allianz: a story about change and transformation · pdf fileoverview • allianz group...
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Allianz: A Story About Change and Transformation
Anja Christl, Global Reward & Performance, Allianz SEOliver Freigang, Managing Director, EWM Global
Overview
• Allianz Group• What was Allianz looking for• Current and Future landscape• Why is Allianz unique• Is Allianz really unique or just a more customized implementation
Allianz Group
As Allianz we are…
All figures as per December 31, 2016Rankings insurance business based on revenues; asset management based on assets under management; sources: company reports
a company with over 140,000
employees
trusted partner for more than86 million
customers
among the top 3Property and Casualty insurers globally
among the top 5asset managers globally
Europe’s largest insurer based on market value
in business forover 125 years
global leader in travel insurance, assistance services, and credit insurance
gold rated in the Dow Jones Sustainability Index
among the top 5 in the Life/Health business globally
present in over 70 countries
… Allianz is the leading specialist in space insurance and celebrated its 100th birthday as aviation insurer in 2015
We are much more than just an insurerDid you know that … ?
… the Allianz Center for Technologyhas conducted thousands of crash tests since 1980 to improve road safety
… Allianz insures major Hollywood and Bollywood movies including all 24 James Bond productions
… Allianz offers financial solutions to over 50 million low-income people in Africa, Asia and Latin America
… Allianz was one of the insurers of the Titanic
…Allianz offers a wide range of “green” solutions
… Allianz insured the last three buildings to hold the title of “world’s tallest”: Petronas Towers, Taipei 101, Burj Khalifa
All figures as per December 31, 2016
… Allianz offers drone insurance products for private and commercial operators, manufacturers, repairers, flight schools and training facilities.
We are also one of the largest institutional investors
Did you know that … ?
… Allianz invests around € 650bn for its insurance customers. That is roughly the same amount as the Swiss economy generated in an average year
… Allianz owns 5 gas transportation grids in Europe
… Allianz owns 74 wind and 7 solar parks and they generate enough renewable energy to supply a city the size of central Paris
… Allianz invested in the largest contemporary real estatedevelopment project in the US - Ten Hudson Yards
All figures as per December 31, 2016
… Allianz invested in Kenya's Tsavo National Park to combat ruthless deforestation
… Allianz owns a vineyard in Tuscany, producing the famous San Felice wine
We aim to attract, retain and nurture talent
37 %of management employees are female
21,863 new employees were hired in 2016
71 %of our employees participated in a continuing education program in 2016
690 €on average was invested in continuing education programs per employee in 2016
40.6is the average age of an Allianz employee
72 %is our score in the Employee Engagement Index (EEI)
All figures as per December 31, 2016
Strong performance in a challenging year
1) Proposal 2) Excluding unrealized gains/losses on bonds, net of shadow accounting
Brexit vote
Marketvolatility
Ultra-lowrates
Italianreferendum
RegulationPolitical
tensions
…
Difficult environment Strong performance
Earnings per share
EUR 15.1 (+4.0%)
Solvency II capitalization
218%
Operating profit
EUR 10.8bnnear upper end of target range
Dividend per share1
EUR 7.60 (+4.1%)
Shareholders’ net income
EUR 6.9bn (+4.0%)
