Allianz Restructures Its Alternative Risk Transfer Line

Allianz Global Corporate & Specialty (AGCS) will restructure its alternative risk transfer (ART) line of business into two teams. Effective November 1, 2018, ART Chief Underwriting Officer Richard Boyd will head up the capital solutions insurance-linked markets team. The remaining ART practice groups encompassing corporate solutions, reinsurance, and climate solutions will be led by Michael Hohmann, global head of liability at AGCS.

"Large companies are increasingly seeking to assume more control over their risk management beyond traditional insurance products in property or liability. With our two new lines of business, we can respond to these needs by designing multi-line, multi-year, parametric or capital-market solutions to protect our clients from earnings and cash flow risks," said Hartmut Mai, AGCS board member and chief underwriting officer corporate.

ACGS's ART line of business accounted for €1.135 billion of gross written premiums in 2017, including fronting revenues. ACGS said that increasingly, larger multinational businesses demand more than a product-based response, looking for customized solutions to their more complex emerging or "intangible" risks, which often cannot be covered adequately under traditional insurance.

The organization will develop AGCS alongside ART products and services to provide nontraditional covers on a multi-line, multi-year basis while continuing to offer fronting for captive (self-insurance) programs for large corporate customers.

ACGS said that there is increasing demand from both investors and insurers for products that bring together the insurance and capital markets (so-called insurance-linked securities products). These are typically where capital market investors such as pension funds are interested in accessing insurance risks (e.g., catastrophe bonds) to diversify their portfolios. In this regard, AGCS will move to source insurance risks—typically event-driven risks such as earthquakes and hurricanes—that will be structured by the capital solutions team for capital market investors.