Alexander Protsenko, new CEO of Allianz Hungária to embrace change and motivate colleagues in digital era

Combining his ambitions with peaceful style Allianz Hungária’s newly appointed CEO, Alexander Protsenko took over his office at company’s headquarter this summer. As the regulators gave green light to his appointment, he brought his decades of experiences in insurance business to the board. Born in Ukraine, spent 30 years in Germany, during his career he benefited from his understanding of Central and Eastern European business culture. Since he worked in different roles from sales to finance in different countries like Switzerland, Russia, Bulgaria, Kazakhstan he really has a broad perspective and experience. – Welcome to Hungary Mr. Protsenko!

What are the similarities and differences between the foreign and Hungarian insurance markets?

The Hungarian insurance market is one of the most advanced in the CEE region, considering various dimensions e.g. advanced products, technology and services. For example, we are offering digital signatures, which is not yet possible in some countries. On the other hand from penetration point of view I see a big potential.

What do you think exactly?

If we compare the Hungarian insurance market to more mature markets, like Germany, we see the way forward. There is a good basis here in Hungary that we can build on. There is a significant market potential for sales because the penetration of pension, life and non-life insurance are still relatively low.

If you see the evolution in the society as people buy more cars and apartments, more expensive devices, at some point they start to care about how to protect all these assets and themselves as well. We are reaching the moment when we ask how to protect the acquired wealth.

– Alexander Protsenko points out.

The Hungarian insurance market in many areas are more advanced than Western Europe, however there is a big difference. There is a tradition there we don’t have here yet. After decades of experience people understand the importance of protection: parents told to their children they need to protect what they had succeeded or acquired – for this mentality to develop we will need more time.

What are the biggest challenge insurers facing these days? What is the biggest challenge for you as a leader?

Talking about insurance industry as a whole, the main challenge we have is to be more simple and faster. The insurance industry worked reliably, stable and without major changes for decades and centuries, but thanks to the arrival of the digital era the environment is changing now fast and in a dramatic way. In addition, we are too complicated, just look at the terms and conditions with many pages. We have complex products, but customers don’t care anymore. They expect some “mobile phone-like type of experience”, that is simple in use, fast and reliable, despite complex soft and hardware behind. And this is the point when we must adopt the new kind of culture of our times. Which was normal in the past, e.g. wait weeks to settle claim, is not acceptable today: customers expect us to respond fast and communicate in real time.

Challenges for me personally – as part of this community – is how to explain that the environment is changing very fast, and to embrace this change together.

– Alexander Protsenko reveals.

What do you think will be the top global business risks in 2020?

Allianz Group is conducting its annual risk survey at global level, and most of them are valid for Hungary as well: Business interruption and Cyber risk was almost number one, they appeared very recently out of nothing. Other risks are Natural catastrophes (2), followed by Economic environment (3), Market conditions (4) and Regulatory environment (5). Hungary is characterised by Shortage of qualified labour experts (6), but we see this happening across the entire CEE region.

Can you expect cyber risk as a number one risk factor next year?

Cyber risk is a topic that will become more and more important. If you look at global risks, cyber risk is not perceived to be a big segment yet, but it is a hot topic and evolving very fast. Allianz offers protection against cyber risk across the globe, but we see different levels of demand in different countries, based on the recent, publicly visible experiences.

How do you see the economic environment as a risk factor in CEE?

The question here is: “Are we going to follow Germany on the downturn?”, Can we counterbalance the trend locally?” – German economy has been slowing down for several months now. It takes typically some time to feed through the entre supply chain. To balance this out we need to strengthen the local demand. And it is not only about the car industry. We see various measures and up to now the situation was good and downward correction in the forecast was relatively small. In the long term there is definitely growth potential on the market.

What do you think about the insurtech developments? Do they support or endanger the current market share of Allianz?

Perhaps one or two years ago there was a bigger fear about this. Today we see many more synergies and cooperations, – we can benefit from each other. Startups benefit from large customer base and strong technical expertise while the established companies benefit from the new technology and ideas. The main learning for me is that insurtech start-ups, offer not just something completely new, but rather known products and services, however in a much simpler and more convenient way for the customer. If we are too slow to adopt, if we wait too long, – then insurtechs would become a risk.

Apart from the Insurtech developments, I see the bigger challenge rather from the big platform providers, etc. They have access to a huge customer base, a well-established brand image and strong reputation for great customer service.

– Alexander Protsenko explains.

If you look at the Asian market, the largest insurance company in China is a “platform” and a high tech company, and not an insurance company anymore. The answer of Allianz Group is a strong digitalisation effort and Allianz X, the digital investment unit that invests in digital growth companies related to insurance.

Considering the IT evolution, what further developments are expected at Allianz Hungária in the near future?

We continue our work from a very strong basis and will reinforce and accelerate the past achievements, however the focus will be shifted a little bit. We will concentrate on internal efficiency developments, speed up the processes and improve our tools, but also address the experience of our customers. We want to get more concrete benefit from available technologies, e.g. a video claims assessment tool, was recently introduced, that is a beautiful and convenient service for our clients. We are currently reviewing our initiatives to find out what else can we do, with strong emphasis on the customer experience.

In terms of services, are you working on some new or innovative insurance products? And what has become the outcome of the product simplification?

Clients are afraid of complex insurance contracts. They would like to have choices, but easy to understand and not too much. Two or three options used to be enough – these are simple choices. If you look at the deals in a smartphone store you will see a basic, mid-level and professional device and – of course – the colour variations and that’s it. People already get used to make simple choices. Using this analogy Allianz Hungária introduced new products as packages based on customer needs. They are simple, straight forward and provide different level of protection – based on customer needs. Everything is transparent and it can’t happen that something is not covered, just because the customer has not read the terms and conditions of the contract. Our obligation is to explain customers they are fine, they should not worry about the details.

And what motivates you personally?

In insurance, we normally talk about coverages, prices, interest rates and services. People tend to forget the social component of the insurance – and this is one of the main reasons why I am working here:

We are here to help people in difficult situations. They are approaching us often when something bad happened and this is the point when our service counts. This is the moment of truth, a very special time for our customers.

 – Alexander Protsenko explains.

In many cases when customers reach out to us they have a problem, – someone who needs roof over the head after a devastating storm, who needs a car to go to work after an accident. A claim is a chance to support and help the customers, because this builds trust – the main currency in our industry.