German insurer Allianz is embarking on a radical shake-up which involves streamlining its corporate structure and integrating its Italian subsidiary in order to become a pan-European company.
Allianz will drop AG for SE
Allianz, Europe's largest insurer, announced Sunday that it was reorganizing itself into a European Company (SE), a new European Union legal structure aimed at making cross-border acquisitions more efficient as well as streamlining its corporate governance and cutting red tape.
The shake-up in Allianz's structure and management comes after the insurer said its losses in Hurricane Katrina which struck New Orleans, would be amount to 470 million euros ($584 million), affecting net income by 300 million euros.
As part of the revamp, Allianz will keep its two-board system, but the changes will trim the leadership structure of the insurer's 160,000 employees. The supervisory board will be cut down to 12 members from the current 20 and in future workers' representatives, not just from Germany but from several European countries, will occupy half the seats.
At the same time, the management board will gain three new international members: Enric Cucchiani, head of Italian subsidiary Lloyd Adriatico, Frenchman Jean-Philippe Thierry, currently Paris head of Allianz' s AGF and American Clement Booth, chief executive of Aon Re International. However, Allianz will retain its German chief executive, Michael Diekmann.
The radical restructuring will also lead to an overhaul of Allianz's German business with the thus far independent sectors of life- and health insurance as well as property insurance being merged into a new holding company.
"With the measures initiated today we create the necessary prerequisites to ensure our competitiveness goes forward," Diekmann (photo) said in a statement. "We want to consistently take advantage of our growth opportunities across borders."
Merging with Italian subsidiary
As part of the restructuring drive, the Munich-based company is also launching a 5.7-billion-euro offer to buy out minority shareholders in its Italian subsidiary, and Italy's second-largest insurer Riunione Adriatica di Sicurta spA (RAS).
Allianz, which has controlled RAS since the mid-1980s and currently owns 55.4 percent of the company, said it hoped the merger would allow it to reorganize its Italian activities and other operations in Austria, Switzerland and Spain.
"If you want to play in the premier league of international finance services providers, you need a strong base in your home market," Allianz CEO Diekmann said in a statement. "Our home market is Europe."