Expert Risk Articles

Hungry for Growth, but not Greedy

Allianz is now active in the Nordic corporate risk market, but is not in direct competition with local insurers, despite having big plans for the region.

Growing Allianz's corporate insurance business in the Nordic region

German insurance group Allianz is active in virtually every sector of the insurance market and has a global footprint bigger than most multinational corporations.

But when it comes to the Nordic region, the only Allianz-branded entity with a presence in the markets of Norway, Denmark, Sweden and Finland is Allianz Global Corporate & Specialty (AGCS), the group’s large industrial and specialty insurance company.

Stig Jensen, AGCS’s chief executive for the Nordic region and Eastern Europe, says while the group’s credit insurer, Euler Hermes, has had a presence in the region for some years, the Nordic countries in many ways represented the last blank spot in the EU for Allianz until AGCS established an office in Copenhagen in 2007.

There are at least two reasons for Allianz’s cautious approach to the region. To begin with, the Nordic insurance markets are very mature and hugely competitive. And while everyone more or less speaks the same language across the region, the markets in each country tend to be small and very closely knit and there are significant differences between the business cultures in the region.

The combination of these factors makes it difficult for outsiders to comprehend and access – let alone succeed in – these markets.

Local knowledge

According to Jensen, if you want to be successful in the Nordic region, you need to employ local people. “The way we do business is very diverse. If I went to Sweden and do business in the same way as I do in Denmark, Norway or Finland, I will totally fail. In Sweden, it is very much about consensus, about meeting several times and getting into the details of an issue.

“In Sweden, it is a matter of building relationships and establishing trust. Once you have done that, you are likely to have a very long-term partnership with the client. But it’s different in Denmark, an old sea-faring nation. We have a tendency to be a bit more informal and do things a little bit faster.”

In Norway, which is not part of the EU but which has extensive oil and gas resources, business negotiations are likely to be intense, although the outcome is more often than not determined by pragmatic considerations. In business circles, the Finns have a reputation for not revealing unnecessary information or emotion during negotiations.

Not just challenges

But Jensen is clear AGCS’s entry into the Nordic region in 2007 was prompted by developments and emerging opportunities in the region (particularly in the industrial and specialty risk areas) rather than by a fixation with overcoming difficult challenges.

A key development was the opportunity to hire a local team of industrial risk underwriters who had previously worked for Gerling, another German industrial carrier. Jensen had served as Gerling’s regional managing director for the previous decade and a half.

Because of the team, AGCS was able to start writing business from the Copenhagen office from day one, Jensen says. Once administrative functions were established in Copenhagen, AGCS moved to set up sales representative offices in Stockholm in 2009 and Helsinki and Oslo in 2010.

One market

The idea, he explains, is to treat the region as one market. “Denmark, Sweden, Finland and Norway are fairly small as individual markets. But if you look at the Nordic market as a whole, you suddenly have a size similar to that of the Benelux countries. So it made a lot of sense for us to establish a hub in Copenhagen and then set up sales representative and marketing operations in the rest of the region instead of replicating ourselves in all four countries. A lean, efficient organisational structure made economic sense, but there were also benefits for our clients.”

The decision to set up an office in Copenhagen was also related to AGCS’s own particular history. AGCS, which is the result of a merger between Allianz Marine and Aviation and Allianz Global Risks (AGR) in 2006, was very much looking to expand the geographic scope of its operations.

Indeed, the Nordic region was not entirely virgin territory. AGR had in the past serviced the needs of its multinational clients with operations in the region via a co- operation agreement with If, the region’s biggest insurance group.

However, Jensen explains, this was done almost entirely on an opportunistic basis: as and when AGR needed to support a multinational client as part of a global insurance programme, these risks would eventually find their way to AGR underwriters either in the UK or Germany.

Bright prospects for AGCS Nordic region


Jensen is very positive about the region’s economic prospects. One major development is the combination of state and private sector support for the so-called know­ledge industries in the Nordic countries, a trend which is particularly evident in Sweden and Denmark.

These industries span the IT, pharmachem, biotech and green technology sectors. There are links and co-operation between the knowledge industries and universities in Denmark and Sweden. For example, Microsoft’s largest software development centre outside the US is in the city of Vedbaek in Denmark.

One result of this co-operation has been the creation of Medicon Valley in Zeeland in the south of Sweden, which in turn has fostered a number of biotech start-up companies. Indeed, more than 18% of the total GDP of Denmark and Sweden come from the pharmachem and biotech industries.

The region is also at the forefront of development of green energy technology. This is particularly relevant for Allianz, which is both a big investor in the sector and, through AGCS, also an insurer of green energy-related risks.

