Allianz's digitalization

Insuring For the Future

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One swipe and you're insured.
  • Why it matters

    Why it matters

    Allianz is battling to move away from its traditional network of insurance shops to online sales.

  • Facts

    Facts

    • Allianz is the world’s largest insurance company, and Italy’s third-largest supplier.
    • More than 130,000 Italians have signed up to its online service since its launch in March 2014.
    • The company says digitalization is important, but that the need for insurance agents remains.
  • Audio

    Audio

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It’s a hectic scene along Corso Italia, a street in the historic center of Milan. But the branch of Allianz Italia offers a serene haven from the crush of pedestrians and noisy streetcars outside.

At the entrance stands a gleaming white stand with a huge touchscreen tablet built into it. With the swipe of a finger, customers can take out or adjust an insurance package: A homeowner’s policy here, a little less disability insurance there, and that’ll be €18 ($19.60) a month.

Welcome to the branch office of the future.

The modular package offered in Italy by the world’s largest insurance firm is called Allianz1, and it is marketed with the slogan “Subscribe to Serenity.” Up to 13 kinds of insurance can be fitted into a single contract, requiring only four signatures where before it would require up to 80.

Since its introduction online in March 2014, more than 130,000 Italians have signed up to one of the monthly umbrella insurance policies, even though Italians are notorious for being underinsured. “Even we were surprised at the success,” said Klaus-Peter Röhler, the head of Allianz Italy, the country’s third biggest insurer.

“Our business model is now set up so that an appreciable part of our business, from customer contact to processing transactions, takes place digitally.”

Michael Diekmann, Allianz CEO

The reason is probably the ease with which the product allows customers to create a personalized policy themselves, whether at home on a computer or in a branch office. “We used to have to answer questions for 30 minutes, first of all, before they could see an initial quote,” Mr. Röhler said. He hopes to introduce a similar package product for small businesses from July.

Allianz has traditionally relied on a huge network of small insurance shops where policies are sold face-to-face, and is now battling to reinvent itself in the digital age.

Italy is the blueprint, but Allianz could soon offer both the online subscriptions and the new branch office model in other countries. Another export that could emerge from Italy is the digital insurance agency, a platform sales agents can access using a variety of digital devices.

“Our business model is now set up so that an appreciable part of our business, from customer contact to processing transactions, takes place digitally,” Allianz CEO Michael Diekmann told Handelsblatt. He sees “an enormous upside potential in the field of digitalization.”

“This necessitates a high level of investment and, because of its profitability and strong capital base, Allianz is positioned to successfully undertake this effort,” he said.

Mr. Diekmann expressly praised the Italian contribution to the company’s plans.

“The strong sales figures are not the only proof of how successful Allianz’s efforts at digitalization are in Italy,” he said, noting that for the first time, Allianz has climbed to the top of the heap in brand recognition and status in Italy.

This isn’t only because of its insurance packages, but also because of its “Fast Quote” system for car insurance, a groundbreaking effort to deliver an online cost estimate within 60 seconds simply by providing the car’s license plate number and production date.

“Allianz has ultimately profited from the fact that competitors were too preoccupied.”

Thomas Seidl, Analyst, Sanford C. Bernstein

However, Allianz’s success isn’t entirely down to its own efforts. While the Italian operations are running well and new products have increased the company’s market share, it has benefitted from competitor inaction.

“Allianz has ultimately profited from the fact that competitors were too preoccupied with themselves,” said Thomas Seidl, senior analyst at investment research firm Sanford C. Bernstein. “Generali has consolidated more than ten companies into three. And Unipol had to digest its merger with Fondiaria Sai.”

The analyst also noted that because of its weak economy Italy has the best combined ratio of property and accident insurance in the corporate group. And with Italians driving less these days, there has been a notable decrease in traffic accidents.

Still, Italy is much further along in digitalization than other nations. In addition, the 2007 merger of Ras, Lloyd Adriatico and Allianz Subalpina to integrate Allianz operations in Italy was a good thing for information technology, said Mr. Röhler. “It was an advantage that we didn’t have a good enough IT platform at the fusion of the three companies,” he explained. “We had to develop a new IT platform.”

Regardless of the rapid pace of digitalization, Mr. Röhler still believes in the classic insurance agent. “The agent channel is enormously important to us,” he said.

In Italy in particular, the agent is often helpful in dealing with the complicated bureaucracy. This has led to the development of a hybrid model, where customers do research online, but buy the policy offline.

 

Katharina Kort is Handelsblatt’s Italy correspondent, Kerstin Leitel covers banks and insurance companies. To contact the authors: kort@handelsblatt.com, leitel@handelsblatt.com

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