Cutting and Investing

Ergo Banks on Digital Overhaul

  • Why it matters

    Why it matters

    The primary insurance arm of Munich Re plans to slash jobs and costs while repositioning itself with new online and traditional offerings. Among the biggest challenges, however, will be maintaining morale in the sales unit – the focus of its restructuring.

  • Facts


    • Düsseldorf-based Ergo plans to slash 2,400 jobs over the next four years – mainly in sales – while reducing costs by €280 million ($305 million) through 2020.
    • As part of its restructuring, the insurer will merge its individual sales units into a single division by January 1, 2017.
    • Leading the overhaul is 44-year-old sales executive Harald Christ, who once was tapped as economics minister in a Social Democratic Party shadow cabinet.
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The Ergo headquarters in Düsseldorf. Photo: Victoria Bonn-Meuser/dpa

Harald Christ, the new head of sales at Ergo, Germany’s third-largest insurer, relishes a challenge.

Which is a good thing, since he’s helping the Munich-Re subsidiary through a particularly sensitive restructuring that involves cutting 2,400 jobs over the next four years – primarily in its sales department.

It is part of sweeping plans to reduce costs by €280 million ($305 million) through 2020.

“Ergo certainly is one of the most demanding assignments that one could undertake in the financial industry at this time,” Mr. Christ told Handelsblatt in his first interview since joining Ergo in July.

As part of its strategy, the Düsseldorf-based insurer plans to merge its individual sales units into a single division by January 1, 2017.

“We must forge a powerful unity from the various sales divisions and their cultures, and make one of the largest insurance companies in Germany more efficient,” Mr. Christ said.

Despite the fundamental reorganization and deep cuts to workforce and spending, the mood in the sales department remains positive, according to the 44-year-old head of sales. While many colleagues lamented the job losses, they understood the moves were needed, he said.

“Ergo isn’t just cutting; rather we are also investing – and we are seeing the first successes,” Mr. Christ added.


“What will matter most is that we will soon win back market share.”

Harald Christ, Head of Sales, Ergo


Among those is a modest boost in new sales even amid the restructuring.

“As a general rule, sales decline when you go through such a restructuring,” he said. “But in Germany we’ve seen moderate growth in new sales compared to last year – and this despite our massive overhaul.”

After years of setbacks and eroding market share, Mr. Christ said Ergo plans to go on the offensive and regain lost ground.

“We want to play at the top of the pack and grow again in new sales,” he said. “It’s not so significant that we have lost market share in recent years. What will matter most is that we will soon win back market share.”

The insurer wants to become “fit, digital and successful,” he said.

Specifically, Ergo plans to leverage its cost savings to offer a range of products “that will be more attractively priced and cater to customer needs better than before.”

“We are reworking our entire portfolio,” he said.

Last week, for instance, Ergo began offering coverage to protect small- to medium-sized businesses in Germany against the rising threat of cyber attacks.

In September, Ergo also added a new state-subsidized annuity to its life insurance division and expanded its art insurance segment to cover private collections. Previously, it offered coverage only to art exhibits, museums and galleries.

The company currently is rolling out new auto insurance products as well, Mr. Christ added.

Ergo sales chief Harald Christ likes a challenge. Photo: Ergo

Among the most important initiatives of Ergo’s restructuring strategy, however, is its digital transformation. The insurer plans to pump €1 billion into modernizing its information technology and expanding its online offerings through 2020.

By the third quarter of 2017, Ergo plans to launch a pure digital brand called Nexible, aimed at customers interested in an online-only insurer.

“There is definitely a segment of customers who decline absolutely every form of personal consultation,” Mr. Christ said. “That is a clientele we will not leave to our competitors.”

But Ergo’s overarching strategy is to link online and traditional sales channels, he added.

“Very clearly, it doesn’t work without digitalization,” Mr. Christ said. In his view, however, “qualified advice” would remain a fundamental requirement of insurance sales.

The sales chief said Ergo has completely moved on from a 2011 sex scandal – dredged up again this year by litigation  in a Hamburg court – involving a company-sponsored orgy at a Budapest bathhouse.

“For us, the topic of Budapest is finished. Now it’s about looking forward,” he said.

Mr. Christ is not daunted by the challenges ahead.

“Honestly, simple assignments do not excite me. I am driven by complex challenges,” he said.

His resume attests to that. The Ergo sales chief previously led Postbank Finanzberatung after working BHW Bausparkasse, Deutsche Bank and Westdeutsche Landesbank.

Mr. Christ also has a history of mixing politics with business and finance. In 2009, he was a member of the center-left Social Democratic Party’s shadow cabinet under former Foreign Minister Frank-Walter Steinmeier and was tapped to become economics minister, had the SPD not lost to Angela Merkel’s conservatives.

“I find it important for managers to also participate in politics,” he said. Politically active since the age of 16, Mr. Christ may someday again consider a political role.

“One can still start a political career after 60 – in this sense, I still have a lot of time.”

For now, Mr. Christ is happy to apply his political experience to his business career.

“In politics, one learns that political friendships are only first proven when it comes to a stress test,” he said, adding that the same was true in business.

“Often one has fewer friendships than one previously thought.”

The next several years of restructuring are likely to put his new friendships at Ergo to the test.


Carsten Herz leads Handelsblatt’s asset management and insurance coverage and is based in Frankfurt. To contact the author:

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