are talking aboutprobably the most challenging market inAsia. Allianz has never been able to reallymake a dent and be successful in China.But neither have any other foreign insurers.So the question is, will we be able to comeup with a strategy that will lead us to successin China in the future.What could this strategy look like?This could be everything from restructuringthe businesses that we have to putting newleadership structures into place and evenperhaps developing new partnerships.When I joined Allianz I was told that mynumber one priority was China. There areother areas where we have to get our acttogether, like trying to offload some risksin order to free-up capital for better use forgrowth as opposed to managing problemsthat come from the past. But China will beour main target for the near future.Some experts say China is an unfairmarket for non-Chinese companies.I think it is an uneven playing field. Anyjoint venture that is established as a foreigncompany is unable to expand its footprintsand develop in China the way it can in othercountries. In a place like India, when you getyour license you can work North to South,East to West without any restrictions. InChina you have to go from city to city. Andtypically you won’t be granted more thanone license a year. Domestic companies,meanwhile, do not have these restrictions.The regulations also force you to establishfull-blown operations in new cities, whichis not cost-effective. It’s very difficult forcompanies to make a profit under thesecircumstances.And then you’re challenged by the fact thatthe local leaders in the industry, whetherit’s China Life, PICC or Ping An have half amillion to a million agents. They also havebank distribution relationships, and somehave very strong telemarketing capabilities.They have the critical mass and the capabilityto expand very quickly. Things like thiscontinue to hamper all of the foreign playersin their push to try and reach this criticalmass and profitability. And that includes us.What do you expect from the openingof the motor market announced bythe Chinese government in May?I would say it is a positive sign but thatdoesn’t mean an enormous amount toour product offerings. We have in the pastalready been able to offer Motor Third PartyLiability in partnership with Taiping Insurance.Now all we are doing is bringing thatin-house. It is not something that will reallychange the business and take to a newlevel. We still have the same restrictionswhich start with the fact that we have to belicensed first and foremost in order to beable to transact this business.Is there a segment where Allianz ismaking money in China at the moment?Not really. In the past, we have been challengedfor profitability first because of theinvestment that we need to make in thedevelopment of our businesses and secondlybecause of the need to grow the distributionchannels so that we can reach critical mass tooffset the distribution costs. At the moment,we’re developing an operating model wherethe life and non-life companies have cross-6263

ASIASocietyAllianz Group Journal 3/2012David FriedDavid Fried (50) has been working in the insurance industry for the last27 years. Prior to joining Allianz Asia Pacific in Singapore, the American wasGroup General Manager and Group Head of Insurance for HSBC Holdings plc,based in Hong Kong. In this role, he was responsible for insurance andretirement businesses in 54 countries. During his time at HSBC, he managedlife and non-life underwriting, reinsurance, broking, agency, and captivemanagement businesses in Asia, the Americas, United Kingdom andMiddle East. Fried is married with two children.sale licenses. But we will be challengedfor quite some time from a profitability perspectivebecause of the need to invest inthis growth for the future and in order tomeet the demands of local regulation.What’s the impact of the financial crisisin Europe on Asian economies? Will Asiacome out stronger and Europe weakeronce the crisis is over?Despite the crisis in Europe the Asian economieshave continued to grow outside of Japan.If you look at the ASEAN countries, their GDPgrowth is going to be over five percent thisyear. China is slowing down but expertsstill forecast eight percent growth in 2012.India is slowing down too but it will havesomewhere between six and seven percentgrowth this year. These are still significantgrowth rates, which allow for a growth of amiddle class and the development of socialchange initiatives by governments in orderto promote greater savings and greaterretirement awareness of aging populations.Although the European financial crisis hashad an impact on Asia, the Asian economieshave continued to be resilient. A lot of thatis due to the fact that inter-Asian trade hasgrown significantly over the last five years.Previously, the largest trade partners forthe Asian countries were Europe and theUS. Today, inter-Asian trade is higher thanit is between Asia and Europe or the US.So therefore what you find is that the Asianeconomies have learned to work closer witheach other in order to actually continue todevelop and to dampen the impact of theEuropean crisis.To tap into that market further you wouldprobably need to extend the sales network.Which distribution channel couldbe the most promising?We follow a multi-channel strategy but oneof our current goals is to strengthen the bancassurancesector. It could become a cornerstonefor us especially in the distribution ofwealth products and life insurance products.I think this could allow us to leverage thebanks’ networks and customer base for futuregrowth for our Asian operations. And it willhelp to punch our weight in Asia, which in myview Allianz hasn’t done enough in the past.What do you mean?Allianz is the largest insurer in the world, byrevenue or by operating profits. And it is theonly AA-rated insurer in the world. So Allianzhas a position of strength worldwide that itdoes not possess here in Asia. In Asia,we have only one business, which is ourMalaysian non-life company that has anumber one market position with morethan ten percent market share. Our typicalcompany is rather somewhere betweennumber six and number ten in the market,with between three and five percentmarket share.What do you want to do about it?I would like to see that we become theleading multinational in markets that weoperate in and that we have businesses thatare playing more in the top five. This willtake investment in distribution and this willtake investment perhaps in organic growth.But my goal would be that Allianz wouldactually become viewed as one of the leadersin Asia Pacific. By customers and investors.WWW.ALLIANZ.COM.SGShutterstockPotential lifesaverShips navigate unerringly across the wide ocean, planes land automatically with pinpointprecision in poor visibility. These feats would be inconceivable without GPS. But the GlobalPositioning System can do much more: Allianz OrtungsServices GmbH uses it to savelives. Emergency location is just one of a whole raft of potential applications.FRANK STERNHelp from outer space – the positioningsystem of Allianz Ortungs-ServiceIf Wendong Wang had not had his cell phone with himin October 2010, it would have been touch and go forhim. The 38-year-old collapsed following a severe strokeand only just managed to call the emergency number112. But he was unable to provide his exact locationsince he spoke neither German nor English. Nevertheless,the control room of the Düsseldorf Fire Departmentwas able to swiftly locate him via the platform of theAllianz OrtungsServices (AOS). Within a few minutes6465

