In a recent fireside chat with Allianz’s head of investor relations, Oliver Schmidt, the insurance giant revealed that it could modestly increase its natural catastrophe budget.
The move would aim to fortify the company’s underwriting discipline and align pricing strategies with potential risks.
Investors raised inquiries about the rationale behind augmenting the natural catastrophe budget, seeking clarification on how this adjustment could be perceived positively.
Berenberg reports that Allianz emphasised that by budgeting for slightly higher natural catastrophe costs, the operating entities would be compelled to price their products accordingly.
Allianz, known for its consistent delivery on targets, has expressed confidence in surpassing its €14.2 billion operating profit target midpoint.
Although the company refrained from adjusting its guidance during the Q3 2023 results conference call, it anticipates exceeding the target midpoint while likely staying below the upper end of the €15.2 billion target range, note analysts.
This strategic measure is anticipated to enhance underwriting discipline across the organisation.
Furthermore, Allianz is considering a shift to an annual buyback calendar as part of its commitment to regular share repurchases. Berenberg explains that the company believes that adopting such a schedule would contribute to maintaining a focused capital management policy.
Allianz’s optimism regarding its combined ratio remains high, with a focus on achieving a ratio of less than 93% in the future.
The company attributes this optimism to its robust cost discipline, contributing to an annual reduction of approximately 30 basis points in the combined ratio, say analysts.