RoE2
12.0%
1. Allianz 9.5
2. AIG 7.2
3. AXA 6.3
4. Generali 4.2
5. Ping An 3.9
6. Prudential 3.5
7. Zurich 3.2
8. ACE 2.3
1. Allianz 10.1
2. AXA 7.3
3. AIG 6.8
4. Ping An 5.5
5. Generali 4.2
6. Zurich 3.4
7. ACE 3.1
8. Prudential 2.0
1. Allianz 10.4
2. AIG 7.9
3. Ping An 7.6
4. AXA 7.5
5. Zurich 4.9
6. Generali 4.5
7. Prudential 3.2
8. ACE 2.9
1. Ping An 13.5
2. Allianz 10.7
3. AXA 8.2
4. Chubb2 5.6
5. Generali 4.8
6. Prudential 4.5
7. Zurich 4.4
8. AIG 3.0
1. Ping An 11.2
2. Allianz 8.0
3. Zurich 4.0
4. Chubb2 3.7
5. Generali 3.6
6. AIG 3.0
7. AXA n.a.
8. Prudential n.a.
2012 2013 2014 2015(In € bn)
1) Limited comparability among peers and years. KPI definitions aligned with AZ Definitions to the extent possible. All figures as originally reported to Supervisory Board. Definition changes are not reflected in the OP figures retrospectively. PY values not restated for changes in FX. 2) Chubb = legacy ACE + legacy Chubb 3) 9 months resultssource: company reports, GPC Peer Review
Our peers
32016
Compared with major international competitors: operating profit1
What did Allianz look for? (1/2)• Allianz’s contracts with its current provider were expiring which gave Allianz
a chance to review the various offerings in the market• Allianz wanted to bring all of its compensation plans to one provider. That
included the following plan types:o Allianz Equity Incentive: Cash-settled RSUo Mid-Term Bonus: Mid-term incentive in deferred casho Euler Hermes: Cash-settled RSUo Allianz Long-Term Performance Unit Plan: Deferred cash plano Allianz Asset Management Long-Term Cash-Bonus Plan: Deferred cash plano Deferred Into Funds: Fund-based incentive plano Allianz Capital Partners: Carry, Co-Invest and Waterfall
• Therefore, Allianz was in need of a provider who could administer all these plans
What did Allianz look for? (2/2)• On the financial reporting side, Allianz was looking for its provider
to fulfill the following requirements:o Full end-to-end process for compensation expense reportingo Including but not limited to quarterly reports on an organizational
structure level (general ledger accounting instructions), hedge account statements, due-payments, etc.
o Preparation of approximately 20 customized reports unique to Allianz
• On the system side, Allianz was interested in reducing the complexity of its system landscape and had a long term goal to reduce the number of systems from many to possibly two: 1 internal and 1 external (provider)
Challenges• Defining and developing customized reports while in implementation and getting to
know new system/people• Transitioning plans from a de-centralized management arrangement to a more
centralized structure• Transforming system landscape with a multi-year horizon while in implementation• Vendor to:
o Provide transparency on exactly what is included in the scope of services
o Set realistic expectations of how the client's data will be displayed
o Provide training/understanding of data load requirements to client
o Set expectations of the deliverables the vendor expects the client to provide (i.e. timing,format, resources required)
o Clearly communicate standard processes and alert the client to any gaps/risks/changes in their current processes in order to go live/be operational
• Communication and buy-in on use of communication and tracking tools
Is Allianz a unique implementation or something more common than we think?• We believe Allianz is complex. Based on what you just heard would you
agree/disagree?• Allianz ran most of their IT systems internally for many years. They have
undertaken a transformative approach and are now beginning to review most of these processes. Have you had a similar experience within your company? Do you run your systems mostly in-house or have you outsourced them? What did you outsource?
• Do you run your data in-house or do you outsource most/all of it to an external provider?
• Allianz has complex hedging structures. Do you hedge your plans or not?• Allianz is grating the plans locally to comply to local laws &
regulations but is ‘trying’ to manage the plans centrally. What is your experience?
Is Allianz unique? – Our Take!
• We believe the type of plans Allianz currently offers to its employees are not entirely unique in the Financial Services industry but not common either
• At first glance, we believe the requirements Allianz has on its financial reporting seem very tailored, but when compared to other companies of similar size and complexity the level of customization is not unique
• We believe that the granting of the plans locally but management centrally is a unique feature of Allianz
• Changing provider while transforming HR system landscape and in parallel migrating plans is not a common treat
Disclaimer
These assessments are, as always, subject to the disclaimer provided below.
Forward-looking statements
The statements contained herein may include prospects, statements of
future expectations and other forward-looking statements that are based
on management's current views and assumptions and involve known and
unknown risks and uncertainties. Actual results, performance or events
may differ materially from those expressed or implied in such forward-
looking statements.
Such deviations may arise due to, without limitation, (i) changes of the
general economic conditions and competitive situation, particularly in the
Allianz Group's core business and core markets, (ii) performance of financial
markets (particularly market volatility, liquidity and credit events) (iii) frequen-
cy and severity of insured loss events, including from natural catastrophes,
and the development of loss expenses, (iv) mortality and morbidity levels and
trends, (v) persistency levels, (vi) particularly in the banking business, the
extent of credit defaults, (vii) interest rate levels, (viii) currency exchange
rates including the Euro/U.S. Dollar exchange rate, (ix) changes in laws and
regulations, including tax regulations, (x) the impact of acquisitions, including
related integration issues, and reorganization measures, and (xi) general
competitive factors, in each case on a local, regional, national and/or global
basis. Many of these factors may be more likely to occur, or more
pronounced, as a result of terrorist activities and their consequences.
No duty to updateThe company assumes no obligation to update any information or forward-
looking statement contained herein, save for any information required
to be disclosed by law.
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