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APRA agrees to court enforceable undertaking from Allianz Australia

The Australian Prudential Regulation Authority (APRA) has agreed to accept a court enforceable undertaking (CEU) from Allianz Australia Insurance Limited (Allianz) acknowledging its past risk and compliance weaknesses and committing to finish rectifying these serious issues.

The CEU commits Allianz to completing a series of transformation programs that relate to risk maturity, compliance, conduct and culture in a timeframe agreed with APRA. Allianz has also undertaken to provide APRA with greater assurance that these programs are complete and operationally effective, including:

  • assigning a Responsible Person(s) to be accountable for the successful completion of the transformation programs; 
  • providing written confirmation from the board of Allianz that all components of the transformation programs have been completed; and
  • appointing independent reviewers to provide written reports on the status of the transformation programs, whether they are operationally effective, and what further work may be required to make them so.

Allianz’s weaknesses in its risk culture, risk governance, and risk management are longstanding. Allianz remains subject to an additional $150 million capital requirement, and APRA has advised that effective and sustainable implementation of its transformation programs is integral to any decision to remove this add-on.

Allianz was also the subject of a case study during the financial services Royal Commission, which referred a number of issues with Allianz’s compliance systems to APRA.  Allianz has acknowledged in the CEU that it took a narrow, legalistic view of compliance and had inadequate processes to escalate and address compliance issues. It also recognises that there was a lack of awareness of such matters at Board and Senior Management level.  

APRA Deputy Chair John Lonsdale said: “The CEU will ensure the deficiencies that prevailed within Allianz for several years are finally remediated. It also highlights the importance of robust oversight by parent entities of Australian-based insurers, with Allianz’s German parent, Allianz SE, acknowledging it fell significantly short of APRA’s expectations in this regard.  

“While Allianz has already made some positive changes, their commitment to the agreed actions are a significant step forward in fixing the serious deficiencies in their risk management frameworks.  We do not expect, nor would we tolerate, a repeat of Allianz’s past shortcomings,” Mr Lonsdale said. 


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The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the financial services industry. It oversees banks, mutuals, general insurance and reinsurance companies, life insurance, private health insurers, friendly societies, and most members of the superannuation industry. APRA currently supervises institutions holding around $9 trillion in assets for Australian depositors, policyholders and superannuation fund members.