Allianz says business model is interest rate-proof -CEO in paper

FRANKFURT Fri Dec 6, 2013 11:13am EST

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FRANKFURT Dec 6 (Reuters) - Allianz, Europe's biggest insurer, is confident its business model can withstand prolonged periods of low interest rates, the company's chief executive was quoted saying by a German newspaper.

"We've found a mix where results remain relatively stable, regardless of whether interest rates go up or down," Michael Diekmann said in an excerpt of an interview with Frankfurter Allgemeine Zeitung to be published on Saturday.

The ECB unexpectedly cut rates last month to a record low of 0.25 percent and has signalled they could go lower still.

Low interest rates in the wake of the financial crisis have slashed the income insurers can earn from their investments in safe assets like government bonds, making the burden of meeting past pledges to policy holders increasingly onerous.

Allianz earlier this year launched a new type of life insurance savings policy with more limited guarantees to the holder than traditional savings products.

Diekmann said the new policies were selling well and already accounted for 16 percent of its agents' new business.

"Size, brand, diversification, integrity, maybe also something like boredom in the sense of reliability - it's that what people are looking for," Diekmann was quoted as saying. (Reporting by Christoph Steitz and Jonathan Gould; Editing by David Holmes)

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