FRANKFURT Dec 13 Allianz will need at
least three years to turn its troubled U.S. unit Fireman's Fund
into a dependably profitable niche insurer, an Allianz board
"In total, it will take 3-5 years to get this company to
where it is making a sustainable, consistent profit," Gary
Bhojwani, Allianz board member responsible for U.S. insurance
business, told Reuters.
"We've begun the process in 2012 so I believe you will see
the first signs of real progress here in the latter part of
2013," he said.
Fireman's Fund has been a headache for Europe's biggest
insurer, which saw its U.S. property-casualty business swing to
a 130 million euro ($170 million) operating loss in 2011 from a
profit of 266 million in 2010.
The business has also seen a widening underwriting loss in
the first three quarters of this year and was forced to bolster
its reserves for potential claims by over $400 million.
Bhojwani, 44, who joined Allianz's board in January, is
working to instil greater underwriting discipline and is turning
Fireman's Fund back into a niche player, concentrating on six
industrial sectors comprising 17 sub-sectors.
"We are going back to focus on dedicated industries and
build up expertise where we know we can get the right rate," he
Bhojwani declined to give details on the insurer's expected
hit from superstorm Sandy, which struck the Northeastern United
States in late October.
Allianz has said payouts for storm damage would not threaten
its ability to deliver operating profit of more than 9 billion
euros this year.
Certainty on claims tends to come only six to nine months
after an event like Sandy, with companies unable to file for
business interruption policies until their doors have reopened.
The types and amounts filed so far are following the
expected pattern, Bhojwani said.
"We have a good feel for what it's going to cost us," he
said, adding that Allianz planned to publish details with its
fourth quarter earnings on Feb. 21.