Allianz to write more outwards reinsurance from captive re unit

Allianz is planning to take in excess of €400 million in operating profits from its reinsurance operations annually, with its hope for growth pinned on its offer of structured reinsurance for third party clients.

The unit's operating profit target should be hit in 2024 and proceed “with limited volatility,” management said in a presentation to investors that was hosted in London on November 24.

Allianz leverages its reinsurance arm for capital optimisation and captive reinsurance, then tacks on operating profit by writing some reinsurance for third party clients where growth has been charged up in recent years.

Captive operations for capital and reinsurance optimisation represent some two-thirds of the unit's (non-consolidated) revenues in recent years. Of that, currently over 40% is group capital management.

Beyond capital management, from which Allianz claims to have secured a 10-year cash benefit of €9 billion, captive reinsurance is 16% nat cat, 13% credit & bond, 9% liability, 8% L/H, 6% motor and 5% non-cat property.

Reinsurance for third-party clients contributes just over 1/3 of segment revenues. Growth has accelerated following what management calls a “reinforcement” of the third-party outwards reinsurance operations in 2021: attributable revenues grew some 37% y/y in 2022.

Structured reinsurance solutions for those third-party clients is tagged as the pending growth driver for the unit.

Allianz’s management said that the external offer is a bit more opportunistic. Allianz claims 46% of the 2022 book was “transactional P&C” and 1/3 traditional with as little as 4% in nat cat.