The Germans have seen the “Don't mention the war” scene from Fawlty Towers, the one that includes “you started it,” “No, you started it, you invaded Poland”. They can recite all the words and they find it funny.

That was just one example of the myths Allianz staff dispelled last week when, for the first time ever, they invited leading UK trade press journalists to the company's Munich headquarters to meet the senior management. The Germans not only have a sense of humour, they are also open about the war.

This wasn't a press trip in the normal sense. There were no press conferences, no news releases, no stories to spin. It was a company opening up, taking questions on any subject and simply wishing to be better understood.

This was a company wanting to make sure the Allianz name was known, understood and trusted in the UK. There could be only one reason: that it plans to increase the use of the Allianz name in the UK. Allianz insists UK managers will make that final decision.

There are lots of good reasons for Allianz to consider switching to its own brand name over time – it is not, as French insurer Axa has done, going to impose its brand name immediately throughout the world while the local brand still has its own strengths. A major fillip was the recent stock placing on the New York Stock Exchange. The company now has a clear desire to encourage potential shareholders in its overseas markets, which it will find difficult if they understand another, or even more than one, differing brand name.

“You can buy Allianz shares in London, Germany and New York so we need to push the brand,” says Allianz's corporate communications manager Emilio Galli-Zugaro. He and marketing chief Michael Maskus have the gift of the gab when it comes to positive sound bites about the company too. “Our policy is to under-promise and over-deliver,” says Galli-Zugaro. “The customer must feel sure, not just insured,” says Maskus. Allianz is rightly proud of its AAA Standard & Poor's and A++ AM Best ratings.


No need to rush

Allianz insists it will not rush into changing all its overseas brands to the Allianz name. It has, after all, owned Cornhill since 1986. It first introduced the Allianz name to the corporate risks business nine years ago, trading as Allianz Cornhill. This year it extended that to all its UK commercial business, leaving only personal lines with the Cornhill brand alone.

“We have well established brands. Cornhill is well known in the local market. As long as it stays that way, it will be an asset,” says Galli-Zugaro. “As long as a brand stays stronger than Allianz then it will stay the brand.”

Maskus and his marketing sidekick Matthias Gruen are developing a set of tools so each country's company management team can evaluate the strength of their brands compared to the Allianz name or other Allianz brands. When the value of the local name no longer surpasses that of the Allianz name, the company will switch to trading as Allianz.

The priority countries will be those with several Allianz-owned brands. In Spain recently the company merged three companies and began trading as Allianz. It is concerned immediately with Switzerland, where it has three brands and Italy where it owns six different brands, some of which compete for the same lines of business.

It does not face this problem in the UK, but could soon. The company was one of those that hovered to pick on the bones of troubled Equitable Life – Allianz desperately wants to increase its minimal life presence in the UK. Although it didn't buy then, Allianz's board member Detlev Bremkamp insists the company does want to expand in the UK, in general insurance as well as life. Buying a composite with a good spread of both would be ideal.

And cash is not a problem. Bremkamp insists Allianz could buy the UK's biggest insurer CGNU, if it wanted. But he says that Allianz has nothing in the pipeline and does not want to get into a bidding war, paying any price for acquisitions. But the pressure for growth is coming from Allianz's own internal strategy.

The company has made clear it wants to be within the top five in all its key markets. Cornhill achieves that in general insurance but has minimal life coverage in the UK. CGNU, for example would make a huge difference. The UK giant does not have the same presence around the globe as Allianz – CGNU has pulled out of the US for example and Allianz has operations in more than 70 countries – making absorbing it relatively simple. But it would give Allianz a foothold in Poland, the only elusive country for it in its Eastern Europe expansion plans.

It is another sign of Allianz's openness that Bremkamp admits the memories of Germany's invasion of Poland has made it difficult for Allianz to win business, whereas CGNU has achieved significant growth, particularly in pensions.

Whatever Allianz does end up buying in the UK will present the company with the dual brand problem it is trying to eradicate elsewhere. That will increase pressure on the company to use its newly developed tool kit to decide between brands.

