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JournalInternational Edition 1 | 2014

ALLIANZ GROUP

12 Between Tangiers and Istanbul Turning the tide in the Mediterranean?

26 Viking heirs Norsemen on a peaceful mission

Hope after the civil war Allianz in Sri Lanka

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Allianz Journal 1/2014

“Beauty is an iron mine”: Australia’s richest woman shakes up the Australian mining industry

On the road to customer surveillance? Insurance products in the age of digital self-exposure

26 Viking heirs Norsemen on a peaceful mission30 Safe investment The quest for returns 33 Turning point Allianz Poland changes direction36 Under pressure Allianz Poland CEO Witold Jaworski on price

wars, self-image and missed opportunities AUSTRALIA38 The Iron Lady’s biggest coup

Gina Rinehart shakes up the Australian mining industry

ASIA41 Hope after the civil war

Allianz in Sri Lanka46 Hero, cripple, superman

Pradeep Sanjaya – Sri Lanka’s first paralympic medal winner

SOCIETY48 Dixie music and tomatoes

New Orleans – city of gardeners

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They risk their lives to reach Europe. Many don’t make it

Allianz Group Journal 1/2014 (February)

Employee magazine for Allianz Group companies

Published by Allianz SEOverall responsibilityEmilio Galli-ZugaroEditor-in-chief Frank Stern (fs)Layout volk:art51Production repromüller

Editorial addressAllianz SE, Allianz Journal Königinstrasse 28D-80802 MunichTel. +49 89 3800 3804 journal@allianz.com

The paper used in the publication of Allianz Journal is manufactured from wood from sustainable forests.

Contents

I MPR I NT

Keeping their cool: the emergency team from Allianz Global Assistance steps in when the going gets tough

AROUND THE WORLD4 News from the Allianz Group

OPINIONS9 War at Europe’s gates

Migration researcher Klaus Bade on the gulf between north and south

GLOBAL12 Between Tangiers und Istanbul

Turning the tide in the Mediterranean?16 Growth in Israel

Euler Hermes boosts its portfolio

EUROPE18 Ambassadors on their own account How Allianz encourages employees to buy

its products21 A matter of life and death Lifeline in Munich-Riem24 “We don’t profile clients” Alexander Vollert on trust, privacy and

customer surveillance

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Last September, 15 young people from Ireland, the UK, Germany, the Czech Republic, Australia, Italy, the Nether-lands, Brazil and the USA took part in the first Allianz Golf Camp at St Andrews Links in Scotland, the “home of golf”. The novices and their adult mentors were given the opportunity to train with distinguished players of the sport. Dur-ing the sessions, each player’s golf swing was filmed and later analyzed.

The five-day camp was supervised by Steve North, head trainer at St. Andrews Links Golf Academy, and the Spanish professional golfer Beatriz Recari. The group also competed in tournaments and putting contests, and practiced how to get out of difficult situations, such as sand bunkers. Henceforth, the Allianz Golf Camp will be held once a year.

First Allianz Golf Camp

Money manager on a cell phone

Electric fleet

My Finance Coach (MFC), a financial literacy initia-tive launched by various companies including Allianz, has developed an

app to help young people keep track of their expenses. The app, called MFC Geldmanager (MFC Money Manager), also helps users plan a budget. Divided into categories such as clothes, food and drink, pocket money, job and savings, the app, which is free of charge and advertisements, provides a clear overview

of income and expenditure. Payments made on a regular basis, such as monthly pocket money can be automated as serial entries. There’s also an analytical function that tells users what they have spent their money on every month, and a function that provides information on their personal bank balance. The app is available for Android phones or iPhones.

Allianz in Munich has added one of the first electric cars from the BMW i3 series to its fleet. Board member Oliver Bäte (photo) picked up the car in November last year at BMW World in Munich. Around ten percent of the Allianz fleet is now electric.

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Amazon shopping trip Since last November, customers of Allianz France whose household effects are damaged or stolen can buy replace-ment items from Amazon. Instead of traditional loss compensation, Allianz Replacement Solution allows clients to purchase items such as appliances, jewelry, clothing, books, CDs and fur-niture on credit directly from Amazon’s online store, without first having to wait for a loss adjuster.

W W W. A L L I A N Z . F RW W W. A M A ZO N . F R

IBM pools resourcesIBM will be acting as the global provider of IT operations services for Allianz with effect from April 1, 2014, supporting the transformation of the company’s global IT infrastructure. Allianz currently has 140 data

centers worldwide and plans to consolidate and reduce these to six locations. The aim is to enhance performance in

the event of a disaster and to improve operational efficiency and service quality. Another goal of the

program is to further increase data security levels. Exclusive control over data access

remains in the hands of Allianz. The concentration of local data process-

ing centers into a global IT infra-structure operation is expected to take place in three waves and is to be completed by 2017.

W W W. A M O S . A L L I A N Z .C O M

Last September, Allianz moved into its new Asian head office in Singa-pore’s financial district. The offices of eleven subsidiaries, occupying 7,300 square meters, are situated on three floors with space for over 500 employees. AMOS led the overall re-location project, including site selec-tion, office design and supervision of construction management. Allianz is currently active in 14 countries in the region, with a total of 35,000 em-ployees serving the needs of more than 20 million customers. Experts predict that premium income in Asia’s insurance sector will grow by around eight percent annually over the next decade. By 2020, the region is expect-ed to account for 40 percent of global insurance business.

Eleven under one roof

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W W W. A L L I A N Z . F R

A Z G RO U P I N T R A N E T (G I N) → A L L I A N Z S E → A L L I A N Z G RO U P O P E X

Top French athletes can now start a second career in sales at Allianz France. The sponsorship program Athlètes et Carrières (athletes and careers), launched last September, targets athletes – disabled and able-bodied – who are still active as well as those who are seeking new horizons or have already retired from sport. The initiative aims to apply their motivation, drive and stamina, essential qualities in sport, to sales. Athlètes et Carrières is geared to each athlete’s situa-tion, providing tailored support to ensure a successful outcome for both parties – a win-win situation, or gagnant-gagnant, as they say in French. Allianz France plans to fill five percent of its job vacancies every year with top athletes.

Last December, seven finalist teams from Brazil, China, Germany, Korea, the UK and the USA competed in the 2013 Allianz OPEX (Operational Excellence) Quality Awards in Munich. The “OPEX Project of the Year” award went to Allianz Brazil for its Fast Customer Care Center. Sajulal Sudhakaran from ACIS India received the “OPEX

Practitioner of the Year” award for the commitment, enthusiasm and creativity he has shown in his work. The 10th OPEX Quality Awards will be held on 4th and 5th December of this year in Munich.

Gagnant-gagnant

Allianz Global Corporate & Specialty (AGCS) is the leading reinsurer for the construction of the Kingdom Tower in Saudi Arabia. The kilometer-high sky-scraper will be more than 170 meters taller than the Burj Khalifa in Dubai, currently the tallest building in the world. The insured value is USD 1.5 billion, and the premium for AGCS is around USD 670,000. The gi-gantic tower will house offices, apartments and a hotel. It will form the centerpiece of King-dom City, which is to be built on the north side of Jeddah on the Red Sea. The plans include con-struction of the world’s highest viewing platform at 502 meters. It is expected that construction will be completed by 2019.

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AGCS at the top

The Allianz Brazil team won the award for Project of the Year

At 1,000 meters, the Kingdom Tower will be the world’s tallest building

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Quality Awards 2013

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AWARDS

Allianz Italia has been inducted into the Hall of Fame of consultancy firm Palladium. The accolade is bestowed on companies that have stood out for their excellent business achievements, for their strategy development and execution, for their leadership commitment and for the employees’ engagement. Allianz Italia is the first Italian com-pany and the first among international insurers in the world to be inducted in the Hall of Fame, where it joined renowned international groups such as AT&T, Cisco, Siemens, BMW, HSBC, Canon.

Allianz Life Korea has been awarded with the Seoul Mayor’s Prize for its Social Responsibility programs.

Allianz Seguros has received the award “Equality in Business” from the Spanish Ministry of Health, Social Services and Equality. The award is given every year to companies that have relevant policies related to diversity and gender equality.

Allianz Slovenská has been voted the most successful financial services provider in Slovakia in 2013 in the Golden Coin Competition, winning in all insurance categories. It also won an award for being the most customer-friendly company and for having the best product of the year. 

Allianz Hungary was named best casualty insurance provider at the Service Quality Competition 2013 of the Association of Independent Insurance Brokers in Hungary. 

According to Transparency International, Allianz Hungary is the most transparent financial services provider in Hungary. Overall, Allianz ranks fifth across all sectors. For its ranking Transparency International reviewed Hungary’s 50 biggest companies in 16 sectors.

Euler Hermes and Sinosure have been named best credit service providers in China at the 10th China Credit and Risk Management Conference.

Peter Lefkin, Senior Vice President of Government and External Affairs for Allianz of America, received the Goodness Award by the Jewish Foundation of the Righteous for his work on the International Commission on Holocaust Era Insurance Claims (ICHEIC).

W W W. A L L I A N Z .C O M | W W W. F O R D. E U

Cooperation with Ford

Allianz and carmaker Ford plan to expand their business relationships over the next five years on the European level. The two companies made the announcement at a press conference in Cologne in December. It is Allianz’s fifth strategic partnership with a carmaker following agreements with BMW, Daimler, PSA Peugeot Citroen and Volkswagen. The two partners plan to pool their mobility expertise and experience. For instance, project teams from Ford and the Allianz Center for Technology (AZT) will examine how driver assistance systems can improve vehicle safety and optimize insurance cover.

Another aim of the partnership is to establish a link between connected vehicles and insur-ance. For example, the widespread use of internet-based modules in the automotive industry could bring about new insurance models with greater emphasis on driving behavior. Such telematic products have al-ready been introduced in some markets. But this know-how transfer is also supposed to have an impact on vehicle development, for example in determining how effective safety systems are, based on accident statistics.

AGCS becomes European

Allianz Global Corporate & Specialty AG has merged with its subsidiary AGCS France to become a Societas Europaea (SE). The new legal form, which will help streamline the com-pany’s structure, will have no material effect on the contracts or policies of AGCS customers. Nor will there will be any chang-es with regard to operational services or market facing contacts.

