Allianz Insurance Company Review
Allianz, the giant German financial services and insurance company, offers a variety of annuity and life insurance products through its Allianz Life Insurance Company of North America. The company does receive high ratings from three of the major financial analysis firms but has a history of controversy and some instability.
Involvement with the Nazis
The insurer was formed in Munich in 1890 but based its operations in Berlin, then capital of the German Empire. The company started international operations in 1893 and moved into the US market in 1896. It currently has operations in 70 companies around the world and has been involved in banking and other financial services businesses in Germany and elsewhere.
Like many German companies, Allianz had close relations with the Nazis during Adolph Hitler's Third Reich from 1933-1945. Kurt Schmitt, a former Allianz director served in Hitler's cabinet as Economics Minister in the early 1930s. Another Allianz executive Eduard Hilgard served as the Nazi official overseeing the German insurance industry.
The company's own website posted information indicating that it issued insurance policies to Nazi organizations including the SS, which was in charge of the death camps during World War II. Allianz has freely admitted this chapter of its history and has taken some responsibility for it by donating money to a German group that compensates Holocaust victims.
Potentially Risky Activities in the Financial Industry
In recent years, Allianz has engaged in some questionable activities in the financial industry. The company changed its focus to asset management and banking in 1998.
This move produced some dubious results, news reports indicate. It purchased the Dresdner Bank (a large German bank) in 2001 as part of this strategy but sold the same institution in 2008 because of large financial losses. The Dresdner Bank was sold to another German bank the Commerzbank, shortly after the sale that institution had to be taken over by the German government to prevent its collapse due to heavy losses.
Allianz is also invested in hedge funds, real estate funds, bond funds, and other potentially risky financial ventures. This indicates that it has taken on more risk than some other insurers have. The effect these investments could have on the US insurance business is unclear.
Financial Ratings for Allianz
The financial ratings for Allianz appear to be good but it should be noted that ratings from one major financial analysis firm; Fitch's are not available. This could indicate that Fitch's has not reviewed the company or that Fitch's has given it a lower rating. The lack of a rating is not necessarily an indication of financial weakness. The other three ratings companies did give the insurer fairly good reviews. It should be noted that these reviews are for the North American life insurance operation and not for the entire corporation.
Of the other ratings firms, A.M. Best gave Allianz a grade of A or excellent in February, 2011. This is the third highest grade that A.M. Best awards meaning that its reviewers feel there is room for improvement at the insurer. The rating also indicates that it is currently able to meet its obligations to its policyholders and will be able to do so for the foreseeable future.
Standard & Poor's or S&P gave the company its third-highest rating of AA or very strong in August 2010. This indicates that S&P's experts feel that the current economic climate will not affect Allianz's ability to meet its' obligations to customers. The absence of a more recent rating indicates that this rating could be out of date.
The most recent Moody's rating for the company is from August, 2009, which means the financial analysis may not pertain to current conditions. Moody's gave Allianz a grade of A2 or good, this means that Moody's analysts think it is a high grade company but faces some long term risks. The nature of these risks is unknown but the analysis could refer to the parent company's involvement in the asset management industry.
Allianz Life Insurance and Annuities
Allianz currently offers a limited number of life insurance policies and several annuity products in the US. The company's focus seems to be annuities but its website does list three life insurance policies.
All three life policies have accumulation potential but the range of offerings is limited. The GenDex Foundation policy is described as a low cost universal fixed-indexed product. It is advertised as being flexible and having low premiums and good death benefits. Gendex Momentum offers higher more accumulation with higher premiums but details are not available. Gendex Survivor is designed for two people; it pays a death benefit after both individuals die. Indexed crediting options appear to be available with the three policies.
Fixed, fixed-index, and variable annuities are also available. Only one fixed annuity product, the Dominator Plus is described on the Allianz website. The Dominator does give purchasers the ability to select the length of the guaranteed interest rate period. Other fixed-rate products are mentioned but no details are provided.
Six different fixed-indexed annuities are listed. At least one of these, the Endurance Elite appears to be a split annuity. The others appear to be standard indexed annuities.
Two variable annuities are also available. The Retirement Pro appears to be a standard deferred variable product designed as a retirement planning vehicle. It does have a low annual fee of 1% for single and 1.15% for joint accounts, but other fees are not listed. The Vision is another standard product with some options these include a bonus contract that pays a bonus on payments. A low withdrawal fee and no withdrawal fee option are available if purchasers agree to a slightly higher annual fee.
Allianz's products seem to be fairly solid but the company could do a better job of offering information about them. The range of products available seems to be limited compared to other firms. Despite the good financial ratings, Allianz has made some questionable moves in the asset management industry that might point to lower long-term stability that its peers.