In its first-quarter report, German multiline insurance company Allianz offered an assessment of the current financial landscape, and offered predictions as to the global market’s affect on insurers. There are certain perils, reports Allianz, but suggests taking a cautiously optimistic view of the future.
The insurer experienced a significant drop in its first-quarter net income (97.5%), which led the company to state that the financial markets "will not be calm in 2009," as "distortions from the boom years have not yet fully worked through," especially in banking, according to an A.M. Best report.
Insurers will face certain risks related to all types of securities and the loss of consumer confidence as the financial crisis unfolds, says the report. Insurers will have to work to restore customer faith in long-term relationships.
Allianz also predicts a new business slowdown in the property/casualty segment. On the plus side, reports A.M. Best, problems in the capital markets, and low interest rates in particular, could enforce pricing discipline among nonlife insurers, according to the company.
For the life insurance segment, long-term fundamentals "remain intact," Allianz said, though "they will be affected by how effectively mandatory health insurance systems are complemented by privately funded health insurance."
Allianz believes it will achieve sufficient operating results in its next financial reporting quarter because "the major part" of its business is in the property/casualty segment, which is "least affected" by the financial crisis.
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