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Opinions

INTERVIEW: MICHAEL GRIMM

First they are exploited in their own country. Then they are shunned at the gateway to the affluent world. The tragedy of refugees off the coast of Lampedusa last October is just one of many, demon-strating how wide the gulf between north and south has actually become. Nonetheless, Europe is particularly dependent on the influx, says migration researcher Klaus J. Bade.

War at Europe’s gates

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H T T P S://U M W E LT S T I F T U N G . A L L I A N Z . D E

The Allianz Environmental Foundation has adopted the Swabian Alps Biosphere Reserve, and has earmarked a total of one million euros for sustainable regional devel-opment over the next ten years. Particular attention will be given to the interplay between the economy, nature conservation and society. As part of the initiative, com-panies and service providers committed to environmental and nature conservation can be certified as partners of the bio-sphere reserve and use their certification for promotional purposes. They, in turn, agree to act as ambassadors of the region and abide by prescribed quality criteria in the areas of service, production as well as nature and environmental conservation.

A million for Swabian Alps

PERSONALIA

George Sartorel, former CEO of Allianz Italy, has been at the helm of Allianz operations in Asia-Pacific since January. His post in Italy was filled by Klaus-Peter Röhler, former CEO of Allianz Suisse.

Severin Moser, former Chairman of the Board at Allianz Versicherungs-AG in Germany and board member of Allianz Deutschland AG, became CEO of Allianz Suisse in January. His successor is Alexander Vollert, previously board member and Chief Operating Officer of Allianz Deutschland AG. Manfred Knof has taken over Vollert’s previous functions, in addition to his responsibilities as board member in charge of Operations and Claims at Allianz Deutschland AG.

Higher participation The global response rate for last year’s Allianz Engagement Survey has increased again compared to the previous three surveys and stands now at 84 percent, three percent up compared to 2012. 72 Group companies offered the survey to a total of 119,230 employees with 99,815 respondents. In 2010, the year of the first employee survey, the participa-tion rate was just 69 percent. The Employee Engagement Index (EEI), which measures employee satisfaction, commit-ment to the company, pride in working for Allianz and advocacy for Allianz, has also risen for the fourth consecutive year and reached 73 percent, up from 70 percent in 2012 (67 percent in 2011, 66 percent in 2010). In 2013, 40 Group companies were above the 73 percent Group EEI level. The individual EEIs ranged from 49 to 89 percent.

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How can the reasons for fleeing a country be tackled effectively? Migration pressure can only be relieved in the countries of origin themselves. But in many African states there is an unholy alliance between non-African business interests and corrupt African leaders.

How would this play out in practice? Donated European clothing arrives on African textile markets, putting pressure on the African textile industry – an industry that was once the source of the industrial revolution in Europe. Cheap European agricultural imports are destroying African farming. And enormous fish factories operating off the West African coast have put an end to West African coastal fishing – fish in below, tins of fish out at the top. With the exception of South Africa, natural resources – from oil to precious minerals – are usually exploited by non-African corpo-rations. And a lot of good land in Africa is owned by non-African companies, which have set up so-called special economic zones or free production zones with chartered rights to engage in business activities.

Would more development aid be a way to integrate those countries in the global economy?Let’s take Africa as an example again. All too often it is African elite leaders who sign all these contracts and arm their private armies with development aid money, when it’s not diverted directly to Swiss bank accounts or invested in expensive European real estate. Conventional development aid is a dinosaur anyway. It is estimated that, globally, three times more money is transferred by family members working abroad than is provided by development aid.

The USA is seen as the ultimate destination for migrants. What can Europe learn from North America?Historically, the two are hardly comparable, because the United States came about as a result of immigration. But we can still learn some lessons, for instance with regard to greater initiative on the part of immigrants. In many European welfare states the mechanism of self-selection for immigration has been switched off. The USA also has social protection mechanisms for immigrants, but the old principle is still evident: If you can’t stand on your own two

feet financially, you should go back where you came from or move on.

South-south instead of north-south: is there any sign that the developing countries will stabilize themselves?Some are already doing so, such as South Korea and Vietnam. In both cases there’s strong economic growth, in South Korea even an astonishing increase in GDP. 50 years ago the country was still a poor agrarian state. Today it is one of the fore-most economies in the world. But similar conditions for development are not present everywhere.

Population movement has existed since time immemorial but not national borders. How do we deal with migration when the trigger is global – climate change, for example? The only answer would be global resettlement programs. But it would make more sense to limit the factors driving climate change instead of reflecting on its migratory consequences.

“In many African states there is an unholy alliance between non-African business interests and corrupt African leaders.” Prof. Dr. Klaus J. Bade

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is absurd because the comfortable situation enjoyed by Germany in the middle of Europe with its comparatively low number of asylum seekers is a thing of the past, as shown by the number of applicants this year, which may exceed the 100,000 mark. The only hope of change is if Europe can move away from sharing the burden to sharing refugees. For this we need a key for contingents or quotas and a European migration agency to take over implementation in agreement with the member states.

Recently, there has been talk of fast tracking at least well-educated asylum seekers to mitigate the pressure of migration. Could you explain this idea?It would operate on a points system. Migrants would have to apply from abroad. Decisions would be made on the basis of transparent criteria such as qualifications, work experience and language skills. It could stop many from choosing the illegal and dangerous route to Europe. Refusing to take illegal immigrants would be more legitimate if there were defined legal migration paths. Fuzzy distinctions between economic migrants and asylum seekers would only be acceptable in exceptional cases. Otherwise the asylum procedure would become a migration gateway and even more qualified people would set out in boats. As well as opening legal migration paths, it would then be even more important to examine the reasons why an individual is seeking asylum.

many as in your average war. And now the European border control agency FRONTEX is to be empowered to divert barely sea-worthy migrant vessels on the high seas in international waters or to force them to go back to where they came from. That’s a violation of human rights and a crime against humanity.

Has Europe exhausted its intake capacity?Quite the contrary. Europe is a demographi-cally aging and shrinking continent that is reliant on constant immigration. But in the case of legal immigration, European countries must have the right to choose their immigrants. Of the 45 million refugees worldwide, almost 90 percent remain in their country of origin, most, in fact, as internally displaced refugees within the borders of their own country. Five percent at most head for Europe.

The countries on the periphery of Fortress Europe complain of a lack of support from Brussels. What form should a future European migration policy take? The Dublin System, which determines that the EU member state responsible for the asylum procedure is the state through which the asylum seeker first enters the EU, is effec-tively dead. The end result of Fortress Europe has been to make migrants illegal and to engender a job creation scheme for human trafficking networks that act like shady travel agencies. Germany has put a brake on attempts to change the Dublin System. This

Money corrupts, so they say. Has Europe become too wealthy to understand the hardship of people outside its borders? There are poor and crisis-torn states and societies in Europe too, but European states and societies are all relatively well off compared to the dire situation from which many migrants flee. Many Europeans have forgotten that this continent itself produced some 80 million migrants in the 20th century. If we called asylum seekers in Germany “refugees and migrants”, for instance, perhaps we would show them more empathy by recalling the suffering that the Germans first created, then had to endure themselves.

Do the tragedies off Lampedusa that happened last year mark the beginning of a huge migration wave from Africa and eastern Europe?Lampedusa is synonymous with just two of many refugee tragedies in the Mediter-ranean, but they are not unique to that part of the world. Disasters often occur along illegal routes into Australia as well. Migrants who manage to get through are isolated on distant islands as illegal migrants by the Australian authorities to deter others from following in their footsteps. I don’t expect a huge migration wave, but there will be persistent migration pressure from Africa and eastern Europe. And I expect a further escalation of the war against migrants at Europe’s borders, where some 20,000 people have already lost their lives – as

U P C L O S E A N D P E R S O N A L

Migration researcher, publicist and political adviser,

Professor Klaus J. Bade was the founding chairman

of the Advisory Committee of the German Founda-

tions for Integration and Migration until 2012. His book:

Kritik und Gewalt. Sarrazin-Debatte, ‘Islamkritik’ und

Terror in der Einwanderungsgesellschaft, (Criticism and

Violence. The Sarrazin Debate, “Islamic criticism” and

terror in the immigrant society), Schwalbach Ts. 2013,

was published a few months ago.

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It’s the two extreme poles – Morocco in the west and Turkey in the east – that currently present a less gloomy picture of the Mediterranean region. While Spain, France, Italy and the Balkan states struggle with the aftermath of the financial crisis and North Africa and the Middle East with the repercussions of the Arab Spring, the Moroccan kingdom and the Turkish republic have escaped rela-tively unscathed from the crises around them, at least in economic terms.

In its special report “The Mediterranean: Turning the Tide” published last August, Euler Hermes, the world’s biggest credit insurer, examines the stark contrasts in the region as well as its enormous opportunities. The authors attribute the greatest development potential to Morocco and Turkey as well as the Gulf states, which are also included in the Mediterranean region by dint of their close economic ties.

Whereas political risk factors in countries such as Egypt, Libya, Tunisia and Algeria are inhibiting an economic upturn, the United Arab Emirates, Saudi Arabia, Turkey and Morocco currently offer the best opportunities for trade and development. Not surprisingly, this group is among the 20 countries that are the most closely inte-grated in the global transport network, according to Euler Hermes. Morocco stands in third place in the rank-ings after China and South Korea.

The authors of the report predict that supply and demand in these model states will increase sharply in the coming years, thanks not least to a growing popula-tion, whereas they will remain more or less stagnant in the southern European states in the mid-term. Forecasts indicate that Morocco’s and Turkey’s GNP will nearly double by 2022.

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Since time immemorial, the Mediterranean Basin has been the setting for encounters, trade and war. Today, its coasts are hotspots of political, economic and social upheaval. This is the frontline between North and South, between hope and resignation. As a credit insurer, Euler Hermes acts like a seismograph for developments in the region.

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economy, whose structure is comparable to that of Euro-pean countries but is performing much better currently. One reason may be that as a high-tech powerhouse, Israel is less reliant on trade with Europe than its Arab neighbors. Euler Hermes predicts growth of a good four percent for the Israeli economy in the current year.

