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Allianz Annual Report 2012

Annual Report 2012    Allianz Group We also play a constructive role in helping policymakers develop lasting solutions to the Euro crisis, as stability and predictability are the foundations of an attractive invest­ ment environment. With our strong belief that European unity is the only way forward if we want to preserve our in­ fluence in the international economy and safeguard our living standards for coming generations, we will continue to engage in discussions about the better future of Europe. Environmental changes 2012 saw fewer natural catastrophes and insured losses were lower than in 2011. Nonetheless, the implications of natural disasters for the insurance industry are still signif­ icant. Related payouts to customers have risen dramatically; losses have grown by a factor of 15 over the past 30 years. This rise is partly attributable to a greater number of insured assets worldwide. As an integrated financial services company, we are well aware that climate change could result in a range of com­ poundrisksandopportunitiesthataffectourentirebusiness. As a result, we are committed to supporting the develop­ ment of a low-carbon economy and see this as not just a sustainability priority, but a viable business and invest­ ment case. In recognition of this, we have been implement­ ing a Group-wide strategy covering climate-related risks and opportunities for our business and our clients. We work to reduce our direct carbon footprint and to develop products to help solve our clients’ challenges and to identify new investment opportunities relating to climate change risks and solutions. We offer our private and commercial customers a growing number (currently more than 130) of “green” products and services that mitigate the negative physical or economic effects of climate change or take its environmental impact into account. These aspects are a growing part of our prod­ uct strategy. Climate-related investments, such as renewable energies, are an attractive growth market as they contribute to great­ er diversification, which spreads portfolio risks. They also provide sound and stable long-term returns that are gener­ ally not linked to the ups and downs of the financial markets. This fits well with our investment strategy for insurance premiums, which calls for manageable risks and attractive returns. For more information, please refer to the chapter Our Prog­ ress in Sustainable Development starting on page 109. Social changes Customer behavior/expectations Theevolutionofthedigitalworldhasdramaticallychanged the way customers consume media, search for information or recommendations, and buy products. Social networks and other online channels are gaining in importance. In parallel, expectations of service levels are increasing. We are continuously adapting to this new digital lifestyle to stay connected with our stakeholders and improve cus­ tomer service. In the framework of our Digital Target Picture program we leverage the opportunities which changing customer preferences provide. For more information, please refer to the Strategic invest­ ments section. Aging societies Western industrialized countries face the challenge of ag­ ing and shrinking populations, caused by falling birth rates and increasing life expectancy. As a result of these changing demographics, there is a growing demand for private-sector pension schemes and healthcare solutions. Our solid mar­ ket position in continental Europe and the United States, as well as our strong brand and well-diversified product port­ folio, put us in an excellent position to further benefit from providing products and services for old-age, health care and assistance. Access to finance An estimated 2.6 billion people live on an income of between U.S. Dollar 1.25 and 4.00 a day, mostly in developing coun­ tries. Since only a fraction of these people have access to comprehensive state- or private-sector insurance schemes, it leaves the vast majority extremely vulnerable in the event of natural disasters, accidents or illness. Through its micro­ insurance products, ­Allianz offers protection and help to people with low incomes in developing countries to better manage these risks. Premiums are affordable and start from € 1 a year. We currently provide over 17 million people with microinsurance, mostly in Asia but increasingly in Africa and Latin America. Our products range from life insur­ ance and savings plans to crop index insurance. Although financial returns from microinsurance are much lower than from traditional products, we believe that satisfied microinsurance policyholders will bring a mid- to long- term return on investment as many of them move up the economic ladder and graduate towards more regular ­Allianz products. 109  Our Progress in Sustainable Develop- ment 162