Allianz calls for discussions over capital rules for alternative assets
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Allianz has almost doubled its investments in alternative assets in two years but is urging governments, regulators and rating agencies to discuss how capital charges can be relaxed in order to accelerate its move to green transition.
The German insurer allocated €82bn (£72.9bn) to alternative investments in 2022, which accounted for 5% of Allianz’s third party assets under management.
Chief financial officer Giulio Terzariol told journalists this morning the volume was only €46bn in 2020 and part of the company’s strategy was to grow its business in this area.
Presenting Allianz’s full year results today, he said: “So we put a clear focus on growth in the alternative and you can see how within two years we brought the number from €46bn to €82bn. So that's another sign of our ability to execute on the key initiative for us.”
However, chief executive officer Oliver Bäte said there are “onerous capital charges” for infrastructure investments and urged government departments and regulators to discuss this topic, given that liquidity risk is not a worry for the insurer.
He said: “For the vast majority of books that we have, there is no liquidity risk, because we have very long duration liabilities that we are matching.”
Bäte added rating agencies should also be in the discussions because of the impact of Allianz’s ratings on capital charges.
“Even if we get some relief on things like Solvency II, we also need to acknowledge that for a AA-rated company like ours, it's very hard to invest because capital charges are super high,” he said.
“We need to have all regulators including the rating agents talk about why that is and if society wants us to invest more into the green transition.”
The firm’s total AuM decreased by 18% year-on-year to €2.2bn in 2022. Excluding the group’s own assets, third party AuM, managed by Allianz Global Investors and PIMCO, dropped by 17% €1.6bn in 2022 compared with a year ago.
The decline is attributed to a positive impact of €81.6bn foreign currency translation effects, which was more than offset by unfavorable market impacts of €301.1bn, net outflows of €81.4bn and a negative impact of €30.3bn, mainly resulting from the transfer of assets to Voya Investment Management.
Under the agreement with Voya IM, the deal announced in June, AllianzGI agreed to transfer investment teams and assets comprising most of its US business to Voya IM and receive a stake in Voya IM of 24% of the enlarged US manager.
How would you allocate your investments into alternative assets if capital charges were lower?