Return to growth path

In April 2013, the Allianz subsidiary bumped up its share in the Israeli Credit Insurance Company (ICIC), a joint venture with Israel’s third-biggest insurance group, Harel, from 33 to 50 percent. “It fits in well with our growth strategy in the Mediterranean region,” says Euler Hermes CEO Wilfried Verstraete. Between 2007 and 2012, ICIC increased its premium income from EUR 16 to 28 million. Israel’s leading credit insurer insures credit in 115 coun-

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Euler Hermes index of integration into global transport networks(Top 20, 100 = highest ranked country)

China

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United Arab Emirates

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tries. Many well-known companies in the country are among its 500 clients (see also adjacent interview).

Euler Hermes expects the Mediterranean region to return to its path of growth in 2014. Although European neighbors will barely manage a half percentage point growth, the other countries should grow by over four percent. According to Euler Hermes, there is not much hope for a steep upswing in southern Europe in the mid-term either: one percent on average until 2020._fs

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countries, i.e. 35 cents per dollar recovered by creditors in reorganization, liquidation or debt enforcement pro-ceedings, compared with 70 cents for OECD countries. Recovery times are roughly twice as long as in OECD countries too (3.3 versus 1.7 years on average).

The financial crisis has exacerbated the already difficult situation, particularly in the North African states because of their strong dependence on the eurozone for their exports. Between 2008 and 2012 Algeria’s exports fell by 28 percent and Tunisia’s by 11 percent, while Morocco’s rose slightly by 0.5 percent and Turkey’s soared by 15 per-cent. The two latter states are also the preferred target area for Foreign Direct Investments from the eurozone, particularly from France, Germany, the Netherlands, Spain and the UK.

Morocco has so far proved resilient to the current tur-moil in North Africa, and it wants to expand its position even further. Thanks to the Tangier-Med 1 port complex, which was opened in 2007, the kingdom has become the transshipment point for some of the world’s biggest container shipping companies, such as Maersk Line and CMA CGM. The next phase, Tangier-Med 2, will begin in 2015. By that time a 1,800-kilometer highway should connect all the cities with more than 400,000 inhabitants in the country. Plans are also underway to build hydro-electric dams and expand airports.

Even if Mohammed VI has little appetite for revolu-tions, he is a forerunner in one area: the Moroccan king intends to kick-start his country’s energy transition and meet over 40 percent of energy needs from renewable sources by 2020. Due to a lack of raw materials, Morocco burns gas from Algeria and coal from South Africa to generate electricity. Solar energy and wind farms – there’s sun in abundance and the Moroccan coasts are some of the best sites in the world for wind turbines – should drastically reduce the country’s dependence on imports in the future.

Israel has special status in the Middle East as the only country with a functioning democracy and a robust

By contrast, labor productivity in the Middle East and North Africa – with the exception of Turkey and Qatar – has lagged way behind that of Europe. Between 1999 and 2011 productivity actually fell by between two percent (Saudi Arabia) and four percent (United Arab Emirates). According to the study, the MENA region (Middle East and North Africa) also lacks innovative strength, remains susceptible to social and political dislocation and offers a relatively weak structural business environment. A paucity of innovative skills can also be concluded from govern-ment expenditure for research and development. Israel, for instance, invests 4.4 percent of its GDP in this sec-tor, the highest percentage in the world, in contrast to Tunisia (1.1 percent), Turkey (0.8 percent), Morocco (0.6 percent), Egypt (0.2 percent), Saudi Arabia (0.1 percent) and Algeria (0.1 percent).

Structural weaknesses

Overall, the business environment in the MENA countries shows structural weaknesses. Recovery rates in cases of insolvency are half the average of those in OECD

Research and development spending(% of GDP)

Sources: World Bank, Euler Hermes

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Mr. Verstraete, what differentiates ICIC from others in the market and what are its strengths? ICIC, the Israeli Credit Insurance Company, is headquartered in Tel Aviv and has been insuring credit since 1957. It today insures sales totaling over USD 14 billion annually, in both local and foreign trade transactions. ICIC is now jointly owned by Euler Hermes and Harel Insurance Investments, which was founded by German immigrants in 1935. ICIC insures credit exposures for Israeli exporters in 115 countries. The company’s 500 policy-holders include many of the leading compa-nies in Israel and their subsidiaries around the world. ICIC works hand in hand with leading reinsurers around the world and has an Israeli Aa3 rating.

Why didn’t Euler Hermes start its own company in Israel?Launching your own company is one possible strategic approach. In this case, the initial combination of three companies created a stronger company locally than we could build in a short period of time. And we recog-nized the high quality and strong experience of the management team already in place at ICIC. There was also a good business culture fit. Today, Euler Hermes’ global risk under-writing expertise and Harel’s extensive local distribution network as the third largest

insurance group in Israel provide ICIC with strong partners to support its clients in their business development. ICIC employs 55 people, is Israel’s leading credit insurer and offers a complete range of credit insurance and trade finance solutions. The collaboration with ICIC since 2007 has been excellent, and is also reflected in ICIC’s strong business re-sults. Between 2007 and 2012, ICIC turnover increased from EUR 16 to 28 million. This is why we increased our investment consistent with our Mediterranean basin growth strategy.

What makes Israel interesting as a market? What are the basic indicators for the future development of the economy? The World Bank categorized Israel as a high-income economy, and per capita GDP in nominal terms is currently estimated at over USD 33,700 per year. Although output is diversified, exports focus on manufacturing, particularly from the high-technology sector, but also include worked diamonds. With close links to the US (accounting for one-third of Israeli exports and one-fifth of

Last year, Euler Hermes, the trade credit insurer of Allianz Group, increased its shareholding in Israeli credit insurer ICIC from 33 percent to 50 percent. We spoke to Euler Hermes CEO Wilfried Verstraete about the reasons behind this deci-sion, the peculiarities of the Israeli market and about Euler Hermes’ outlook.

Growth in Israel

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imports) GDP growth is also closely cor-related with the US business cycle. Following two good growth years in 2010 and 2011 (up 5 percent and 4.6 percent, respectively), the GDP growth curve flattened out a bit with 3.2 percent in 2012 and 3 percent in 2013. Euler Hermes expects 4 percent again in 2014.

What are the main economic growth drivers in Israel? Currently it’s construction, infrastructure projects and the nascent natural gas indus-try. Low interest rates are also supporting growth. However, the export-dependent economy is expanding below its potential, reflecting the slow global recovery and the impact of some austerity measures, includ-ing state expenditure cuts and tax increases.

What are the main business risks? What’s the current number of insolven-cies in the Israeli economy?The business environment is pro-market and generally supportive of commercial activity and trading prospects, although the

state retains direct interests in some sectors. Overall, the World Bank “Ease of Doing Busi-ness” 2013 survey ranks Israel 38th out of the 185 countries assessed. The law is upheld and there is consistency in the protection of property rights. In 2012, there were 5,000 insolvencies and 10,432 cases of liquidation/receivership. These numbers represent a 34 percent increase in insolvencies com-pared to the previous year and a 27 percent increase in liquidation/receivership.

The key to credit insurance is having the best information about companies, sectors and economic trends. Do you carry out your own research or do you rely on ICIC’s expertise?ICIC is centralizing all the research activity related to Israeli companies. This also includes all of the export activities to Israel from other countries.

What’s the credit insurance business volume in Israel? How does it compare with other countries?

We measure the penetration rate in our industry by comparing total credit insurance premium to the total GDP. The penetration rate in Israel is therefore 0.035 percent, which is lower compared to the penetration rate in Europe but higher than the penetration rate in the USA. We therefore see a nice potential for growth in Israel in the coming years.

What do the forecasts say about import, export, domestic demand and trade in Israel? External trade is critical for such a small country with limited natural resources to exploit. Total exports are equivalent to almost 31 percent of GDP and total imports are over 33 percent. Israel has a significant high-tech sector and the export base reflects its com-petitive advantage. At more than 4 percent, Israel has the world’s highest ratio of R&D expenditure to GDP, enabling the growth of a strong scientific environment and develop-ment of high-tech exports of goods and services. Deterioration in the current account balance largely reflects the weak global eco-nomic environment, which reduced demand for Israel’s exports, while import demand remained relatively buoyant. Although export revenues from the country’s nascent offshore gas sector are unlikely in the forecast period, they offer scope for substantial revenue gen-eration going forward._fs

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Ambassadors on their own accountIt’s always an advantage if sales personnel who praise the products they’re selling also value those products themselves, whether cars or insurance policies. So it’s understandable that Allianz encourages its staff to buy their own products. But that doesn’t always run like clockwork.

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Eighty percent of Allianz employees in Germany have taken out at least one insurance policy with the company they work for. In Switzerland that figure is 82 percent, in Austria and Italy 85 percent. That’s pretty good, but by no means the rule in the Allianz Group. In Ireland and the UK for instance, the rate is just 40 percent. “Not a great image,” says Joe Gross, head of Market Management at the Allianz Group. “If our own people don’t buy our prod-ucts, why should our customers?”

Since Allianz board member Werner Zedelius put the matter on the agenda a year ago, a team headed by Martin Wricke – at Allianz SE responsible for insurance markets in Germany, Switzerland and Austria – has been tasked with finding out why the popularity of Allianz products among its own staff varies quite consider-ably. The team is also working with colleagues at the local companies to find ways to increase quotas. Price of course is important to consumers, but many people aren’t aware that there’s an employee discount of up to 50 percent, depending on the country and the product.

But this isn’t the only reason why some Allianz employ-ees look for other pastures instead of buying their own products.

As surveys at Allianz companies around the globe have shown, employees are sometimes reluctant to sign the blue-headed policy because of the design of the pro-duct and occasionally because they are unsure about how to access the special offers. This may explain why their willingness to recommend Allianz products to others leaves much to be desired in some countries. In Germany, only 70 percent of employees would bang the drum for Allianz products among family members and friends. In Korea, the Netherlands, France and Turkey it’s even lower. The average in the Allianz Group as a whole is 78 percent.

The Allianz Management Board would like to see em-ployees’ willingness to recommend Allianz products reach 90 percent in the mid-term, a wish that is not so much prompted by concerns about the public appearance of

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and at Euler Hermes, for example, employees have already been asked about their experiences.

And the project team has already discerned a weakness. Belgium, Germany, Austria and Switzerland have sales teams dedicated to employee business. In Italy, employ-ees have special sites on the Intranet to buy products. However, at other companies it is not always clear whom an employee should approach if he or she is interested in buying an in-house product. “We need to make sure that employees have dedicated access to special offers through all available channels,” says Wricke, “as we do for our external clients.”

