Allianz is on a roll. Last year, the insurer exceeded its own forecast for operating results. With 16 billion euros, the Munich-based company surpassed its target range of 13.8 to 15.8 billion euros. It could have been even more. The board pushed down the property insurance runoff result in the fourth quarter to its lowest level in six years – thereby creating a cushion for future profits.

Missing forecasts, either downward or upward, may be part of the business for some companies. The insurer, however, is a model of predictability. Under the leadership of CEO Oliver Bäte, Allianz has always remained within its self-chosen range, except for the exceptional case of the Covid-19 crisis in 2020/2021.

But the capital markets responded to the release of the latest figures with some dissatisfaction. Why? Allianz used its operating result from the previous year again as the starting point for its forecast for the current period, setting it as the average for the target range. Analysts criticised this as being too unambitious.

That may be true. However, investors elsewhere often demand a forecasting policy that ensures reliability. For example, at Siemens Healthineers' annual general meeting, asset manager DWS urged management to adopt a more conservative approach in its communication with investors. This would strengthen trust in the long term.

Of course, short-term stock price reactions are not always telling, especially since Allianz's stock had already seen a sharp increase in the days prior. Yet, the demands placed on companies can sometimes be surprisingly divergent. Allianz, in any case, consistently demonstrates that it surpasses the average of its forecast range. Under Bäte's leadership, this has always been achieved, except for the two Covid years.

But the pressure is mounting, and there can be no doubt about it. The operating result from last year is nearly twice as high as it was in 2010. Net profit, the key figure for dividends, is also at a record level. The regular share buybacks contribute to a disproportionate increase in earnings per share, yet Allianz would be prudent to prepare for major turbulence. In 2007, it seemed like the sky was the limit, only for the financial crisis to follow. The current geopolitical instabilities will also impact the economy. When? This is the central question for many investors. It will, as always, come as a surprise.

From the perspective of an Allianz closely connected to the capital markets, timing is not the critical factor. Rather, the focus is on making the insurer weatherproof. As much as possible, the Munich-based company is already decoupling its investments from market volatility. This is expensive but the right approach. Better to forgo a few basis points of return today than to risk the entire company tomorrow.

Meanwhile, Allianz has operational tasks to tackle. The boom in industrial insurance has recently been the driver of property and casualty insurance. Now, that wave is receding, although profitability remains high. In the retail business, profits need to be increased. Additionally, the declining interest rates are putting pressure on capital returns across the group, and insurance techniques must compensate for the losses.

In the division asset management, strategic questions remain unresolved. While the AGI fund company achieved significant profit growth in 2024, investors have withdrawn 9 billion euros over the past three years. While Pimco, Allianz's specialist in fixed-income investments, has seen net inflows of 124 billion euros since the beginning of the decade in a challenging interest rate environment, AGI has only managed about a third of that value, despite a stock market boom.