Cornhill's future as a household name looks increasingly shaky. Allianz recently reviewed its sponsorship programme. Using the Allianz brand, the company has sponsored the Williams Formula One car. Two divisions had sponsorship deals of their own: Cornhill had the cricket and AGF in France sponsored the Tour de France. Both sports have mass TV audiences in, and competitors from, countries where the Allianz brand is the company's sole trading name. Both countries dropped their deals.

Doug Pennycuick, broker and marketing executive for Allianz Cornhill says: “It was a decision made in England with an awareness of what was happening elsewhere.” Pennycuick plays down the likelihood of Cornhill switching names soon. “I don't feel under any pressure to make that change,” he says. “It is a migrational approach.” But will the Cornhill name be around in five years' time? “Possibly,” says Pennycuick.

The Williams car will have the Cornhill name added in UK races an the AGF name added in France but the dominant brand will be Allianz. Advertising in the UK is already boosting the Cornhill brand and that will continue. “With the UK we will use the Cornhill brand to endorse Allianz,” says Gruen.

So UK intermediaries and customers had better start getting used to the Allianz name, whether it changes sooner or later. But what does it stand for? What does it represent? Allianz is the second-biggest insurer in Europe on gross written premium, but the most profitable based on pre-tax profit and profit after tax. It is also number one when looking at net technical reserves and net assets.

It is a determined company with a mission to make profits in everything it does. “For us, it's a case of can we make this segment profitable or not. So long as we believe we can do it, we will stay in,” says Bremkamp. “We are not prepared to face the results we have seen in property and liability. It's not the big individual losses. We do not accept the low rates. Whether the broker likes it or not we will have to give it up.” Bremkamp says ratios on some business have hit 160%.

Taking a tough stance

Fellow board member Dr Alfred Gossner agrees that it has become unsustainable and Allianz will not play ball any longer. He blames the big brokers Aon and Marsh, plus Willis in the UK, for destroying margins. From now on the rules are going to change. Allianz, and in the UK Allianz Cornhill, will be demanding tough changes. Every contract will be re-underwritten in advance. There will be no premium reductions without loss of cover. There will be no extensions without additional premium and there will be tougher demands for better risk management.

Gossner says the tough reporting standards of the US stock market, which competing European insurers don't have, mean such losses have be acknowledged openly and shareholders will demand corrective action. They will not accept year-on-year losses that can be submerged in some insurers' accounts.

The company has also changed the way it looks at its markets. Management by lines of business has been changed to management by customer type, with all lines of business necessary for that customer coming under one management team and reporting to one board member. Gossner, for example, is the board member for corporate risks business.

But that doesn't mean forgetting the basics of profitable underwriting. “You can't just look at a client's overall profitability. If a client has three good years in its property account but a poor motor account and so makes an overall profit, you can't ignore the motor problems,” Gossner says.

Allianz also has a strong reputation among other insurers. It takes a technical lead in much of Europe through its centre for technology (AZT). This acts both as a Thatcham-type motor investigation unit with a wider remit but also as a major engineering research department with engineers travelling the world on complex investigations whenever disasters strike.

But the AZT doesn't only work for Allianz. It is contracted to other insurers, loss adjusters, private clients and governments. It recently won a contract from Gerling after the company closed its own research centre.

Allianz uses the skills from all parts of the world to spread its knowledge to different parts of the group. In the UK, for example, expertise in pet insurance is being shared with divisions in other countries. Managers can choose to visit and learn from the other's experience. Galli-Zugaro compares it to eating in an eastern restaurant. “It's an Indonesian rice table operation with different cups, each with a different recipe, on the table and everyone can help themselves,” he says.

The company also pulls together multi-disciplinary teams for major projects and sees this expanding with the increase in infrastructure projects in the developing world. It even suggests Allianz may be involved more deeply than just as the insurer in the future by bringing its financial, engineering and risk management expertise into play to co-ordinate projects, from finance, through design, build and into operation.

Allianz has awesome plans. It has taken incredibly brave steps to open up and to admit to its past links with the Nazi regime. And it has taken a tough stance on future business. It looks likely that it won't be just the Williams team that finds Allianz has the winning formula.