The internal customers must be convinced of the quality of the products, just as external ones. Targeted advertising campaigns for Allianz staff should help in this respect. Allianz Germany is already taking advantage of induction days for new employees to make them aware of the company’s products. Allianz Romania organizes roadshows with product marketing at various sites, and Allianz Asset Management advertises for a special fund platform it has developed for employee business in Germany and the USA – without service charges or custodian fees.

Some subsidiaries have already taken steps to ensure that employees become ambassadors on their own account. At Allianz in Spain, Portugal and India the rate of employees who are willing to recommend Allianz products to others stands at 95 percent and in Mexico at 96 percent. But the undisputed leader is Argentina, where 97 percent of employees recommend Allianz policies to family and friends._fs

the company. Unlike an Audi parked outside the BMW headquarters, it isn’t obvious in the insurance industry when employees are shunning their own products and buying them from elsewhere. What is obvious is that those with Allianz policies have a greater bond with their own company and sound more convincing to their clients – and they’re also more successful.

To stimulate employee business, Joe Gross and Martin Wricke and their team aim to dispel a few myths that stubbornly prevail in sales, as well as among the internal clientele. “It isn’t true that losses are incurred in general because of discounts granted,” says Wricke. And empiri-cal data doesn’t support the theory that overly generous discounts encourage employees to buy either. If discounts are too low, demand plummets but if discounts seem inexplicably high, customers are frightened off too because they wonder what’s wrong with the product.

“One thing is clear,” says Wricke, “in-house sales are not a foregone conclusion. We have to win over our employees as clients and convince them of the advantages of Allianz products.” To find out what may be stopping them from buying their own products, the annual Allianz Engage-ment Survey should in future include questions about in-house products and services. “People working in the industry know what they’re talking about of course,” says Wricke. “That’s why internal feedback is particularly im-portant to us.” In Germany, Switzerland, Austria, Ireland

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A matter of life and deathThey spring into action when the going gets tough: when a fractured pelvis cuts short a cruise, when a woman unexpectedly goes into labor on a trip to the USA or when a motorcycle trip through Asia ends in the morgue. We paid a visit to the emergency helpers from Allianz Global Assistance Germany.

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For Helmut Gernheim*, who fell from a roof terrace in Peru and sustained a spinal fracture, the assisters in Munich arranged transport to a clinic in Vienna. “We sent a doctor to Peru, who saw to the patient and his distraught wife,” said Beatrix Grohn. “We also had a complete hospital bed fitted in a KLM plane which then flew the man home.” Cost with hospital treatment: EUR 35,000.

Roller coaster ride

The AGA team in Munich organizes repatriation of injured and sick people by plane around 400 times every year. Trans-port varies from a four-seater Lear jet, which can be a rough ride, to a Lufthansa Airbus with an integrated intensive-care cabin for critically ill patients. To get a better picture of her team’s work, Beatrix Grohn climbed into an ambulance plane herself last year to accompany a woman with a complicated femoral neck fracture from Sardinia to Germany. The flight over the Alps was a rollercoaster ride: the air in the cabin was stifling and the pilot, doctor and patient were bathed in sweat. “It wasn’t exactly fun,” said Grohn.

She’s also unhappy with the number of exorbitant medical bills that end up at the AGA head office in Munich. “Practically none gets through without being queried,” says the graduate in social sciences. “The attitude in many hospitals is that if the insurance company is paying, then it can fork out a bit more.” In one case x-rays of a male hand with several fractures were

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sent as proof of treatment – of a female patient with a lacera-tion; pills are invoiced in such large quantities that they could tranquilize a horse; a man who only suffered bruising to the ribcage was to get a stent inserted into his heart. “Some things border on grievous bodily harm,” says Grohn.

Fortunately, before payment is approved, she has numerous doctors on the team to sift out items that sound like they’re paying for hospital renovations. “There’s a reason why we advise our customers never to let their passport or credit card out of sight,” says Grohn. “They are a lucrative source of money and are liable to be misused – and not just in the South Seas.” Some Alpine clinics can turn even a simple ski-ing accident into a complicated – and expensive – saga too.

But it isn’t just creative accounting by hospitals that drives up the cost of travel insurance. Demographic changes also play a role these days. “People going on vacation are getting older, and even the ones with pre-existing illnesses aren’t staying at home anymore,” says Grohn. Greater vitality in the elderly is of course a good thing, but these clients are more vulnerable: “Knowing that in an emergency they’re well insured, they tend to take greater risks than before.”_fs

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A grey building on the edge of Munich. On a clear day you can see the Alps from the top floors. It’s wintertime, and on the alpine ski slopes arms and legs are being broken, tendons pulled and ankles twisted. It’s high season for the men and women at Allianz Global Assistance (AGA) Germany, who arrange medical assistance from their control center for these unlucky souls.

Eight German travel and health insurers rely on the Allianz Global Assistance network, including their biggest client, Allianz Germany, although emergency travel assistance covers only part of the AGA spectrum. The company generates half its annual earnings of EUR 10 million from household services for Allianz Deutschland’s accident insurance customers – from food deliveries to cleaning. Surveys have shown that 98 percent of those who use these services would recommend them to others. In the Allianz Group that’s an undisputed top rating – which unfortunately gets a little lost among all the rescue stories from exotic places.

Well balanced

But the Medical Emergency Services are also highly rated by customers – at 85 percent, even though it’s probably one of the most difficult jobs in the insurance business: rescuing people somewhere in the world from an emergency situa-tion, reassuring worried relatives, discussing treatment with hospitals and doctors and negotiating the cost, as well as arranging rescue flights and even transporting a body. This all demands organizational talent, sensitivity and negotiating skills on the part of the ground staff. “Our colleagues need to be well balanced to handle what they experience on a daily basis,” explains Beatrix Grohn, head of Medical Assistance at AGA Germany.

Grohn’s colleagues – doctors, travel agents, business econo-mists, accountants and one or two linguists – are often the last lifeline when something happens far from home that isn’t printed in the travel brochure. Over 6,000 times a year they make use of their worldwide net of service providers to help insured customers in emergency situations. Take, for example, the 85-year-old woman who two years ago fell down some steps on a Pacific cruise and broke her hip. It was the end of the cruise for her – and the beginning of an odyssey. To keep to his timetable, the captain had the woman ferried to the nearest island and then continued the trip without her.

That’s when the AGA machine sprung into action: A partner company transported the patient, first by ship to get further emergency care on a neighboring island with better facilities, then from there to New Zealand. She finally returned to Ger-many on a charter flight. The emergency assisters were able to react so quickly thanks to a database that Grohn’s prede-cessor, Gerhard Müller, had played a major role in setting up, “Knowing where the best medical facilities are in a country can sometimes save lives,” Müller had once said in an inter-view with Allianz Journal. Sadly, Müller died suddenly in 2012.

The hospital catalog now lists over 2,800 hospitals and clinics in more than 160 countries und contains information on treatment quality, hygiene, equipment, staff, doctor visits and administration. In an emergency the database enables doctors and AGA assisters to make a quick decision about whether someone should be treated locally or moved to a specialist clinic or whether repatriation is advisable.

The staff at Allianz Global Assistance Germany spring into action over 6,000 times a year to help customers in emergency situations

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According to new rules, the e-Call system must be fitted in all new vehicles sold in Europe from 2015. What does it mean for consumers?The relevant EU directive calls for e-Call to be fitted in all new vehicle models from October 2015. It doesn’t apply to the new vehicle market in general. Blanket penetra-tion of the market by the system will take at least ten years. In the event of an accident, e-Call sends out an emergency call from the car to the nearest control center, which then initiates the necessary emergency procedures. Estimates indicate that Europe-wide the number of traffic deaths could be reduced by 2,500 per year once the system comes on stream.

Accident data is one thing, but the system can record much more extensive data about vehicles and drivers. Allianz is already using telematics in Italy and the UK to set insurance premiums. Is this the start of driver surveillance?We need to clear up a few myths in this respect. Premiums always depend on the same things: how long has the person been driving without having an accident? How many kilometers does he drive a year? Where does he live? But in this respect we’re interested in the collective of insured drivers and not in setting premiums for individuals.

But doesn’t the concept of pay-as-you-drive lead in that direction?In Germany, premiums are calculated according to the mileage covered for instance. That’s how we could offer more accurately calculated tariffs. That doesn’t

mean that details of driving behavior are recorded or that braking too hard incurs a higher premium. That would go against the concept of an insured collective. The use of telematics could have a desirable psycho-logical element for instance for young drivers who are most at risk of being involved in an accident: the knowledge that someone is virtually looking over your shoulder while you’re driving causes accident rates to fall. People drive more carefully. However, in our experience customers are generally reluc-tant to take advantage of pay-as-you-drive and telematics-based premiums._fs

At Allianz Germany we’ve laid down very clear rules for ourselves. Of course, there are technical resources available to learn a lot about clients. Specialized companies even offer us profiles of people that have been drawn up from Facebook entries. But we don’t use these things. We don’t collect or use any data that customers are unaware of and haven’t authorized. So we are able to address many anxieties that people have about the use of modern media and respect of privacy. I think this is extremely important. On the other hand, we have to realize that the younger generation has a different take on the matter and places greater value on the individualization of products than the way their data is used.

Maybe they need to be protected more from themselves.That’s a question that should be directed at the legislature rather than a commercial enterprise. Apart from that, we have a social responsibility not to use data without the customer’s consent. But in the end every individual has to decide what he or she does on the internet and who has access to the data. I believe that the pendulum is now swinging the other way and that many young people are thinking twice about baring their souls on the net.

But you are also using data for the calculation of tariffs. Yes. Of course we collect customer data – but with their consent, which we get during sales talks for instance or in an anonymous way when someone surfs our websites.

business transaction we enter. Think of the sensitive medical data needed to cal- culate health or life insurance premiums. If customers are not convinced that this information is in safe hands, it would make a mockery of our basis for transactions. That’s why we simply don’t do certain things that other companies – usually in the inter-net sector – do.

But without a comprehensive data- base you wouldn’t have a basis for transactions either.

