Uncommon Mistakes and Common Lessons From Allianz

Allianz has been in front of investors a lot lately. It is a high-profile business anyway, and if you add to that a high-profile fund implosion, attention has focused. Then came supply disruptions that started to affect the transport and manufacture of new autos. This was compounded by chip shortages and rising steel prices leading to rising auto repairs and rising used-car prices. What was initial relief for the travel insurance industry and insurers with travel exposure has been short-lived. As airlines have suffered staff shortages and conflict has burdened travel, travel insurance demand is likely to fall and travel insurance claims will be rising. Then came the U.S. Department of Justice and SEC ruling. While Allianz had not fully provisioned for fines and restitution, we think it was news of CEO Oliver Baete’s rise in compensation and the ban from operating U.S. mutual funds that left the market stumbling.