Mr. Ralph, Allianz Asset Management (AAM) contributed roughly 25 percent to the operating profit of Allianz in 2014.
Do you expect to be able to grow or are you on a consolidation path given market conditions?
Growth is a result of what you deliver to your clients, not the other way round. For 2014 we have delivered: The three-year outperformance ratio of Asset Management is very good, it reached 84 percent. We will keep putting our clients first. So what’s on their agenda right now? I think one of the major drivers of our asset management and life insurance business will come from the transition of the baby boomer generations into retirement. This “Silver Tsunami” is an opportunity for us to serve our clients by providing smart ways of obtaining a steady income stream. So Allianz’s solutions not only include asset management components to make the most of the low interest rate environment, but we can combine them with life insurance elements to cover the risk that a person outlives his or her retirement savings. Against this background, baby boomers will contribute to growth in the business.
How is the “Silver Tsunami” reflected in Allianz Global Investors’ focus in 2015?
2014 was a record year for Allianz Global Investors. They saw net inflows for the eighth consecutive quarter and surpassed 400 million euros in operating profit for the first time since the set-up of their new structure in 2012. In 2015, Allianz Global Investors will among other things continue to focus on the investor need for outcome oriented strategies which address the transition from the savings to the decumulation phase of life. Clients also seek an extended range of solutions which diversify across different asset classes. Convertible bonds and infrastructure, alternatives and renewable energy offer additional growth segments that address the needs of institutional clients, among them pension plans.
And a fixed-income focused company such as PIMCO, can it fulfill investors’ retirement needs?
PIMCO is on the right track. Its strong and stable portfolio management teams and their continued excellent investment performance will be the basis for future growth. As a leader in fixed income strategies, they are very well positioned to get clients across the world to and through retirement. The aging population in many developed markets leads to an overall reduction of risk in portfolios and a natural demand for steady income which bonds offer. Institutional clients have to match liability duration and fulfill capital requirements. Also, investors might raise interest in PIMCO’s active strategies as rates rise. Nonetheless, PIMCO will continue to diversify into equities, alternatives and real return strategies.