Alexander Vollert

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We live in an age of digital self-exposure. People reveal things about themselves on the internet that others don’t necessarily want to know. But for some companies this mountain of data is a goldmine. We talked to Alexander Vollert, board member responsible for P&C at Allianz Germany, about trust, privacy and customer surveillance.

“We don’t profile clients”

business transaction we enter. Think of the sensitive medical data needed to cal-culate health or life insurance premiums. If customers are not convinced that this information is in safe hands, it would make a mockery of our basis for transactions. That’s why we simply don’t do certain things that other companies – usually in the inter-net sector – do.

But without a comprehensive data-base you wouldn’t have a basis for transactions either.

We often get the impression from the media that the insurance industry collects vast amounts of client data to draw up personal profiles some day and to adjust their rates accordingly. Is that unfounded? We don’t do that sort of thing.

Because?There’s one simple and, I believe, obvious reason: our clients trust us to use the per-sonal data they give us in a responsible manner. This lies at the very heart of every

Mr. Vollert, do you use social networks?I’m on Facebook.

How do you protect your data?I make sure that I don’t put any information on the net that couldn’t also be made public. In addition, you can choose your settings on Facebook so that your own profile is relatively well protected and secure. If you don’t want data to be made public, then you shouldn’t put it on the net in the first place. It’s as simple as that.

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There was a time when the Vikings instilled fear and terror throughout Europe as far south as Byzantium. Now they’re back – but this time on a peaceful mission.

Copenhagen in the fall. We’re meeting Stig Jensen, CEO of the Nordic Region of Allianz Global Corporate & Specialty (AGCS). It’s drizzling outside and the Danish capital is bathed in a monochrome grey. November rain. According to the UN’s World Happiness Report, the Danes are the happiest people in the world. It can’t be on account of the weather.

Jensen, who moved from the industrial insurer Gerling to Allianz in 2007, is tall and has a firm handshake. If he had a full beard, he’d probably be the spitting image of Eric the Red, who, in fact, was Norwegian, but for a non-Scandinavian that’s of no consequence. Later we’ll learn that Scandinavians aren’t nearly as similar as we in the south like to think – and that the real Vikings came from Denmark.

From Copenhagen Jensen and his staff of 30 manage the industrial business in 22 countries – the biggest region in the AGCS universe. It includes Scandinavia and Fin-land, of course, and the Baltic but now also Central and Eastern Europe and Russia. In 2007, when the story of the Nordic Region began, there wasn’t even an office here. Although Jensen was officially the regent of the northern kingdom, he had neither staff nor a business account – a king without a kingdom, so to speak. Then, as he began his reign, the global financial crisis reared its ugly head. Bad timing, you might say.

“Not at all,” says Jensen. “It was at this point that compa-nies were looking for a partner they could rely on in an emergency.” While many insurers were downgraded by

The Little Mermaid, Copenhagen’s landmark, gives the impression that the Danes are melancholy folk. But, according to a UN survey, they are the happiest people in the world

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Swedes and Finns also rank among the happy top ten in the aforementioned UN report. Germany by the way grumbles away in 26th place._fs

from a distance,” says Jensen. “You need good people on the ground who know the market, speak the language and are there for the customers.” He particularly wants to step up business with the Swedish aviation industry, which two competitors are sharing at the moment. “We want to be the third one there,” says Jensen.

The start was certainly very promising: AGCS’s under-writers are housed with colleagues from Allianz Global Investors in an Allianz building in the very center of Stockholm, which some people were very envious about. “The place to be,” enthuses Jensen. The Allianz logo, which can be seen from afar, proclaims their lofty ambi-tions. Jensen could also imagine a subsidiary for Norway instead of the small representative office. The business potential is there: Norway is the third-biggest marine hull insurance market in the world and the second-biggest energy producer in Europe; it has oil, gas, wind and water.

Cool Finns

Since 2010, AGCS has also been represented in Finland, which is said to be a particular challenge in terms of communication. Just to illustrate that: following the merger of four Scandinavian banks, so the story goes, the new board of management decreed that English would be the company language. “Fine,” the Finnish representatives replied, “we can also be silent in English.” A nice story, even though it’s probably apocryphal. But it does reveal a deeper truth. As far as the Finns’ talkative-ness is concerned, Jensen has had similar experiences. “They’re cool and don’t talk much,” he says, “but once you’ve gained their trust, you can count on them one hundred percent.”

The next item on his wish list is Turkey, which stretches the meaning of a Nordic Region quite beyond its limit. As with Russia, Jensen wants to put an AGCS team to work under the roof of Allianz Turkey, the leader among the local insurers. “Turkey is an emerging market. There’s huge potential for us there,” says Jensen. The only dis-advantage is that the country sits on a geological fault line and is plagued by earthquakes on a regular basis.

Outside it’s raining again. But as mentioned before, the gloomy weather doesn’t seem to affect the Danes too much. And for all their differences, the Scandinavians seem to share a common optimism: Norwegians,

N O R D I C R E G I O N

• Largest region within AGCS

• Includes Denmark, Norway, Sweden and Finland, the Baltic,

Central and Eastern Europe, Russia and the successor states

of the former Soviet Union as well as Turkey

• Over 4,000 corporate clients

• 2008: official business launch in Denmark, currently

30 employees at head office in Copenhagen

• 2009: sales offices in Sweden and Norway

• 2010: sales office in Finland

• 2012: sales team in the offices of Allianz Russia

• 2013: AGCS branch office in Sweden

• Revenue in 2013: EUR 120 million

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bined ratio of 56 percent. Anything under 100 percent fills the coffers. “Luck also plays a part, of course,” says Jensen. “56 percent isn’t necessarily the rule.”

When Jensen, who enjoys clay-pigeon shooting in his spare time, stands at the presentation board and outlines the Nordic Region’s future scenario you can tell he’s still enjoying his job as much as he did seven years ago, when everything was just taking off. Meanwhile, the expansion plans are no longer limited to the north. They’re now fol-lowing in the footsteps of the old Vikings. “I like building something from scratch,” says Jensen, looking cheerfully at the tangle of circles and arrows that reach as far as the Bosphorus and as far eastwards as Russia.

Hakan Danielsson, a Swede, is holding the Allianz scepter in Russia at the moment. He and Jensen haven’t been able to agree on who actually deserves the Viking crown. “The Danes, of course,” says Jensen the Dane, which he puts down to their tendency to make quick decisions. The Swedes on the other hand always discuss matters at great length until they’ve reached a consensus. “It is a way to build long-term relationships and establish trust,” says the AGCS manager. “In Denmark we have a tendency to be a bit more informal and do things a little bit faster.” Does anybody think the Vikings had a confer-ence about whether they should attack London or not? In 994 Sven Gabelbart – king, Viking and Dane – didn’t shilly-shally.

Despite not coming to any definite conclusion on the matter, Jensen and Danielsson work closely together. Since April 2012, 35 employees from AGCS Nordic Region have been carrying out industrial business under the roof of Allianz Russia. Sixty of the 150 biggest companies listed on the Russian stock exchange are among their customers, including shipping company Sovcomflot, energy producers Gazprom, Lukoil and Rosneft and air-line Aeroflot. Jensen’s Russian section is also involved in insurance programs for some Olympic buildings in Sochi. It now accounts for a third of the EUR 120 million in pre-mium income of the Nordic Region. The rest comes from Scandinavia and Central Europe.

Last October, the sales office in Sweden, which until then had been run from Copenhagen, became an inde-pendent branch – the first in the Nordic Region. “Once it reaches a certain size, you just can’t run a business

the ratings agencies due to shaky finances, the Allianz subsidiary stood out from the crowd with a solid AA rating from Standard & Poor’s, which it still has today. “Many companies asked us about insurance protection,” recalls the Dane about the company’s beginnings. By 2008, the Nordic Region was turning a profit, and it has continued to do so, apart from 2009 when a major fire in a factory owned by a Swedish client in far-off Mexico melted down the balance sheet.

As far as the Bosphorus

Meanwhile, the Nordic Region’s client list reads like a Who’s Who of major international Scandinavian com-panies: Maersk, Nokia, Volvo, Lego, Ericsson, Novo Nord-isk, Vestas, IKEA, and so on and so forth. They all rely on AGCS’s global insurance programs. In 2013, the Nordic Region increased its premium income by just under 50 percent compared to the previous year with a com-

U P C L O S E A N D P E R S O N A L

Stig Jensen began his career in 1985 at Winterthur International in

Copenhagen, where he became the head of the Industrial/Claims

Department. From 1994 he expanded the industrial business in the Nordic

region for Gerling International before moving to Allianz Global Corporate

& Specialty in 2007. Jensen studied at the Copenhagen Business School

and at INSEAD in France before completing his MBA at Henley Manage-

ment College in the UK. He is the father of two children.

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Mr. Happe, insurers are wringing their hands looking for lucrative investment opportunities. Is there nowhere for your money? The general low-interest situation is to blame. Many traditional investment classes in which insurance companies preferred to invest in the past – government bonds, covered bonds, corporate loans – have very unattractive returns. The average yield for good quality corporate bonds is currently less than two percent in the eurozone. Particularly in the past two years, it has been rather difficult for many portfolios to achieve a good return that exceeds minimum guarantees. Fortunately, Allianz has ample reserves.

Share prices are fairly buoyant at the moment.But we’re limited by regulatory restrictions. Shares therefore only make up five to six percent of the Allianz Group’s portfolio. Private investors should be investing more in real assets, i.e. shares and real estate. A savings account is not the best solution at the moment. However, as an investor of insurance money, we have to meet stringent security requirements. And shares carry a higher investment risk. Ninety percent of our investments are in fixed-interest securities. The rest is distributed among other invest-ment classes such as shares, real estate and infrastructure financing.

Last year, Allianz Global Investors launched an infrastructure debt fund in London for institutional investors. Where is the focus here?

The infrastructure fund will concentrate ini-tially on renewable energy with an emphasis on wind and solar plants. This is a possible way to obtain attractive and stable returns.

Allianz Global Investors also set up a team for infrastructure bonds. What kind of projects will it invest in?The entire range of public works. These are long-term projects that are backed by the public sector and yield relatively good returns: gas storage depots in Spain, concert halls in France, roads, schools, water utilities, hospitals or prisons.

