Nov. 18 (Bloomberg) -- Allianz SE, Europe’s biggest insurer, said markets such as Asia, Brazil and eastern Europe as well as products that protect against cyber risks will increase revenue at its industrial insurance unit.
“New products such as cyber-risk protection and coverage for renewable-energy plants will boost premiums in the mid-term,” Axel Theis, chief executive officer of the Munich-based insurer’s Allianz Global Corporate & Specialty industrial insurance unit, said in an interview. “We will also continue to build our presence in growth markets in Asia, South America, Africa, the Nordic countries and Russia.”
Industrial insurers such as Allianz’s AGCS division and units of Zurich Insurance Group AG and American International Group Inc. provide coverage for corporations against risks ranging from property damage to business-interruption and liability insurance for managers. Reinsurers such as Swiss Re Ltd. are also increasingly offering similar protection as they seek to expand their business.
“We haven’t seen a market-wide increase of prices in our sector since the terrorist attacks on the World Trade Center in 2001,” said Theis, 55, who has run the unit since it began in 2006. “Rates have been hit by low interest rates and an abundance of capital, and we rather see them change in some regional markets, segments or product areas than on a broad level.”
In the third quarter, “price decreases at AGCS’s aviation and liability business could only partly compensate for price rises in our marine lines,” Allianz said in the report on its website.
Cyber-risk insurance, which AGCS began selling in July, covers corporations against their own and third-party damages resulting from hacker attacks or information-technology glitches. The market for such policies in Europe is expected to increase from 150 million euros ($202 million) in premiums in 2012 to as much as 900 million euros in 2018, according to AGCS.
“I could image that cyber risk protection will be an established product in a few years comparable to what fire and liability insurance are today,” Theis said.
The unit, which Allianz set up to combine its industrial insurance activities, reported gross written premiums of 4.04 billion euros for the first nine months of the year, down 5 percent from a year earlier on foreign-exchange movements and as prices in some markets declined. Operating profit rose 5.6 percent to 342 million euros.
AGCS made up 11 percent of Allianz’s nine-month gross premiums in property and casualty insurance and 9.2 percent of operating profit.
While Allianz’s appetite for acquisitions has increased in general, that is less the case at AGCS, Theis said. “Why should we buy a whole company when we also have the option of hiring the top personnel without all the legacy issues?”
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