FRANKFURT (Reuters) - Allianz SE (ALVG.DE) and Volkswagen Financial Services AG VOWGF.UL are forming a joint venture to sell car insurance to VW customers that the two companies plan to roll out worldwide, they said on Wednesday.
The two companies have been cooperating for more than 60 years but expect the joint venture to deliver “a clear jump in growth and profitability,” Karsten Crede, chief executive of Allianz’s global automotive business, told a news conference.
The joint venture, called Volkswagen Autoversicherung AG, is set to begin operations on April 1, 2013 and will offer VW (VOWG_p.DE) customers the chance to obtain their car, financing, insurance and guarantee as a single package, Allianz and Volkswagen Financial said.
By upping their game on quality of service and price, the two companies hope to fortify themselves against Germany’s competitive car insurance market, where mutual insurer HUK Coburg has displaced Allianz as the market leader.
The joint venture would initially concentrate on Germany and Europe and already had some additional emerging market countries in mind, though entering the big and complicated Chinese market was far away for now.
In Germany the companies aim to double the number of cars sold with insurance policies to more than 40 percent within the next five years. They plan to invest around 400 million euros ($519 million) in the joint venture by 2018, they said.
The venture, which will have 35 employees, aims to raise the annual number of new German business insurance contracts in the next five years to 350,000 from 150,000, and the stock of policies to 1.2 million from 700,000.
Allianz will hold 51 percent of the voting rights and 49 percent of the capital in the joint venture, while VW Financial will hold 51 percent of the capital and 49 percent of the voting rights.
Reporting by Jonathan Gould; Editing by David Holmes