I remember many years ago, while still a wet young pup at Post Magazine (as it still was then), interviewing someone at Norwich Union (as it still was then, you do the sums) about ways in which the insurer could leverage its brand to better effect.
The thinking at the time was why stick to underwriting and investment returns? If Norwich Union was insuring home contents, then why not become involved in selling home contents as well? Sell not only the cover for your tv, but also the tv itself.
Well, that one never really got off the ground, and in an environment where interest rates in the UK were still healthy enough for post 100 percent combined ratios not to matter, it was quietly shelved.
But hang on, what’s this crossing my desk this month? German behemoth Allianz and Spanish giant Telefónica have teamed up to deploy fibre in Germany through an open wholesale company.
Operating as a neutral wholesale company, the 50/50 joint venture is set to deploy local fibre optic networks in underserved rural and semi-rural areas across Germany and to offer fibre-to-the-home wholesale access to all telecommunications service providers so they can in turn offer these services to their end customers.
The tie-up with Telefónica follows the announcement earlier in the week that Allianz Capital Partners has signed an agreement to purchase from Galp Energía a 75% stake in Galp Gás Natural Distribuição, the Portuguese supplier serving some 1.1 million households, including the country´s capital of Lisbon.
Not to be left out of the German party, Munich Re has also entered into a strategic partnership with The TRUMPF Group, which offers the use of laser cutting machines. Munich Re is financing the machines and bearing the resulting investment risk.
At the time the partnership was unveiled, Torsten Jeworrek, member of the Board of Management of Munich Re touted it “a forward-looking response to the challenges of an increasingly dynamic market environment.”
Which, to be slightly uncharitable, can also be read as saying that, with the capital markets providing so little proper return on risk at the moment -whether that be in debt or equity- then a company as broad as Munich Re needs to look for different opportunities.
Good luck to them is what I say. Though of course such ventures represent a very different type of emerging risk for these companies and they will also be much harder to evaluate from an investor point of view. Combined ratios and investment portfolios are one thing; laser cutting machines and fibre optic networks are quite another. Now, what channel is Aviva TV on?
Editor, Emerging Risks