MUNICH, Germany (Reuters) – The low interest rate environment is increasing pressure on Allianz to cut costs because it undermines the insurer's ability to earn adequate returns on investment, Chief Financial Officer Oliver Baete said.
Baete said that some savings could be found by improving processes in administration, but he did not elaborate on specific measures for lowering costs. The insurer has already begun trimming costs at its German property-casualty division, a move that will involve job cuts.
Allianz also said that it was open to investing in offshore wind projects as it seeks higher returns than the 1.5 percent offered by 10-year German sovereign debt. It is already active in a number of onshore projects, which yield a gross margin of between 7 and 9 percent.
The Munich-based insurer could consider investing sums as large as 1 billion euros ($1.3 billion) in offshore wind farms if the project and preconditions prove attractive enough, Baete said.
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