Prisons?Why not? It’s a way to achieve reasonable returns in today’s low-interest environment. We’ve already looked at a few, though so far nothing concrete has come of it. In principle, however, they’re public works just like any other.

So crime does pay.Supporting the constitutional state and law and order pays. City halls, court buildings and prisons are all part of the collective of public buildings that have to be financed.

You would also like to become more involved in financing medium-size companies and are calling for the bank prerogative to be abolished. The banks, you say, would benefit. How so?Because they would be given more room to maneuver in issuing loans. Under Basel III, they will have to set aside risk capital for those loans, which will have a negative impact on their balance sheets.

Karl Happe at Allianz Global Investors Europe invests insurance money of over EUR 110 billion for Allianz companies in Italy, France, Switzerland and the Netherlands. The job has seen better times.

And insurance companies don’t? For banks, which tend to finance themselves on a very short-term basis, long-term loans involve additional liquidity risks, making the business less attractive to them. Insurance companies, tend to finance themselves on a long-term basis. But the banks would still be involved in placing loans. They can take advantage of their network of contacts and charge fees for mediating business arrange-ments. However, they would no longer have to hold a large amount of risk capital in re-serve. In France, by the way, we have a team that has been active in lending money direct-ly to companies. The French supervisory authorities have opened up a pot of five percent for insurance companies, which are now able to participate in the direct corpo-rate loan market, at least to a small extent.

Apropos financial supervision, you wrote in a newspaper article that Europe needs more self-responsibility and fewer regu-lations. But wasn’t it precisely a lack of regulations that caused the current crisis? Absolutely not. The securitized financial products and subprime loans all met the formal criteria, ennobled by triple-A ratings. As a result, many small banks and insurance companies also bought them up on a grand scale. But none of them really knew what was behind those products and what the original risks were. In the USA, where these products originated, few investors took the bait. Investors there want to understand precisely what risks they’re taking on board – a principle that prevents unwise decisions. You can’t sell a product just because it has a triple-A rating and meets all the formal

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Turning point

In World War II the Old Town in Warsaw was completely destroyed and later meticulously rebuilt. Today it is a World Cultural Heritage Site. The photo shows the marketplace

Since Poland joined the EU in 2004, the future looked setfor growth. Even as other EU states went into recessionin the wake of the 2009 financial crisis, domestic demandcontinued to drive the economy in Poland. But in 2013growth was at the lowest rate since the 1990s. Unemploy-ment is over ten percent, with 28 percent of young adultsout of work. If hundreds of thousands of Poles hadn’tfound work in other countries, the statistics would look even bleaker.

The insurance sector has also felt the effects of the down-turn. “The industry is under a lot of pressure,” says Witold

For many years Poland was regarded as a beacon of hope in the mael-strom of the European crisis. Meanwhile, even on the Vistula the mood is subdued. Nor has the insurance industry escaped the downturn: Allianz Poland is also feeling the heat.

Jaworski, CEO of Allianz Poland. While the economy is showing signs of recovery, the insurance industry has barely emerged from the doldrums (see following interview). But Jaworski intends to address this situation with a new management board which Katarzyna Scheer and Magdalena Nawloka both joined last September.

The CEO’s two new deputies have no easy task ahead of them: Scheer is responsilbe for Sales and Marketing and Nawloka for P&C and Life insurance as well as IT. Plans to reform private pensions in Poland, which will mean that some assets will be siphoned off to fund the state-run

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things go wrong, because it forces them to assess risks realistically in advance and not to rush into adventures.

Interest rates are at a historic low. When will they recover?We’ve probably passed the worst but I’m pretty sure that we will reach an interest level in the next ten years that is below the inflation rate – at least as far as safe invest-ments such as sovereign bonds and covered bonds are concerned. This means that infla-tion will rise more rapidly than interest rates. With regard to safe investments, this means that we will have to expect real losses in the foreseeable future. That’s intentional: govern-ments are trying to reduce their debts in this way. Our job is to find investments that will at least help maintain purchasing power.

For example? Instruments known as inflation-linked bonds are quite interesting at the moment. They offer investors protection against the risk of inflation and yield a real positive interest rate. Mortgages on corporate real estate and even construction loans for private clients generate halfway decent returns. Allianz is active in this area on a relatively large scale. With a portfolio of EUR 14 billion, we now rank among the biggest financers of private homes in Germany._fs

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requirements. You have to understand what economic risks it carries. If you observe this principle, you won’t take any unreasonable risks.

What do you think of the proposal that investors should be called upon in the future to settle debts resulting from bank failures?It certainly makes sense from an economic point of view. As an investor you must have an interest in making sure that a bank crisis does not escalate into a national crisis that would ultimately affect all other investments. Of course, as an investor in a bank you don’t want to lose money, but I would prefer that to not losing money in my bank investment but then having to write off my sovereign bonds. Moreover, because of the state crisis, other banks would also be sucked into the whirlpool. Take, for example, Ireland, which provided a state guarantee but was itself derailed as a result. It is economically advan-tageous and therefore more sensible for pri-vate investors to be called to account when

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Katarzyna Scheer and Magdalena Nawloka

If you ask Scheer and Nawloka about an event from their childhood that they particularly remember, it is that day in December 1981 when General Jaruzelski appeared in front of the cameras and declared martial law in Poland. “It was the day after my tenth birthday and the usual children’s TV program had been canceled,” remembers Katarzyna Scheer. “It was very exciting. The grown ups were all very serious, and we children were imagining how we were all going to become war heroes.”

The first memory that occurs to Magdalena Nawloka is also the canceled children’s TV program. Plus the two months that the ten-year-old had off school after martial law was declared. Like her boardroom colleague, she was later one of the first to complete her entire tertiary education under the new system and was then well equipped to start work in the new market economy.

Children or career

This doesn’t mean to say that all doors automatically spring open for Poland’s women. Although the obstacles Polish women face in balancing family life with work might be not as great as in Germany, they too are often faced with the decision: children or career. Which is why Scheer, a mother of a twelve-year-old daughter and a five-year-old son, is in two minds about the question of women quotas. On the one hand she’s afraid that a quota would detract from women’s achievements; on the other it is obvious that progress will be excruciatingly slow

without imposing a binding quota in the business world. “For young women it’s important to see female manag-ers who are able to balance professional success with a fulfilled private life. But the choice is often either/or. There aren’t that many role models.”

Witold Jaworski has brought two of these role models onto the management board. Magdalena Nawloka also has two kids: boys aged nine and twelve._fs

Allianz Poland

• Established in 1998• 1200 employees• 1.6 million customers

• Premium income 2012– P&C: EUR 420 million– Life: EUR 400 million

• Market position and market share (2012)– 4th in P&C insurance (6.7 percent)– 8th in life/health insurance (4.7 percent)

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pension system (ZUS), and declining consumer spending have put a damper on premium income growth in the life sector. And the P&C business has been particularly affected by a drop in demand for new cars and motor own-damage insurance products.

Mental barrier

But some problems are the company’s own doing. “It’s not so much the bureaucracy at Allianz,” says Katarzyna Scheer, who used to work for Poland’s biggest tele-communications company, where her responsibilities included Products, Marketing and Customer Relations Management. “What really holds us back is the inertia, the mental barrier, that prevents us from abandoning our old habits. Why change the way we’ve been doing something for the past 15 years? This attitude has meant that some market changes have simply slipped past us.”

For example, the development of an independent agency channel, which has enormously improved the growth rates of some competitors. This means that agents aren’t tied exclusively to one brand and can look for the best policies from the range of products on the market. “They’re achieving 20 percent growth per year,” says Scheer. “Of course, our exclusivity sales model guarantees stability and quality, but you can’t simply close your eyes to market developments.”

Meanwhile, Allianz has also become involved in the multi-agency business, which does particularly well in motor insurance. At the Allianz head office in Warsaw they now know first hand where their own products stand compared to those of their competitors, which commissions are usual in the market and which IT sys-tems are being used. “Before, we often didn’t know what our rivals were doing and what our customers wanted,” says Scheer. The fact that the new channel has led to conflicts with established sales practices is the least of Scheer’s worries at the moment. “We have under seven percent market share in the P&C market,” she says. “We should be focusing on the other 93 percent.”

Magdalena Nawloka agrees. According to the financial journal Puls Biznesu, she ranks second among the 100 most influential business women in Poland – behind the deputy prime minister. Nawloka, previously Board mem-ber in charge of Finance at Generali Poland and deputy CEO of Poland’s biggest insurer PZU, is convinced that Allianz must be more assertive and above all more agile. It’s a question of attitude and also one of technology: “Our computer systems are out of date and the IT architecture is too complicated,” she says. “It just takes too long for us to place a new product on the market.”

Having Scheer and Nawloka at his side isn’t a concession to the zeitgeist, Witold Jaworski stresses: “They were simply the best of all the candidates.” Expectations are correspon-dingly high. “I like challenges,” says Magdalena Nawloka. She and Katarzyna Scheer belong to a generation of women for whom the political change in the Eastern Bloc smoothed the way for promotion when they were young. The demand for well-educated, fresh-minded successors to replace the old guard was enormous. Nawloka, who studied economics in Krakow, became a board member of a bank at the age of 28. These days, such a rapid rise would hardly be possible, she says, “no matter how bright or well-qualified you are.”

Katarzyna Scheer, who studied at Warsaw Business School from 1990 and later ranked among the best MBA students in her year in the United States, is one of the winners to emerge from the political turmoil. This had its beginnings at the end of the 90s in Poland when Solidarnosc (Solidarity), the first free trade union in the Eastern Bloc, put so much pressure on the government in Warsaw that it was forced to declare martial law.

F E W E R P O L E S

Demographic change hasn’t spared Poland either.

The Polish population continued to grow up to the

beginning of the current century. But, according to a report

by the German Institute for Polish Studies, the number

of people of working age will fall to 20.7 million by 2035

compared to 24.6 million in 2008. The total population will

also decline, from 38.5 million today to 32 million in 2050.

The number of over 60s, on the other hand, will be double

the number recorded in 2010 – an increase of 38.8 percent.

The birth rate is currently at 1.32 percent, one of the lowest

in the EU. A birth rate of 2.1 children per female would be

needed to keep the population at its current level.