Only two months ago, Siemens announced it would invest €100m ($134m) in setting up a wind turbine factory in Denmark. This development owes much to the high number of engineers in Denmark and to the fact Vestas, the world biggest producer of turbines, is also based in the country.

Although Denmark has access to significant oil and gas resources in the North Sea, there are more windfarms in Denmark than anywhere else in the world. Similarly, Norway (despite its huge oil resources) derives a significant proportion of its energy from hydroelectricity.


The fact AGCS is the only Allianz company present in the Nordic region means it has a greater degree of flexibility than it otherwise would in terms of the business it underwrites.

For example, in terms of companies’ annual turnover, AGCS can lower the threshold to well below the €500m line above which AGCS would normally write the business. Companies with a turnover lower than that amount would normally be insured by the local Allianz subsidiary (except for specialty classes of business).

“This means we can concentrate on the very, very large companies but also on companies that are small to medium-sized. But for the moment we tend to concentrate on what we see as our competitive advantage, which is offering our capacity and services to international companies.

“For us, a pure domestic risk in the Nordic region is currently more about price than about providing a comprehensive risk-management solution, which is underpinned by our global network and AA financial strength rating.”

AGCS’s strategy in the Nordic region is to make available its core product range (liability, property, financial lines, cargo and engineering) to the market and then to expand geographically into new markets, particularly central and eastern Europe, including Russia and Turkey.

AGCS already writes a significant volume of energy, aviation, and property business in Russia. The company’s global energy business, however, is written from dedicated centres in Singapore, London and Houston.

While there is not a big tradition of corporates purchasing liability insurance in central and eastern Europe, things are changing. For example, legislation which comes into force in January 2012 in Russia will make it compulsory for companies to have employers’ liability and workers’ compensation cover.

Jensen also refers to similar developments in Turkey and says AGCS is already writing a respectable volume of financial lines business in central and eastern Europe.

Aviation and marine hull

In particular, the company would like to expand into the Nordic region’s aviation market and is analysing the marine hull market. 

The aviation market is dominated by two players. “Allianz is by tradition one of the biggest aviation underwriters and we would like to be the third player. We would also like to have a closer look at marine hull because Norway is historically the third-biggest market in the world.”

A study undertaken by Jensen and his team suggests around $400m of Norway’s large marine hull market is placed only within Norway and this business is not shown outside of this market.

“So given our size and capabilities, we are always looking for opportunities to increase the scope of our operations in the region, both by line of business and by geographic area. But it is like the old tale of how to eat an elephant: one mouthful at a time.”

A reliable partner for Nordic clients

Financial crisis

AGCS entered the region just as the financial crisis hit the Nordic countries. Although there is never an optimal time to enter any market, according to Jensen, the timing turned out to be quite positive.

“Suddenly Allianz, with its AA rating, appeared in the market and it was clear we did not have any exposure to the sub-prime mortgage crisis. This was beneficial for us, especially in Sweden where there are large companies like Volvo, Saab and Ikea.

“These companies wanted a financially strong partner to participate in their insurance programmes.  We were a new player in the market and under normal circumstances, we would not have benefited from the Allianz brand in the Nordic region because we do not have the same history in the market as we do in Germany or elsewhere in Europe.

“But they knew Allianz was highly capitalised, so they wanted us to be part of their larger insurance programmes, in which we took small minority shares. But we developed those relationships from there. Because that is what we believe in: long-term partnerships.”

Well insulated

As it turned out, the Nordic region was relatively well insulated from the financial crisis, largely because many of the countries had gone through their own banking crisis during the previous decade.

There is, however, a great deal of misconception about the impact of the financial crisis in the region. This is largely influenced by the banking crisis in Iceland, a country which a great many people associate with the region.

But Iceland, as Jensen points out, is not in the Nordic region. However, he does not deny the last few years have been challenging for the region. “But this was mainly due to the fact many of the countries are highly dependent on exports and therefore very sensitive to any downturn in the global economy.”

Jensen says AGCS is not in the Nordic market to compete with local companies to insure pure domestic risks. “Our objective is to be a major player within the international insurance programmes where we can add value via the Allianz network.

“This is hugely important when the issue of compliance is so big. Global companies in the region like Novo Nordisk, Rockwool or Cheminova know they have a partner they can trust, who ensures they are in compliance with tax, stamp duty, risk-management and corporate governance requirements in every jurisdiction.”

AGCS, he explains, is not driven by market share, although it is in the region to make a profit. “I like the expression of being hungry but not greedy. It suggests we are competitive, but not at any price. I think this is the right approach, if you want to be a long term partner.

“When we entered the market, the domestic players assumed we would compete on price in order to gain market share. But that was never our intention.”