The investment outlook is changing rapidly in the post-covid world and environmental, social and corporate governance (ESG) is fast becoming a key element in investment decisions, says Ritu Arora, chief executive officer and chief information officer, Asia, Allianz Investment Management Pte Singapore. Limited, and India adviser to the Board of Allianz SE, in interaction with Mionach. She also talks about the company’s plans to allocate capital to India. Edited sections:
What has been the story of Allianz Investment in India so far in terms of used capital, large contracts, and commitment? Do you plan to increase satisfaction in the coming months?
For Allianz, India has always been a major focus. We have long-standing strategic relationships and partnerships. Allianz has been serving the Indian insurance market since 2002 through two successful joint ventures, Bajaj Allianz Life Insurance Ltd and Bajaj Allianz General Insurance Ltd. We have also established an insurance business, Allianz Global Corporate and Specialty. We have also been steadily expanding our portfolio investments in India with a commitment to be a partner in the growth and development of India. We have made significant investments in road assets through our investment in private InvIT L&T IDPL and in commercial property through investments through our various joint ventures. Allianz has also become more involved in the private debt space in India to support small, medium and large enterprises with long-term, specialized and flexible critical credit, especially in co-operation. the text of the restrictions facing banks and non-banking financial companies. Following the introduction of the Bankruptcy and Bankruptcy Code, Allianz has been heavily involved in the Indian credit market across the spectrum of distress, acting and special situation opportunities. We believe that India’s structural growth story holds great promise and Allianz will continue to participate in India’s journey to a $ 5-trillion economy by investing in critical areas such as infrastructure, private debt, real estate and ESG.
How has covid shaped your investment strategy?
From an investment perspective, India has traditionally been a market where valuations have always been challenging. The pandemic has led to some interesting investment opportunities as valuations have corrected. We have been evaluating various opportunities and, in some cases, have moved forward by closing these investment opportunities in India.
What sectors are attractive in the long run and in the long run?
As a long-term investor, we found regions with a focus on India’s domestic growth story, such as automotive, consumer, and banking, financial services and insurance attractiveness based on unique selection opportunities rooted in each of these investments. Due to its favorable demographics, long-term growth path, high-profile corporations and strong institutions, India is uniquely positioned as one of Asia’s most attractive investment destinations and emerging markets. emerges.
Allianz is one of the largest insurance companies in the world. Drawing from your knowledge what are the key growth drivers for the insurance sector in India?
India’s insurance industry halted double-digit growth in 2019, making it a potential heavyweight amid emerging markets in the insurance industry. There has been great promise due to the growing middle class and the favorable demographic divide. However, the transformation from commitment to success story needs the right set of government reforms. To stimulate growth, it needs to build infrastructure, create jobs, invest to enable technological innovation, and expand into newer markets and underserved areas. The insurance sector needs large and stable capital flows. Enabling more global investments by relaxing from foreign direct investment practices will help this need in the medium to long term. Tax cuts and more incentives for policy makers will help a lot. It would also be crucial to create a sustainable regulatory environment, which is directly linked to the confidence and commitment of global investors to the Indian economy.
As an investment philosophy, ESG is fast gaining traction in India. How do you integrate ESG into investments in India? How do you see acceptance in India?
ESG is an important component of Allianz DNA. For us, as an insurer and investor, environmental protection is part of our core business and ESG integration is an active choice as a business and investment opportunity. We use our ESG knowledge and insights to make better investment decisions by taking into account the risks and opportunities of ESG that are not fully priced in by the markets . Globally and in India, we are now taking a three-pronged approach – risk, return, impact – on investment. We have responsibilities to our policy makers and, as such, aim to change the returns from investments by minimizing their sustainability impact. It is heartening to see the adoption of ESG investing in India in recent years. ESG funding saw higher inflows in the first quarter of 2020, reflecting the willingness of sustainability investors to continue and stay focused on long-term horizons. As more and more governments and corporations adopt ESG, we hope that these trends will accelerate.