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Mr. Jaworski, how would you describe the current economic situation in Po-land? We are very much linked to the German economy, and the German economy is doing okay. Poland had some problems last year but now the economy is picking up again. Unfortunately, the insurance market is lagging behind. The insurance industry is under heavy pressure from price wars which sent the premiums down. The best indicator is Third Party Liability where the premium income shrunk on average by seven percent in retail and by almost ten percent in corpo-rate. While the economy is recovering the insurance market is shrinking.

Witold Jaworski, CEO of Allianz Poland since April 2013, on price wars, attitudes and missed opportunities.

Under pressure

What is Allianz’s market share in Poland? Allianz has around seven percent in P&C and under five percent in life.

You worked for market leader PZU for eight years. What is different at Allianz?Actually, I was pretty surprised about how similar the organization was to what we had at PZU.

Is that good or bad? Well, I found quite a lot of bureaucracy here. And sometimes an attitude that you’d rather expect from a market leader, not necessarily from a player with a seven percent market share.

After being with Allianz for almost ten months now what do you consider to be the most urgent challenges? Allianz started 16 years ago from scratch and became number four in the market. That was a huge success story. I would like to revive that attitude of eagerness and bring it back to the organization. Becoming feisty again instead of being complacent. Six years ago, Allianz Poland had a market share of seven percent in P&C. Now we are still at seven percent while some competitors moved ahead of us. I want to see that eager-ness, that hunger of the early days again. The major change that I want to bring for-ward is moving from reactive to proactive,

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from feeling safe to being constantly on the lookout for market opportunities.

You spoke about bureaucracy at Allianz. Where do you see it?We are very good at creating work for our-selves but not to make our customers happy or to get ahead of the competition. I found out that we had 163 procedures in motor claims alone. But more worrying is the fact that we lost touch with market develop-ments. While the market started moving in the direction of multi-agents – independent brokers making price comparisons and sell-ing policies from different insurers – we were happy with our tied-agent network. Don’t get me wrong, tied agents are a great sales channel, they are a stabilizing and loyal factor. But while our competitors grew their business over the last few years, we didn’t. For Allianz not going for it meant missing a market opportunity.

Besides sales, where else do you see room for improvement?Some of our tariffs are old-fashioned, our IT support is not up-to-date and we need to keep in touch with what’s going on in the market, what the market standards and what the underlying drivers of business are. All that affects profitability. But the most impor-tant thing is probably that we need to ramp up our customer experience management. We need to look closely into the customer journey, into the touch points customers have with us and start thinking from their perspective. Dealing with us should be sim-ple and understandable which is not always the case.

For instance? Some of our processes are extremely complex, which is driving up the costs. We need to change that. First we have to earn money, then we can do other things like investing in the brand. The story of an

insurance company I have in mind is very straightforward: you have to be simple at the touch-points with the customers and your sales channels; you have to be simple and efficient in claims and operations; and when it comes to assessing risks you have to be very sophisticated.

Are you planning a reduction in staff?I would say it’s rather reshaping the staff, shifting some back-office functions towards Customer Relation Management, from administration towards sales. We need to become more efficient in terms of back-office processes. This should free up money that we can invest into things that make more sense commercially. The market is constantly changing and our competitors are really aggressive, so we have to get our act together fast._fs

The Allianz headquarter in Warsaw. Witold Jaworski would like to revive the attitude of the early years

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The Iron Lady’s biggest coup

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Sixty-two years ago, when Lang Hancock flew over the Pilbara, one of the nine provinces in Western Australia, he was struck by the rusty-red color of the rocks. The discovery of one of the richest iron ore deposits in the world made him a wealthy man and turned the region into a mecca for Australian mining. Gina Rinehart, Hancock’s daughter and heir, took over the business in the 1990s. Today, the Iron Lady is worth an estimated USD 20 billion. She is now preparing to expand the family empire in the Pilbara with a multi-billion business venture.

The Roy Hill Mine, in which Rinehart’s company, Hancock Pro specting, has a 70 percent stake, is one of the biggest mining projects in the world with an investment volume of USD ten billion. The remaining 30 percent is held by Korean, Japanese and Taiwanese companies. Production is due to start in September 2015. The mine is expected to produce approximately 55 million tonnes of iron ore annually – over the next 20 years at least.

Roy Hill is one of the world’s most profitable mining projects because its reserves are relatively easy to extract by open-pit mining, which will involve the exca-vation of a 7,200-hectare area to a depth of 110 meters. The pits will then be backfilled with the excavated material. Development and operation of the mine will be insured by a consortium that includes Allianz Global Corporate & Specialty (AGCS). “So far there have been no notable losses at the site,” says Ronan Gallagher from AGCS in Australia. “The safety standards are excellent.”

One of the biggest iron ore reserves in the world is about to be mined in Australia’s Pilbara region in the parched northwest of the country – the ideal gateway for supplying Asia’s iron-hungry markets. Allianz is one of the insurers.

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and forth. The 2.5-kilometer runway is long enough for a Boeing 737 to land on. Since last August Qantas has served the desert airport three times a week. A Fokker F 100 that can seat up to a hundred passengers has been big enough so far, but once production gets underway they’ll probably have to switch to the bigger aircraft.

As for Gina Rinehart, it’s the biggest project she’s ever undertaken. Her father had simply leased the land and contented himself with 2.5 percent of the profits that the big mining companies made from the iron ore. His daughter entered the mining business herself and opened Mine Hope Downs in Pilbara in 2007. Instead of 2.5 percent, she gets 50 percent of the profits. At Roy Hill that figure will be 70 percent. Once asked what her idea of beauty was, she replied: “Beauty is an iron mine.”_fs

However, expensive preparatory work is needed to transport the ore. A 340-kilometer railroad line will be built from Roy Hill to Port Hedland in the north. From there the ore will be shipped to customers. The port has already been dredged to the necessary depth. As soon as production at Roy Hill is in full swing, five heavy freight trains with 232 cars each will ply between the mine and Port Hedland every day. Production and trans-port will be monitored by the Remote Operations Center in Perth, a high-tech control center 1,200 kilometers from Roy Hill.

The Pilbara region is as big as Spain, but instead of 47 million, there are only 45,000 inhabitants, nearly half of whom live in Port Hedland. Roy Hill is the end of the world. An airport has been built in the middle of the outback to shuttle the 2,000 mine workers back

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Hope after the civil war

It’s been just a couple of years since Sri Lanka made headlines, mostly because of its never-ending civil war. Since the guns were abandoned the economy has taken an upward turn, investors have rediscovered the island, and tourism is picking up again. Allianz Lanka is feeling the recovery too.

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The car journey from Colombo to Kandy 110 kilometers away takes at least three hours – three hours in which you get an idea of the rapid development that has taken place in Sri Lanka since 2009, when the decades-long civil war between the Singhalese central government and Tamil rebels ended. In 2011, the economy grew by 8.3 percent, the strongest growth in 32 years. Since then the barometer has swung between six and seven percent.

Stopover for megaships

In Colombo the Chinese have just finished building a huge container terminal at a cost of half a billion US dol-lars, which will make Sri Lanka an important stopover for megaships on the world’s most strategically important shipping route between Europe and Asia. The deep-sea port of Hambantota opened in 2012. Since March 2013, the city in the southeast of the country has also had an international airport. Construction work is evident every-where you look: hotels, office buildings, bridges, streets. The country, which generates a large part of its income from tourism, has a lot of catching up to do.

Along the road to Kandy it also seems that hardly a stone has been left standing. Entire rows of houses are being knocked down to make way for new highways. That will be too late for us unfortunately: we’re stuck behind one

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Sri Lanka has enjoyed an economic upswing since the end of the civil war five years ago, as shown by the Allianz-insured World Trade Center in Colombo (top)

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The life insurance company, which was set up four years after the P&C arm, is doing well too, with 40 percent of premiums now coming from the Tamil north. In 2009, the civil war was barely over when Sandamal Hettiarachchi, head of 1,200 Allianz life insurance agents nationwide, was sitting in his car on his way to Jaffna. “Of all the eth-nic groups in Sri Lanka, the Tamils are the most savings and investment minded,” says Hettiarachchi, who is a trained airplane mechanic. “We were the first to open an office there.” In terms of premium income, Allianz ranks eighth among the 21 insurers in the country. In the northern province it’s the market leader.

The only sales team more successful than the Jaffna branch is the one led by Ruwan Dissanayake in Kandy in the heart of Sri Lanka. Before he moved from Asian Alliance to Allianz in 2008, he’d never heard of Europe’s biggest insurer. “I had to study up on it on the Internet,” he says laughing. The same went for most of the employ-ees, who he gradually recruited from other companies to work in his agency. Meanwhile, Allianz in Sri Lanka is making a name for itself, even if many of the company’s 35,000 customers across the country are unable to pro-nounce it correctly.

Elephants in blue

Allianz doesn’t advertise much in Kandy – or on the rest of the island for that matter. We only spotted one Allianz billboard during the entire journey to the former royal city, which the British finally conquered in 1815 following years of intermittent fighting. In the advert, Formula 1 pilot Lewis Hamilton cautions drivers to take care in traf-fic. “We’re rather cautious when it comes to advertising,” says Life sales boss Hettiarachchi. “What we are focusing on instead is raising brand awareness through better customer service.” He’s a bit more generous whenever a new branch office is opened. “Then we gather together all our people,” he says. “We invite the provincial gover-nor and the city dignitaries, and we sometimes have a procession of blue elephants.”

Head of Market Management Saliya Weerakoon, makes a virtue of the tight budget and arranges a special kind of publicity. Last year, he launched four campaigns with

of the motorized three-wheelers that you will find mil-lions of on Asia’s roads. No gap appears in the oncoming traffic to allow us to pass. “Jesus saves” is emblazoned on the rear of the mobile traffic obstruction ahead of us. It’s a comforting thought, but one shouldn’t bet on it: on a per-vehicle basis, the traffic death toll in Sri Lanka is 20 times higher than in Germany.

That’s one reason why Allianz Lanka has largely kept out of the car insurance business. “Hardly any of our com-petitors turn a profit in this segment,” says Allianz CEO Surekha Alles. But you can’t get around motor insurance policies if you want your private customer business to grow. This segment accounts for over 60 percent of P&C premium income in Sri Lanka but currently makes up only 12 percent of the Allianz subsidiary’s portfolio.

