New digital Allianz Europe unit to serve as beacon, says CEO

The new digital player that Allianz is creating in Europe is set to serve as an example of what the existing agent-based units could achieve if they modernize processes, CEO Oliver Bäte said during a Nov. 30 press conference.

Allianz is creating a new European unit which will operate online-only instead of via the thousands of insurance agents currently involved in the distribution of products.

The new organisation will start by combining the direct businesses in Germany (AllSecur DE), the Netherlands (AllSecur NL), Italy (Genialloyd) and Spain (Fenix Directo).

“We want to take the opportunity to start without legacy systems and create an efficient organisation by using modern technology which can show our existing units what they may be able to achieve through the modernisation of processes,” Bäte said.

The new unit is expected to grow from around €1 billion gross written premium in 2017 to €3-5 billion in the mid-term, according to the presentation. This growth may involve both organic growth as well as potential acquisitions, Ivan de la Sota, chief business transformation officer at Allianz, noted during the presentation.

The unit is expected to produce an expense ratio at around 12 percent.

Genialloyd today has an expense ratio of below 14 percent while this ratio is higher at the other units participating in the project, De la Sota noted. The plan create economies of scale by expanding the operations, he explained.

The new unit is also expected to pay around 90 percent of claims within 24 hours while less than 1 percent of claims should be rejected.

“We see a market opportunity here as no one else has taken this step before and leverage the potential of digital global client potential,” De la Sota said. “We want to be the first. Of course, you have to be able to offer highly competitive pricing in the digital world which means that we will have to operate at a very competitive expense ratio”.

Allianz wants to leverage the expertise of its local specialists in the units participating in the project and make use of sophisticated data analysis to produce the most competitive product for the direct market. Prices will be calculated locally and the products will differ from the ones offered by the offline units, De la Sota explained.

At the same time, Allianz wants to strengthen the traditional model within the group by empowering agents to solve all issues independently, he suggested.

“There is practically no cannibalisation between the agency and the online businesses,” Bäte said. “This is partly because in most markets our market share in the personal segment rarely exceeds 15 percent and is usually below 10 percent. Therefore, 90 percent are not Allianz clients,” he explained.

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