Capital Solutions
Meet our expert
Capital solutions
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Product description
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Risks covered
We focus on transforming insurance risks driven by events such as earthquakes, hurricanes or floods into investment products. We do this by transferring risk out of the traditional insurance sector into the capital markets for investors seeking alternative asset classes.
With a team of experts based mainly in Bermuda and New York, we work closely with specialist funds and partners in many capacities in the Insurance Linked Securities markets. We act as both structurer and sponsor of Catastrophe Bonds, broking private placements between Allianz and capital market investors. We also act as a transformer between financial and insurance execution formats and as an investor.
- Insurance Linked Securities
- catastrophe bonds
- catastrophe swaps
- natural catastrophe risks
- property & casualty risks
Climate solutions
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Product description
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Risks covered
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Scenarios
- financial volatility from unexpected weather patterns
- business interruption (weather related)
- supply risks (e.g. wind for wind farms, warmth for plant growth, water for hydro-power generation, etc.)
- operational risk (e.g. snow and ice cancelling flights, low rivers impacting barge traffic, cooling of manufacturing plants, etc.)
- demand risk (e.g. cold weather affecting battery and coat sales, hot weather increasing beverage sales, etc.)
- promotional risk (e.g. product sales boosted as a result of risks linked to weather peril)
The challenge
Weather-dependent power generation
A lack of wind can significantly impair power generation and, potentially, the ability to fulfil financing commitments. Annual wind power generation can deviate by more than 20 percent from the long-term average, resulting in production and earnings volatility.
Weather changes and car battery sales
Retail sales are highly sensitive to weather changes, creating volatility in earnings and uncertainty for the retailer. For example, an auto supply company sells more batteries during cold winters than during warmer ones.
Allianz's response
Top 3 global business risks in 2024
1. Cyber incidents (36%) - 2023 rank: 1 (34%)
2. Business interruption (31%) - 2023 rank: 2 (34%)
3. Natural catastrophes (26%) - 2023 rank: 6 (19%)