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Allianz Annual Report 2013

Annual Report 2013    Allianz Group54 allow us to better position ourselves in this competitive market over time. Our life and annuity business primarily underwrites fixed index and variable annuities, and fixed index universal life insurance prod- ucts–allofwhicharesoldthroughindependentdistributionchannels, as well as large financial institutions such as banks and wire houses. In 2013, we expanded our product portfolio by introducing a hybrid product offering both variable investment allocation options and index-linked investment allocation options. In 2013, competitiveness increasedinthefixedindexannuityspaceduetoaggressiveproducts offered by competitors that started to enter the industry two years ago. Despite a more competitive market environment we continue to be the market leader in the fixed index annuity market. In the wake of better market conditions and product changes in 2012, product profitability of new business significantly improved in 2013. As a result, our life and annuity insurance business performed well over- all. We anticipate continued economic uncertainty, equity market volatility and a low interest rate environment in the long term. On the upside, we continue to believe that U.S. demographic trends present us with an excellent opportunity in the retirement market. In order to reap these benefits, we will continuously strengthen our distribu- tion network and value proposition to our customers through product innovation and high-quality services. Selected Insurance markets ­Turkey We serve the Turkish market mainly through our subsidiaries ­Allianz Sigorta S.A., ­Allianz Hayat ve Emeklilik S.A. as well as the recently acquired Yapı Kredi Sigorta S.A. and Yapı Kredi Emeklilik S.A., which was rebranded to ­Allianz Yasam ve Emeklilik. Through our subsidiary ­Allianz Sigorta, we continued to acceler- ate our business in Turkey, with organic premium growth of 34 % com- pared to a market average of 22 % in property-casualty in 2013. While thisgrowthwasmainlydrivenbymotorbusiness,wearealsoaleading provider of health insurance in Turkey. Our operational success is based on a large and growing agent distribution network, sophisticated pricing, robust underwriting and high efficiency. ­Allianz is the market leader in terms of property- casualty profits. Supported by a continuous focus on customer experi- ence management and quality assurance, ­Allianz in Turkey succeeded in increasing its customer base by over 50 % in 2013. In addition to organic growth, the acquisition of Yapı Kredi Sig- orta and its life and pension insurance subsidiary Yapı Kredi Emeklilik, rebranded as ­Allianz Yasam ve Emeklilik, fueled our expansion in Turkey.Throughthistransaction,whichclosedon12 July2013,­Allianz became the market leader in the property-casualty segment and a top-3 player in life and pension solutions. This acquisition allows us to accelerate our growth through strong strategic relationships in an insurance market with significant long-term potential. An important part of the agreement between ­Allianz and Yapı Kredi is a 15-year bancassurance agreement which will provide ­Allianz with exclusive access to the fifth-largest banking network in Turkey, comprising more than 900 branches and 6.5 million custom- ers. A further part of our profitable growth story is the successful launch of a 10-year exclusive distribution agreement with HSBC on 23 August 2013 for the sale of ­Allianz life and pension products through HSBC’s widely spread branch network in Turkey. Both part- nerships will strengthen our presence in the Turkish market for life and long-term provisions, which is currently dominated by bank dis- tribution. Based on the still very low levels of insurance penetration and the young demographic profile, our outlook for insurance in Turkey remains very optimistic. While we expect competitive pressure to further increase, ­Allianz in Turkey benefits from its strong and diver- sified market position to generate further profitable growth. ­Allianz Worldwide Partners In 2013, our global entities active in the B2B2C space – ­Allianz Global Assistance, ­Allianz Worldwide Care and ­Allianz Global Automotive – started to collaborate closely as ­Allianz Worldwide Partners (AWP). The set-up of this division will be further enhanced during 2014 with the reclassification of our International Health business in France from Life/Health to the Property-Casualty business segment. ­Allianz Global Assistance is the world leader in travel insurance, assistance and personal services and has the operational platforms to offer sup- portservicesona24/7basisaroundtheglobe,handledbystronglocal units providing on-site care. The combined activities of ­Allianz Worldwide Care and ­Allianz France International Health will form one of the biggest players in international health insurance, selling and servicing health products to expatriates and high-net-worth individuals around the globe. ­Allianz Global Automotive, as the lead- ingstrategic insurancepartnerintheautomotiveindustry, combines sales expertise around the car dealer point-of-sale with product know-howembedded intothevaluechainoftheautomotiveindustry. Based on premiums, we are the worldwide market leader in this seg- ment, serving over 40 car brands across more than 25 countries. Based on the combined strengths of these businesses, AWP can provide a comprehensive product and service range. AWP has seen strong growth in 2013, building on the continued growth of its components and adding growth synergies from increased collaboration on sales and products.

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