Partnership is key as Allianz Commercial plays its role in ESG and PPPs

One way in which the new Allianz Commercial operation will bring significant benefits for customers is through support for the transition to net zero and new technologies needed to make this leap, according to CEO Joachim Müller.

“This is a hot topic for the market and for us. We are not only interested in insuring and supporting the new technologies, but also we want to be close to our clients to help them manage the transition. We need to be active in both traditional and new segments. We total close to €20bn in premiums as Allianz Commercial and we are of a size where we have to take a leading role in the transformation. We take this very seriously,” he said.

A big question around ESG currently among the risk and insurance management community is what – if any –  impact it will have upon the underwriting strategies of their core partners.

Opinion has been sharply divided among Europe’s risk managers taking part in this year’s Risk Frontiers Europe survey.  Some say that the carriers are asking the questions but not doing anything with the information, while others say that the ESG track record is genuinely having an influence.

Müller said Allianz Commercial does take ESG seriously from an underwriting and investment perspective.

“ESG is part of our daily underwriting routine. We work as partners, with our customers joining us in the transformation. We are prepared to let business go if it is not aligned with our ESG criteria and ambitions. We would like to achieve net zero in our own business operations by 2030 and our portfolio by 2050. This is a clear path. There are clearly big questions on reporting and on data in this area and it will evolve over time, but we are committed as underwriters, investors and a company as a whole,” he said.

Allianz Commercial is also committed to support its customers in the equally fast developing area of due diligence and reporting down the supply chain, driven by the EC’s Corporate Sustainability Due Diligence Directive (CSDDD).

“On the risk management side we are ready to support our customers also in this area as with cyber. You have to ask the questions as underwriters need to be convinced that the company is doing the right thing or making the right efforts to avoid breaches. We are happy if the company is making the right efforts and investments. If they are not then it is not really a partnership and will not work,” said Müller.

Partnership is also essential to tackle systemic risks.

Ferma recently gathered some of the key actors from across insurance, risk management and public sector to launch a new joint report with its industry partners, including Allianz, entitled Cyber insurance dialogue – How Europe can lead the way to cyber resilience.

This report addresses the challenges faced by all participants in the cyber insurance chain and highlights the potential for Europe to become a global leader in developing solutions for risks that cannot be covered by the private insurance market alone, chiefly though public private partnerships (PPPs).

PPPs have been under discussion since the onset of the Covid-19 pandemic, which starkly revealed the limitations of the commercial insurance sector when it comes to such systemic risks.

Müller stressed that Allianz is fully behind this effort. “The insurance industry cannot bail out the world for systemic risks such as Covid-19 or cyberattacks on infrastructure. We need partnerships with all the relevant parties. We are open for this and pleased to be involved in the consensus at Ferma level for systemic risks,” he said.