Blog: You, us, everyone

Allianz - Update:

The upside potential for insurance companies is fairly limited as on the one hand (mainly in DM), most individuals and companies have applied for one or the other insurance cover, i.e. we consider markets as highly saturated. On the other hand, in EM, insurance products and services have still a low penetration rate as available funds are used for basic day-to-day benefits such as food, rent, gasoline, etc. Nevertheless, insurance companies have shown sound operational performances in the past years.

Like most of insurance companies, Allianz too has raised its dividend payment. The company intends to raise the pay-out ratio form 40 % to around 50 % in the near term. This together with a sound underlying business (good geographical diversification and a well balanced product offering), makes this stock an attractive investment opportunity for conservative investors. We estimate the upside potential in the 10^th.