Allianz sticking to targets for P&C profit plans

Allianz's attempt to more than double operating profit at its German property and casualty unit in the next three years is "on plan", according to Markus Riess.

Riess, who has led the unit since July 2010, told Bloomberg in an interview that the insurer had "turned the corner in 2011" and was sticking to the targets set for its German non-life business.

The division plans to increase the number of insurance contracts it sells per customer while lowering costs and improving claims management, he said.

In December Allianz announced its goal to raise premiums at the German property and casualty division, its biggest non-life unit by premium income, by €500m to €9.5bn by 2014.

"We will improve our sales approach with a more modular product offering to help lift the number of contracts per customer from 2.3 at the moment," Riess is quoted as saying.

The unit applied the strategy to motor insurance last year and will broaden it to other non-life products such as personal liability and homeowners' insurance, he aded. 

Higher prices in some areas are helping Allianz's efforts. German auto insurance rates rose last year for the first time since 2004, ending a price war that steered the €20bn market into underwriting losses.

Allianz said in February that it secured a "high single-digit price increase" in German motor insurance in 2011, which is expected to boost earnings starting this year.

"The real turnaround has to come from our operating business," said Riess. "We can't simply rely on higher prices or a rise of interest rates.

According to Bloomberg, the firm aims to return its German motor business to an underwriting profit by expanding cooperation with car manufacturers and selling more individual coverage that better fits a customer's needs.

As part of an effort to boost services, Allianz has added 400 new positions in claims management.