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What do you think?
Business leaders review the news on video on FT.com. This week Paul Achleitner, Allianz chief financial officer. Watch the video interview
Financial Times: Dr Achleitner, I’d like to start by talking about the mid-term elections in the US. We’ve seen a bit of a small political earthquake there and I wonder what your reading of it was and what European reaction we might expect.
Paul Achleitner: Well, I think from a European point of view where in general the part that needs to be watched very carefully is what impact does that have for the whole issue of trade negotiations, particularly the Dohar round which was in trouble before and, obviously we all think that if this wouldn’t come to fruition and protectionism would be on the rise, it would be a serious, setback.
FT: And in Europe as well, you’ll see the same thing?
Achleitner: I think, increasingly politicians for purely domestic reasons see that, that they get, may I call it political brownie points, by sounding more protectionist and, I think it would be very regrettable if we can’t pull off the Doha round and currently that doesn’t look so good.
FT: But at the same time in Germany we hear a lot about the corporate and political transformation that’s going on there. Tell us about that.
Achleitner: I think that that is a correct observation, particularly on the corporate sector but there are also, you do see an increasing disconnect between the discussions of, global managerial orientation on the one hand and, domestic political orientation on the other hand, and the connection between politicians and managers, particularly of large corporations, is something that is to be viewed with concern.
FT: And do you think the outside world understands Germany or do you think there’s still a bit of a stereotype, one thinks perhaps of the Deutsche Börse bid for the London Stock Exchange and how that was received.
Achleitner: Well, obviously, I have to say that I find it, how shall I say, at least interesting to put it mildly, with kind of commentary £5, you know, .20 or .40, bid by, er, the German Stock Exchange received in general in the City of London compared to a £11.30 type of bid by the NASDAQ and, um, how the rationale was being disputed and the financials weren’t disputed in the first case and how little discussion there is about the rationale and or the financials on the second case.
FT: It seems as a result that the opportunity for a pan-European Stock Market may have passed. Is that a missed opportunity in your view?
Achleitner: I think that’s the most regrettable part. I think, it would be hugely desirable that there is a European consolidation which doesn’t preclude co-operation with our American colleagues but to not have a pan-European type of set-up on the capital markets and the backbone of the capital markets in the form of stock exchanges, I think is a big miss and it’s likely a missed opportunity.
FT: And talking of consolidation, we’ve seen one or two deals in the insurance sector, um, tell us about those and what you think is going on and the rationale that’s driving the driving the market.
Achleitner: Well, I think there are obviously two considerations. On the one hand there’s a lot of talk about quote, unquote, consolidation, but in that context I’d like to point out that if you look at the insurance industry objectively, it’s already reasonably consolidated compared to other industries, not by the amount of players but if you look at the size of the top three, four, five players, but there will continue to be movement along those lines but the real issue that people are looking for is growth.
That is why there is an attraction to markets like the US life business which is a high growth type of market as well as emerging markets type of transactions and companies who have exposure in those markets.
FT: Allianz has recently talked to the pan-European corporate structure, tell us why you did that and the benefits you see coming from it.
Achleitner: Well, first of all, there was a purely technical reason in terms of the cross border merger with RAS which led us to adopt the SE. Having said that, we saw and we continue to see, significant benefits in adopting a European entity as we move in terms of consolidating our European entities and moving more from a federation of national insurance companies to an effective global financial institution and doing that under the culture of a European entity rather than purely a German AG is culturally very beneficial.
As an ancillary side effect, we have had the opportunity to streamline some of the corporate governance issues that you commonly have in Germany such as improving the efficiency of our supervisory board by narrowing the amount of people, they are down to 12.
FT: I see. And do you expect many other European companies to follow suit?
Achleitner: I do believe that it is interactive structure but you have to individually decide…very clearly individually look at the situation by situation if it pays off because it also, of course, a big thing to change your legal structure and it requires a lot of negotiations and a lot of legal issues, and you want to look careful but, yes, I do believe that increasingly people are going to come around to use this more broadly.