Munich Re reshapes Asia-Pacific and Africa P&C business

Munich Re has unveiled a new organisational structure for its Asia-Pacific and Africa (APA) P&C business, Intelligent Insurer has learned.

It is a shift away from the more traditional structure where markets that are close to each other are managed together, towards one that focuses more on the maturity of markets. Three new market clusters have been created, which broadly cover China, developed markets and emerging markets.

Local approach

This strategy shift was born out of the pandemic, when travel was restricted, Achim Kassow (Pictured), Munich Re board member with responsibility for the APA division, told Intelligent Insurer.

Kassow took over responsibility for APA in 2020 when global pandemic lockdowns were at their height. “We were not able to travel anywhere, we just had video conferences. So we decided that we should go even more local in our business approach than we did before.”

He said: “In a way the pandemic was a driver in getting closer to clients, and proximity a key to success, because at that time it was the only way to continue with relationships. Now with the hindsight of the last two and a half years, the pandemic as a catalyst to become even more local has turned out to have given the right way to move forward, also in terms of structure. We looked at our numbers and they showed that we are on the right track.”

Munich Re saw approximately 30 percent growth for its top line in the region in 2020 and 2021 combined. This year will again see double-digit percentage growth, confirming for Kassow and his team that their strategy during the pandemic had worked well.

The three newly-defined business units for APA are China, Cyber and Consulting, which will be led by Tobias Farny; Developed Markets, which will be led by Roland Eckl based in Singapore (comprising Japan, Australia and New Zealand, South Korea, Southeast Asia); and Emerging Markets, which will be led by Hitesh Kotak based in Mumbai (comprising India, South Africa, Middle East / North Africa).

Kassow explained: “Japan, Australia, Korea have things in common, eg the need for large nat cat capacities, so there is a certain connection across these markets and we wanted this to be reflected at the management level. The result was to have one focus on developed markets.

“At the same time, emerging markets also have patterns in common, eg strong growth dynamics, that we wanted to accommodate with our structure. China forms a category of its own, due to its size, specifics and long-term dynamics. There is no second China.

“These three different pillars in the region, developed markets, emerging markets and China, reflect what we have learned during the pandemic, that you need to look at local client needs, you need to focus on proximity, and then derive the structure from that. In that way, the new setup is a bottom-up structure, rather than a top-down structure.”

Kassow said that as the new structure rolls out he would like to see it pay off in terms of delivering superior service to clients. “I strongly believe in local teams, you should have local proximity, you need local knowledge.”

Sharing knowledge

He emphasised the opportunity for greater shared learning across the APA region and Munich Re’s global business. “In a global firm you can learn from colleagues who are operating in the same firm but in another market that has a certain similarity in terms of client demand patterns. For example, there are global players operating in markets like Australia or Japan, with which we work all over the globe. Our team in Sydney and our team in Tokyo face the same challenges in providing clients with global perspectives, and also global solutions.

“Whereas, if you're operating in the Middle East, in parts of Africa you have to serve totally different demands. Here you would perhaps see clients asking for more services around the motor book of their business, because it's 50 to 60 percent of their overall top line. So demand patterns are different.”

Kassow said that the new structure will enable different teams to leverage the in-house knowledge in those groups of expertise around markets. “That's basically the idea behind it, stronger collaboration internally, stronger networking of the strength of the group globally, that at the end should deliver a better customer service.”

The changes will also create synergies and efficiencies for the reinsurer. Kassow is quick to acknowledge that for many people ‘synergies’ mean headcount reduction but that is not the thinking behind this restructure. “The amazing thing here is that if we're talking about synergies, we’re talking about better service and growth opportunities.”

In fact, Munich Re grew its headcount in the region by 19% since 2020 and Kassow said the intention is to continue to do so.

“The challenge we have is getting superior quality of service to our clients. The synergy we strive for as part of the restructure is really more on the qualitative side. Reducing our headcount is not part of what we're planning. It's the other way around, it's basically growing the business by delivering better services.”

The new structure will come into effect on January 1, 2023.