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Regulatory Disclosures

Company Profile

 

Allianz Global Corporate & Specialty SE Singapore Branch (AGCS Singapore) is incorporated as a branch of Allianz Global Corporate & Specialty SE (AGCS SE). The registered address of AGCS Singapore is 79 Robinson Road, #09-01 CapitaSky, Singapore 068897. AGCS SE is a global company registered in Munich, Germany. The company operates an international network of companies across all continents which reflects the global need of corporate and specialty customers. AGCS SE provides risk consultancy, Property-Casualty (P&C) insurance solutions and alternative risk transfer for a wide spectrum of commercial, corporate and specialty risks across ten dedicated lines of business in eleven regional hubs.

In 2023, AGCS SE focused on growth in its defined target segments and markets and delivered on its strategic goals. AGCS Singapore is a key branch in Asia as it acts as the regional hub for Asia. There is a dedicated team of experts to serve business clients with international activities or specialist risk exposures across the region.

With the initiation of Allianz Commercial in 2023, Allianz aims at accelerating the journey by jointly defining a commercial P&C market proposition for large-corporate business of AGCS and small and medium-sized business covered in the local operating entities of Allianz Group. The setup of Allianz Commercial has been a success so far. The new trading name has been mobilized on a global scope to drive a commonly shared risk appetite and a unified commercial strategy. The delivery on strategic ambitions is on track and collaboration on central investment initiatives have been scoped to core critical initiatives. Focus areas will revolve around fully implementing the central operating model in each region for establishing stronger connections between large corporate and mid corporate business, improving on broker / customer centricity and delivering on tools and productivity measures.

AGCS Singapore continuously reviews the opportunities of growth both locally and across Asia, including emerging areas such as cyber risks and renewable energy. We continually focus on our commitment to improve systems and processes to maximize efficiency and service delivery for the customer. Emerging challenges of the business are more global in nature rather than specific to doing business in Asia, but include an increase in regulation and market competition.

As the regional hub, AGCS Singapore leverages on the core strength of AGCS SE within the corporate and specialty segments, namely, underwriting expertise, product specialty and access to AGCS’s worldwide network and full range of services from risk consulting to claims, to generate sustainable profitable growth.

Corporate Governance

 

AGCS Singapore is part of corporate governance framework of AGCS SE.

 

Please refer to the latest version of the Solvency Financial condition reports (SFCR) under Section B Governance system on General information on the governance system.

Risk Governance

 

AGCS Singapore is part of the risk governance framework of AGCS SE.  Assuming and managing risk is part of the business model of AGCS SE.  Well-developed risk awareness and the careful weighing of chances and risks are therefore an integral part of AGCS SE’s business processes. 

 

The key elements of the risk management of AGCS SE are:

- A strong risk management culture, promoted by a solid risk organization and effective risk governance.

- Comprehensive risk capital calculations with the objective of protecting the capital base and supporting effective capital management.

- The integration of capital needs and risk considerations into the decision-making and management process.

 

This comprehensive approach makes sure that risks are adequately identified, analyzed and evaluated. The risk propensity is described in the risk strategy and made operational by the limit system contained therein. In addition, further limits are substantiated and detailed in specific standards and directives. Strict risk control and the corresponding reports ensure the early detection of any possible deviations from the risk tolerance.

The risk governance framework of AGCS SE also includes the Asset Liability Management (ALM) / Strategic Asset Allocation (SAA) process which is used to address the risk faced by AGCS SE due to a mismatch between assets and liability cash flows, prices, or carrying amounts, caused by a change in actual cash flows, a change in the expectation on future cash flows, or accounting inconsistencies. The ALM / SAA process manages investment assets with specific reference to the characteristics of its liabilities so as to optimize the balance between risk and return expectations within the Financial Frame for Investment Management. Various different asset classes are thereby assessed for their potential to create value.

The SAA translates the outcome from the asset liability assessment, in accordance with the principles set forth in the AGCS Risk Strategy, the AGCS risk appetite and return aspirations into a target asset allocation for the investment strategy. In addition, the SAA / ALM process takes into account the potential impact of investments on ESG factors, in particular risk stemming from trends or events caused by climate change.

Internal Control Framework

 

AGCS SE has implemented the so-called Non-Financial Risk Management (NFRM) framework in the course of 2023 which is an extension of the previous Integrated Risk and Control System (IRCS). Its objective is to identify and manage material operational risks to AGCS SE. AGCS Singapore is a part of the overall AGCS SE NFRM framework.

The framework focuses on inherently significant risks which could potentially have a longer-term adverse effect on the reputation of AGCS Singapore or a significant negative impact on the achievement of financial targets. These significant operational risks (including compliance risks) and their respective mitigating measures are identified, assessed, documented during risk and control assessments on an annual basis.

These operational risks are managed through the establishment of a set of effective mitigation measures (i.e. key controls). A control will be defined as “key control” if the actual risk would be significantly higher in the absence of the respective control. In order to allow for an annual assessment of the effectiveness of the Internal Control System, all key controls are being tested regularly on a risk-based approach, at minimum on a three-year basis. The control testing includes a design test (which ensures that the control conceptionally mitigates the risk) and an operating effectiveness test (which ensures that the control is performed as documented). Both testing aspects can by themselves lead to a control deficiency which needs to be adequately addressed in time. Testing in general should be done by an independent person, ideally within the 2nd or 3rd Line of Defense.

 

 

The responsibility for risk management for AGCS SE within the Board of Management lies with the Chief Risk & Resilience Officer (CRRO).  The Chief Risk Officer (CRO), who reports to the CRRO, monitors the risks assumed and regularly informs the Board of Management of AGCS SE about risk-relevant developments, the current risk profile and capital adequacy. AGCS Singapore’s Managing Director of Finance, Asia and Regional Head of Risk Management, Asia assume the responsibility on AGCS Singapore’s level and reports essential risks to the management of AGCS Singapore.