Allianz Insurance Lanka was launched in early 2005, shortly after the Island of Tea was struck by the most devastating tsunami of modern times. Over 30,000 peo-ple lost their lives in Sri Lanka alone. A year later Surekha Alles took over the management of the company which soon turned profitable. In 2012, the combined ratio was 58 percent.

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Ruwan Dissanayake is in charge of the most successful sales team at Allianz Lanka. When the subsidiary was opened in Kandy in 2010, an elephant was decked in the Allianz colors

The Temple of the Tooth in Kandy, which houses a tooth of Buddha, is one of the most important pilgrimage sites for Buddhists

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wide public impact: the Allianz Junior Football Camp which generated immense response among teenagers, the F1 Drive Safely campaign, the initiative advocating financial education of students which was organized in conjunction with the My Finance Coach foundation, and last but not least the support of the Sri Lankan paralym-pic movement. A sponsoring agreement was signed last October. “You can make an impact this way too,” says Weerakoon (see “Hero, Cripple, Superman”).

But will word of mouth alone create the necessary brand awareness for Allianz to move into fifth position among 21 insurers by 2015? Ruwan Dissanayake in Kendy has his doubts. “We need more support for branding and advertising,” he says. “We just need that.” And there are a number of projects Allianz could beat the drum for: the first wind farm in the country, the bridge over Arugam Bay, the southern expressway, the twin towers of the World Trade Center in Colombo – all insured by Allianz.

So far, the P&C arm of Allianz in Sri Lanka has been par-ticularly active in the corporate and industrial business. But the growth curve is bottoming out for Allianz and premium income from the insurance sector as a whole

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Surekha Alles has been at the helm of Allianz Lanka since 2006, turning it into one of the most profitable companies in the Allianz Group

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actually declined in 2012 – and that in a country in which it only makes up 1.2 percent of GDP. By comparison, according to Swiss Re, that figure is 18 percent in Taiwan, the international leader in terms of insurance penetration.

According to Mifnaz Jawahar from Risk & Control at Allianz Lanka, the greatest growth potential in Sri Lanka is currently in the motor insurance business for private customers: “If we want to improve our market position from eighth to fifth by 2015, we need to move up a gear in motor insurance.” Jawahar doesn’t think that this will put profitability at risk. “Given the right risk choice and the right price, there’s really nothing that can’t be insured,” she says.

All that’s needed now is for the customers to play along – which can be a problem. “The Sri Lankans are very optimistic folk,” explains Saliya Weerakoon. “Only a minority takes out life insurance or policies for worldly goods.” But experience has shown that people find insurance more attractive as their wealth increases. Weerakoon: “We are just at the beginning.”_fs

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• Population: 21 million

• Area: 65,000 square km

• Capital: Colombo

• The world’s fourth biggest tea exporter after China, India and Kenya

• Main religion: Buddhism (70 percent)

• Largest national minority: Tamil (nine percent)

• End of the civil war: May 2009

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Hero, cripple, superman

It all happened in just a few seconds, but it was enough to turn Pradeep Sanjaya’s life upside down. He was 22 at the time – younger than the war in which he was fighting.

time finding a place in society, in a country like Sri Lanka it is far more difficult.

It was sports, which he had to give up years before, that has given Pradeep Sanjaya a new lease on life. He began training with the army sport association and gradually moved up the rankings. In 2010, he entered the army’s Para-Games and immediately won the 200 and 400-meter events. The same year he set a new regional record in the 200-meter sprint at the Asian Paralympics in Malaysia. Yet few people at home were aware of his achievements.

Given the country’s history, it is no surprise that Sri Lanka’s paralympic movement is dominated by army personnel. The president of the National Federation of Sports for the Disabled (NSFD), Brigadier Rajitha Ampemohotti, was him-self badly wounded in the fight against the “Tamil Freedom Fighters” in 1990 and walks with the aid of crutches ever since. “At first I was in despair,” says the former boxer. “Back then there was very little social support. But in recent years sport has helped raise people’s awareness.”

It was July 28, 2008, just after nine in the evening. Pradeep Sanjaya was on patrol with his unit near the Tamil stronghold of Kilinochchi in the north of Sri Lanka, when a grenade exploded nearby. During the attack, one of his comrades died and he and six others were wounded. His left arm was shat-tered. Sanjaya was just 22 – a war hero, a cripple, a burden.

He had been out of favor with the gods even before then. He’d had to leave school at the age of 15 following the sudden death of his father in order to help his brothers look after the family. His dream of becoming an athlete was over, his future as a menial laborer predetermined. The only escape for people like him was the army. His mother was against him joining, but she couldn’t tie him up either. Early 2008, San-jaya joined the Sinha regiment, and just a few months later the grenade exploded next to him.

It is estimated that the civil war that raged in Sri Lanka between 1982 and 2009 claimed up to 100,000 lives. Tens of thousands of people were marked for life. Even in wealthy countries, disabled people don’t have an easy

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Athletes from the Sri Lankan paralympic team: Y. P Jayalath, Amara Indumathi, Pradeep Sanjaya, Nishantha Senavirathna

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Nevertheless, an Olympic medal was needed to bring disabled sport to the attention of the national media. On September 4, 2012 Pradeep Sanjaya went down in history when he won the 400-meter bronze in London – the first medal the Sri Lankan team brought home since it first com-peted in the Summer Paralympics in 1996. Sanjaya, reserv-ed and shy, became the poster boy of disabled sport in Sri Lanka, and the press made him a kind of superman.

But the euphoria didn’t last. Few people took notice of the bronze medal that he achieved at the Disabled World Championships in Lyon in July last year. “Disappointing,” was how the NFSD president described the media response in his country. And he’s also dissatisfied with the equipment available to his athletes. The state provides some financial support, but it’s not nearly enough.

“I have to buy all the equipment from my own salary,” said Sanjaya during an interview with the BBC in London. And Amara Indumathie, who was the first female Sri Lankan athlete to compete in the Paralympic Games, said: “We don’t get sponsors. I’m sure we would perform much better if we were given the same attention as able-bodied athletes.”

Their words kicked at open doors at Allianz Lanka, which became one of the official team supporters last October, initially until the Summer Games in Rio de Janeiro in 2016. “We want to help find sponsors and get the press more interested in disabled sport,” says Saliya Weerakoon, Head of Market Management. “At the moment the media are like

a black hole. We want to change that.” As a first step, Allianz together with the International Paralympic Committee (IPC) conducted a workshop to help the NFSD formulate a strate-gic plan for governing Paralympics in Sri Lanka.

Rajitha Ampemohotti also sees his federation as being duty-bound to pave the way for Singhalese and Tamil rapproche-ment. There may be doubts as to whether that is possible in the near future in a country like Sri Lanka, which has been torn apart by civil war. But the brigadier is confident: “Recon-ciliation is possible,” he insists, taking as an example the 2012 National Championships for the Physically Disabled, in which 50 athletes from the Tamil north took part.

Pradeep Sanjaya has also experienced how sport can help bridge the gulf between former combatant ethnic groups. After his medal win in London he was celebrated enthusias-tically in his homeland – including in Kilinochchi, the place where only four years previously a Tamil grenade had almost ended his life. _fs

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Society

Dixie music and New Orleans is better known for its music scene than for its vegetables, but a man from Switzerland is about to change that. He also screws energy-efficient light bulbs into sockets of thousands of local households. The Allianz Foundation for North America is lending a hand.

Chuck Wagner/Shutterstock.com | below: Shutterstock | right: Green Lights New Orleans

One year after hurricane Katrina devastated New Orleans, Andreas Hoffman started his “Green Light New Orleans” project – a ray of hope

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tomatoes

Since August 2005, when Hurricane Katrina breached the levees and left half of New Orleans under water, the cost of living has increased enormously, making the pro-vision of fresh food even more difficult for many. Last year, a Swiss man began to cover the Dixie metropolis with a network of allotment gardens. In the next ten years Andreas Hoffmann, an American by choice, together with an army of volunteers, intends to set up at least 15,000 vegetable gardens in the city – free of charge for residents.

Louisiana’s inhabitants are pretty high up on the list of the fattest Americans, and the home of Dixie music is also in the top league for diabetes. Many inhabitants in the southern US states live in areas where a store selling healthy food is a rarity, but there is a glut of fast-food restaurants and stores full of canned goods and micro-wave meals. Even New Orleans, the state capital, has numerous food deserts – neighborhoods in which there are no vegetable stores far and wide.

Andreas Hoffmann, originally from Switzerland, intends to set up 15,000 vegetable gardens in New Orleans in the next few years with the help of thousands of volunteers

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Big revolutions often begin small, so first of all the father of two swapped all the light bulbs in his house with energy-efficient ones. In 2006, he set up Green Light New Orleans and began to go from door to door with boxes full of energy-saving bulbs. According to the organization, 10,000 volunteers from all over the United States have since changed over 460,000 bulbs in 22,000 households. And every month they swap another 15,000 bulbs.

The grassroots initiative, which is supported by dona-tions and volunteer work, helps households save a substantial amount of money. Over 182 million kilowatt-hours of electricity and well over USD 20 million in energy costs have been saved since the initiative started. Andreas Hoffmann has put his music career on hold, because his commitment to a green New Orleans is too time-consuming. Hoffmann: “I think I’m achieving a lot more at the moment with this than with my music.”_fs

WWW.GREENLIGHTNEWORLEANS.ORG

“A terrific project,” says Reverend Christopher Worthley, head of the Allianz Foundation for North America. “People can become self-sufficient with these small parcels of land, harvest three times a year thanks to the mild climate, save a lot of money and live a healthier life.” Children also learn about nature, and help from neighbors brings people closer together. The Allianz Foundation is sponsoring the garden project as well as Green Light New Orleans, the energy-saving initiative Hoffmann set up in 2006.

The 52-year-old emigrated to America 20 years ago to try his luck as a professional musician and couldn’t tear himself away from New Orleans once he arrived there. The devastation wrought by Hurricane Katrina on “his” city in 2005 was a wake-up call. The floods, which claimed 1,800 lives, stopped just five blocks away from his house. “When I returned to New Orleans, I knew that we had to change the way we lived,” Hoffmann recalls.

The supporters of Green Light New Orleans now come from all over the United States. Since 2006 they’ve replaced over 460,000 light bulbs with energy-efficient bulbs

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