In the face of intensifying geopolitical developments and their economic fallout, Allianz CEO Oliver Bate said the company has been “cautiously and thoughtfully” optimizing its diversification, adding that this approach has long been core to its business model.
“Even though we measure short-term goals, one of the things in our business model is to try to cut through the noise and focus on the signal,” Bate told a CNBC panel ahead of the 2026 World Economic Forum Annual Meeting in Davos, Switzerland.
The CEO said the economic risk has been around for a long time, which raises the question of why it has not yet been fully reflected in market prices.
“That’s what we’re concerned about. But the most important question for us is: How do we keep our customers safe? I’ve always said this, it’s really important.
“So we’ve been de-risking. When people say, ‘Yeah, but you lost a lot of money on U.S. dollars last year,’ we say, ‘No, we didn’t,’ because we’ve been hedging U.S. dollar net cash flow for a long time. That’s what we do.”
Discussing the renewed focus on tariffs, Bate said there are “absolutely” risks that need to be managed, but noted that tariffs are ultimately a tool used by politicians seeking to achieve specific outcomes.
Recent headlines underscore this point. US President Donald Trump says acquiring Greenland is vital to national and global security.
He said that unless Washington reaches an agreement to buy Greenland from Denmark, a 10% tariff will be imposed on “any and all goods” shipped from the United Kingdom to the United States from February 1, rising to 25% from June 1.
The same measures will apply to goods from Denmark, Norway, Sweden, France, Germany, the Netherlands and Finland, he added.
“If you go back many, many years and ask, ‘What is the art of trading?’ you can read the scripts — they’re there. That doesn’t mean it’s not dangerous. But again we need to ask: What is the noise and what is the signal?” Bate said.
The CEO said the expansion of the company’s de-risking approach preceded recent events and issues with reducing U.S. assets on the balance sheet. “No. We’ve been preparing – we’ve been preparing.
“We’ve talked about the U.S. dollar before. Europe is particularly exposed to the U.S. dollar and it’s important that the U.S. government considers what it means if confidence in those assets declines. We’ve been watching that very closely. At the same time, we’ve been optimizing diversification carefully and thoughtfully, and that’s a key point.”
The panel concluded with a discussion on diversification and risk assessment, including whether Allianz expects further weakness in U.S. assets.
Bate concluded: “It depends on what happens in the next few months. The biggest risk is a fundamental loss of trust in the future of the U.S. financial system. We don’t think that risk will materialize. I’m an optimist, but I’m also a cautious optimist, so you could say I’m a cautious optimist.”
