ALLIANZ REMOVES TOP END OF SOLVENCY RATIO TARGET

Allianz has eliminated the upper threshold of its 180% to 220% solvency ratio target, increasing analyst expectations that the group is gearing up for large merger and acquisition (M&A) activity. Allianz overshot its Solvency II target in its third-quarter results posting a 229% solvency ratio – exactly in line with its year-end 2017 solvency ratio. UBS analysts said the move could indicate a desire to deploy capital towards major deals. Oliver Bate, Allianz’s chief executive, said on Friday: “There is no desire to have large dilutive M&A”. Analysts suggested the decision to remove the upper threshold may also be to stop questions about it capital position. “We sensed the company was frustrated around consistent questioning around excess capital when the Solvency II target ratio was above the 180% to 220% range,” UBS analysts said.