 

 

AGCS Singapore adopts the key risk categories of AGCS SE. Based on these categories, AGCS Singapore conducts an annual top risk assessment to identify and evaluate the risks faced by AGCS Singapore in executing its business strategy. These are regularly discussed by the Board of Management and, if necessary, risk reduction measures are defined. Every quarter, the list of top risks is reviewed and the measures to be taken are also monitored. The top risks include Volatility risk, Markets/Geopolitical risk and Cycle Management risk.

 

AGCS Singapore monitors and controls the following risk categories:

 

- Underwriting risk describes the deviation between the actual and expected new claims and reserves development.

- Market risk covers unexpected losses arising due to changes in market prices or parameters influencing market prices. In particular, these include changes driven by equity prices, interest rates, real estate prices, exchange rates, credit spreads, implied volatilities and inflation rates.

- Credit risk covers unexpected losses in the fair value of the portfolio due to deterioration in the credit quality of counterparties including their failure to meet payment obligations or due to non-performance of instruments.

- Operational risk result from inadequate or failed internal processes, inadequate or failed systems, human failures or misbehavior of people, external events. Operational risks are inherent to the business, but do not provide a systematic return.

 

Non-quantifiable risks are monitored by means of a structured identification and evaluation process. Some of these are:

 

- Liquidity risk, i.e. risk of unexpected financial loss due to a failure to meet, or to meet based on unfavorable altered conditions, short-term current or future payment obligations, as well as the risk that in the event of a liquidity crisis funding would require liquidating assets at a discount.

- Business risk, i.e. risk of unexpected shortfalls in business volumes leading to a decline in income.

- Strategic risks, i.e. risks of an unexpected negative change in enterprise value as a result of management decisions with a negative impact on business strategy and its implementation.

- Reputational risk, i.e. risk of an unexpected drop in the value of in-force business or value of future business caused by a decline in the reputation of AGCS Singapore from the perspective of its stakeholders.

- Emerging risk, i.e. risk of changes in the business environment of AGCS Singapore leading to unforeseen exposures and losses due to insufficiently understanding and assessing them.

 

As part of AGCS Singapore’s steering activities, management would ensure that the Branch has adequate liquidity to meet payment obligations as they fall due. Short-term liquidity needs are expected to be fully met by available operational cash, the Allianz SE cash pool and maturing term deposits. Mid and long-term funding needs are expected to be funded from cash generated by maturing or sold investments.

Liquidity needs are assessed in normal and stressed conditions and compared to available liquidity at various time buckets as outlined in the AGCS Standard on Liquidity Risk Management. AGCS Singapore complements the legal entity level liquidity risk management of AGCS SE by branch specific requirements and processes. AGCS Singapore does reassess its liquidity risk situation and adequacy of its contingency funding plan on a regular basis, at least annually.

The available sources of liquidity of the AGCS Singapore are its investment portfolio which is investing in highly liquid SGD denominated fixed income investments, and its access to the Allianz SE cash pool with full capacity available as for AGCS SE.

AGCS Singapore also prepares its own risk and solvency assessment (“ORSA”) annually whereby the Branch’s risk and solvency situation are not only assessed over the year and at the end of the year, but also covers the entire three-year planning period.

 

Investment and Assets - Liability Management

 

The AGCS Investment and Asset-Liability-Management Standard of AGCS SE applies to AGCS Singapore.  AGCS SE actively manages its investment portfolio and is actively taking investment risks in a controlled and limited manner. This results in a mid to long-term focused investment policy with an emphasis on strategic asset allocation and the goal of realizing the long-term risk premium of asset classes. Tactical asset allocation is used on a limited basis as an enhancement to the strategic asset allocation in order to profit from market opportunities.

 

The AGCS investment strategy takes these factors into consideration:

- Local as well as group-wide external and internal regulations, and policies

- The risk-bearing capacity and risk tolerance of AGCS’ legal entities / branches

- The general principles of a congruent Asset-Liability-Management

- The return objectives, expectations, and risk tolerance of the shareholders

- The expectations of external parties (e.g. regulators, rating agencies, clients)

 

The investment activities follow the general principles of a congruent ALM with a sufficient duration and currency matching within prescribed limits and have a clear focus on liquid and high quality assets. All technical reserves are supported by investments in cash and fixed income securities.

The investment portfolio duration incorporates a going-concern perspective to mitigate the economic exposure to interest rate risk. Additionally, its maturity profile reflects the expected payment profile of our liabilities.

 

Risk and Solvency Assessment

 

An essential component of the risk management of AGCS Singapore is the Branch’s own risk and solvency assessment.

 

The Branch’s risk and solvency situation is summarized at least once per year in a separate report as required by MAS Notice 126 – Enterprise Risk Management (“ERM”) for Insurers. 

The Branch complies with the supervisory capital requirement showing a capital ratio of 192% as at year-end 2024. All capital management processes proved to be effective.

 

Financial Reports

 

The Branch prepares its audited financial statements based on the Singapore Financial Reporting Standards and will be available at The Accounting and Corporate Regulatory Authority’s (ACRA) website, (acra.gov.sg). The financial statements will cover key information such as valuation methodology of assets and liability and management of liquidity risk, credit risk, currency risk, interest rate risk, equity risk, insurance risk and capital management.

Additionally, the Branch’s annual regulatory returns contains information on the Branch’s financial performance segmented by insurance funds. The annual regulatory returns will be available at The Monetary Authority of Singapore’s (MAS) website. 

 

More about our office in Singapore