Allianz unveils major overhaul as AGCS CEO plots path to regain profitability

Allianz Global Corporate & Specialty (AGCS), the industrial insurer of Allianz Group, has launched a major transformation strategy to "regain profitability and market leadership" in the corporate and specialty insurance segment.

CEO Joachim Mueller expects the transformation programme, called “New AGCS”, to result in "significant profitability improvements" to AGCS's underwriting results from 2021 onwards. The leaner regional structure is aimed at reducing complexity to drive cost out.

Under the new structure, the company will strengthen its technical capabilities across its core underwriting and claims functions, streamline its organisation and processes, enhance its current distribution and sales function, as well as invest in digitalisation to further evolve its core business and customer offering.

AGCS will simplify its regional organisation reducing the number of regional units from seven to six and moving from a country-centric to a more global set-up, and the leadership will be consolidated under one regional managing director. The current regions North America, Asia Pacific, Central & Eastern Europe, Regional Unit London (including Nordics) will remain unchanged. The future Mediterranean & Africa region will consist of France, Benelux, Italy and Africa (which now brings the whole of Africa under one AGCS unit). Spain/Portugal and South America will be merged into one new ‘Ibero/LatAm’ regional unit, reflecting market links between across these countries.

Further, there will only be two chief regions & market officers on the AGCS board of management, Bill Scaldaferri for North America and Henning Haagen for all other remaining AGCS regions and markets globally.

The regional leadership will change for some regions. Nuno Antunes will join AGCS from AIG to lead the Ibero/LatAm region and Alfredo Alonso will move to AGCS from Argo Global, responsible for the regional unit London.

Corinne Cipière, currently country CEO for France, will be the new regional managing director for the Mediterranean & Africa region. The regional leadership for Asia Pacific (Mark Mitchell), Central & Eastern Europe (Hans-Joerg Mauthe) and North America (Bill Scaldaferri) will remain unchanged. While Europe and North America will remain key strategic markets, AGCS plans to selectively develop its business in other regions, notably in Asia.

“We will now focus our entire business under a new strategic direction," said Mueller. "We will put technical excellence in underwriting before growth, simplify and strengthen our global model to ensure that we think and act as one team, and become more efficient, leaner and faster – benefitting us and our clients. Our joint ambition is set high: The ‘New AGCS’ will be the market leader in our target segments. We expect to see significant profitability improvements of our underwriting results from 2021 onwards and aim to achieve the full turnaround and transformation of our company by 2024.”

Under its new strategy and business model, AGCS will create a dedicated global sales and distribution function, led by Patrick Thiels, who is currently AGCS’ regional CEO for the Mediterranean region. Additionally, Nigel Leppitt has been appointed to the role of global head of multinational to oversee AGCS’ global insurance programme offering for multinational companies; previously he was AGCS’ chief transformation officer.

Guy Money will join AGCS from AXA Group to lead global product management to drive its global model and reduce cost and complexity. Another new function, global process management, will be led by Erika Cubova who moves from her current role as global head of claims portfolio intelligence & coordination.

AGCS said it will continue to focus on specialist property & casualty insurance solutions, targeting complex risks for large multinational corporates or companies seeking expert solutions, such as Specialty segments in aviation, marine or entertainment. Mueller said: “This should be our core stronghold and key differentiator. Here we win on deep risk expertise, outstanding claims management, and a strong relationship model that creates value and solutions for customers, bringing together all of AGCS and also Allianz Group worldwide.”

The insurer will also continue to serve mid-size companies in the USin particular through its MidCorp line of business which generated €965 million in gross net written premium in 2019. “With dedicated turnaround measures and selected segment exits such as Agribusiness in the US or MidCorp in Canada, we have re-positioned our portfolio and achieved real progress in this part of our business. We will now focus on securing the benefits of the profitability and expense improvements in the current hardening market environment,” Mueller added.

Furthermore, AGCS will significantly invest in expanding technical capabilities and skills in its core insurance business to ensure long-term sustainable underwriting performance. This includes strengthening capabilities and tools in pricing, portfolio management, loss trend analysis, volatility management and actuarial modelling, with over 30 new additional roles identified. “We have already significantly reduced our exposures in our portfolio and will continue to apply corrective actions and adjustments where needed. Underwriting is the engine of profitability and we must truly regain our position as a technical underwriting company leveraging our talents as well as new technology and analytic tools,” Mueller stressesed.

Digitalisation will be another cornerstone of the AGCS strategy. “Expanding the use of data analytics and digital technologies for both our core business and for our customers will be crucial to deliver the new AGCS ambition”, Mueller explained.

Mueller concluded: “Building the ‘New AGCS’ is not business as usual, but the opportunity has never been greater. It means a big leap forward through the comprehensive transformation of our company. With the new leadership team and a clear focus on our target clients in the right segments and markets, we will drive for market leadership, putting AGCS back on top of our industry for our customers, employees, and for Allianz Group.”