SOCIETYAllianz Group Journal 3/2012RothTobias FritschIt is also possible to compile a digital emergency filecontaining medical data as well as information on existinghealth risks, allergies and current medication, whichis then sent directly to the emergency control center ifnecessary. This ensures the best possible first responseright from the outset. Customers themselves decidewhich data should be made available in the case of anemergency.© 2011, Scott Adams, Inc./Distr. Universal Uclick/Distr. Bullsan emergency team arrived at the scene, and Wendongwas whisked off to hospital.Since 2006, AOS has been operating a cell-phonelocation platform, initially using LBS (Location BasedServices). However, that system has the drawback thatit can only pick up a signal in the general area fromwhich an emergency call is made. In rural regions inparticular, where the base stations are sometimesspaced far apart, this method is often not accurateenough. With net-independent globally accessible GPStechnology on the other hand, locations can be pinpointedto within almost one meter. In an emergencythis could mean the difference between life and death.Of course, in order to be located promptly you wouldhave to have a GPS-enabled cell phone equipped witha special application developed by AOS. “In an emergencyyour GPS coordinates can be relayed via satelliteto an emergency control center from our free Help app,”explains AOS manager Tobias Fritsch. Some 10,000 usersin Germany now have the potential lifesaver app.The AOS location finder, which is used by 95 percentof all emergency call centers in Germany isn’t the onlyapplication. A runaway horse, a missing mountainclimber or a lost granny – they can all be quickly foundwith AOS.The emergency file can also be combined with the eCallSystem in modern vehicles to automatically alert thenearest emergency center in the event of an accident.This system relays information on the time, location andseverity of the accident as well as the vehicle occupants’medical data. “The system’s potential has yet to befully exploited,” says Fritsch. “We’ve got the IT platform,the network and the expertise, which we can pass onto other Allianz companies. They just have to seize theopportunity.”You could have an app for instance that reminds Allianzprivate health insurance customers by text messageabout travel insurance when they go abroad. A policycould be taken out at the touch of a button. The servicesoffered by Allianz Global Assistance or Allianz GlobalAutomotive could be expanded with the AOS systemtoo. “It could help us keep our competitive edge,” saysFritsch.All this can be done while safeguarding data security.“Data protection is our number one priority,” the AOSboss says. “The service is well protected against attacksfrom outside. In an emergency only the call centershave access to the platform, and every location findingis systematically stored to rule out abuse.” So keepingtrack of an unfaithful husband with the AOS tool wouldnot be possible because he would first have to give hisconsent. Rather unlikely.Readers’ ForumIf you liked or even disliked any items in the Journal, wewould like to hear from you. Your feedback will help us toimprove our content, so all comments and suggestions forimprovement are welcome. Please send to:journal@allianz.comAllianz Journal, Königinstr. 28, D-80802 MunichGroup Intranet (GIN) → Allianz key information → JournalEnergy giant RWE and the German Automobile Club arenow using the AOS emergency system – the former totrack their repair specialists as quickly as possible in theevent of a power-line breakdown, the latter to offer theirmembers an additional safety service.WWW.ALLIANZ-ORTUNG.DEDeadline for submissions for the Allianz Journal 4/2012is Oktober 20, 2012.HTTP://KNOWLEDGE.ALLIANZ.COMFrom there, readers can also upload the Allianz Journal to theiriPads and iPhones. Simply e-mail the screen version of the PDF fileto these devices and the magazine is available offline at all times.6667

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