Allianz reserves €100m on Ukraine losses, sounds all-clear for AGCS

Allianz wrote nearly €100 million in reserves against potential losses stemming from the Russian invasion of Ukraine, chiefly on trade credits and with only minimal property or specialty exposure, a key official has indicated.

“We think this is solid,” CFO Giulio Terzariol (pictured) said of the figure. “It might even be on the prudent side.”

The bulk of the reserve for Ukraine-Russia losses, at €75 million, comes on the trade credit side at unit Allianz Trade, the recently renamed Euler Hermes.

Exposure at key unit Allianz Global Corporate & Specialty (AGCS) should be quite limited, Allianz believes.

“I would say exposure at AGCS is very limited,” Terzariol said. “Fundamentally we don't expect to see anything major.”

AGCS exposures should almost entirely be covered by war exclusions with only “several exceptions” in political violence or related lines for which Allianz wrote IBNR reserves to the tune of €20 million.

Terzariol fought off suggestion that Allianz looks under provisioned against Ukraine versus peers given its relative size. To Terzariol's eye, AGCS is well protected and trade credit exposure at Allianz Trade/Euler Hermes naturally dwindles quite quickly given the extremely short tenor of policies.

“Exposure can be limited very quickly,” Terzariol said. “Other companies may have a different kind of risk profile.”

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