How many insurance contracts does a person have, who works for an insurance company?

Seven or eight, in two countries – some still active in Germany where I used to work for several years. And it’s still not enough. (laughs)

And how many insurance contracts does a typical Hungarian customer have?

In terms of the number of policies purchased, on average probably less than 2 policies – but those with more assets and properties, higher life insurance needs and income may have more. Still, the average number is not yet enough. Insurance is your financial plan’s safety net – having the right types of insurance at the right amount protects you and your family from unforeseen events and provides a baseline financial cushion. And this, especially at challenging times is vital. For this reason, one of the opportunities but also one of the biggest challenges, is to further increase the share of protection and life insurance as higher value-added insurance solutions.

You have a lot of experience in this industry. Do you see any differences between the Hungarian and the CEE-regions’ customers and those of other countries?

Different countries are at different maturity levels when it comes to insurance penetration. There could be different reasons for that. Usually regulation, tax incentives play some role, but also different levels of size and strength of economy and general financial maturity and savviness, plus what is relevant is the disposable income. As a baseline, obviously the more disposable income people have, the more they are able and willing to buy insurance beyond the mandatory covers, for example life, health and invest in savings solutions. There are of course other factors that influence our attitudes towards self-care, but when it comes to the needs and behavior, I don’t think there is much of a difference.

What do you think Allianz as a global brand can bring to customer experience at the local level?

We have a strong, reliable brand with more than 130 years of history. Based on different official rankings, Allianz continues to be the top insurance brand and is among the top 30 most valuable brands worldwide. Our core promise is that We secure Your future. This is reflected through providing security, assuring that Allianz is there to help, protect and secure peace of mind. We are locally in Hungary also recognized, as one of very few brands, winning the Superbrands award for 20 years in a row. This speaks to stability and consistency of delivering value to our customers. Our work locally is to translate this positive brand perception into local actions to further build strong consumer connections. In recent years we have refreshed our sales processes, simplified our product lines and worked on modern servicing. We are working further to improve servicing, as an example enhancing our customer portal, so customers are able to view all their insurance data, contracts and make changes in one place.

Going back to what you have just mentioned, ”peace of mind”. How do customers enjoy that?

Insurance is a service industry, it is essential that our services and products offer added value. We want to provide a positive experience so customers feel that by choosing Allianz, they get a positive experience and peace of mind even when it comes to basic insurance packages. For example, our motor third party liability insurance (MTPL) policy provides included roadside assistance, but also legal support and personal accident coverage. If the water pipe breaks, our customers with home insurance get rapid assistance from us. Or, when it comes to travel insurance, our cover comes with benefits including tele-medicine advice and a 24/7 Hungarian language hotline.

Sometimes the insurance industry gets criticism over not staying well ahead in digitizing their services. How do you see that happen at Allianz in Hungary?

As far as digitalization goes, there is ongoing work still to be done, and this includes also supporting our customers’ understanding of the various digital tools by which we aim to service them. Overall, with some recent innovations I see Allianz Hungary probably ahead of the market currently.

For instance, we are transforming our claims process with the digital claims notification and tracker, which makes claims processing quick, easy and transparent. We are digitalizing and speeding up our processes in motor insurance – and AI can be a key to success as it helps us optimize processes and become more efficient. Our AI-assisted car inspection assesses the state of your car, eliminating the need for an in-person inspection for casco coverage.

Or, I can also mention travel insurance where we introduced blockchain solution. If a flight is cancelled or delayed by more than two hours, an automated payout can be initiated. Simple, automated solution to our customers embedded in our travel insurance product. However, we still have to improve how we transition from old to new tool and process, both internally and how this can be made even more easier to our customers. 

These are very good examples on how digital technology and AI are shaping customer experience. But how does customer experience evolve and what trends do you see?

In my opinion, customer experience is now more important than ever. In general, on the increasingly popular social media platforms consumers can easily look for proof if a product or service is credible, plus they have much more choices to check the different offerings. Therefore, for a brand to sustain and thrive in the long-term, services and products have to provide proper value and deliver as a minimum good experience at any touch point. We are moving towards a more proactive approach to customer engagement, even when it comes to cancelling a contract. We also want to make sure that our outsourcing partners – car repair shops for example – provide fast and quality service to our customers. And there is more in the pipeline.

If you could create a new customer experience metric or measurement, how would you go about it?

We probably have even too many metrics, especially in our industry. But perhaps not enough for customer experience. The core is to provide the best possible service at any touch point. And, to me this is that combination of digital and human touch and then being able to serve the customer in the way they choose.

Could you name a metric that you find essential to understand customers?

Our Voice of the Customer (VoC) program is an excellent example, it is rolled out globally.  At any touch point we ask our customers to give us 1 to 5 star rating and comment our service. We aim to take up customers’ feedback regularly as it provides crucial intelligence into what customers truly need and appreciate – as well as what they don’t. And, those who provide lower rating (3 stars and less) we call to understand what went wrong and how to improve. We have a dedicated programme in place which reviews the customer journeys’ mapping areas of high satisfaction and those we should further improve. We are happy to see that our overall rating, in for example last months this year, is on average above 4.6 (on a 1 to 5 scale), which is really good, but I believe we could do even more than this.

Allianz’s current campaign is showing the benefits of being an Allianz customer. Why did you decide to come up with this campaign?

Our single aim with the campaign was to show the wide-ranging benefits that come directly from our products and services. This is important aspect when comparing different products and prices. We believe customers get more by default at Allianz, let it be innovations led by AI, wide-range assistance services or even loyalty discounts.  But these are only a few examples of how we serve our policyholders in their daily lives.
With smooth, secure, and personalized customer involvement, we aim to have Allianz Hungária becoming a more integral part of our customers’ lives, keeping our promise of securing their future.

Ez a cikk két nyelven készült. A magyar verzióért kérjükkattints ide.

We are living in turbulent times. What are the main factors influencing and what influence they have on the daily operation of Allianz Hungária? 

We are facing a very special and complex situation nowadays. Someone said that there are decades where nothing happens, and there are weeks when decades happen. We are having such times now, I think. This year started with Corona, by the end of February the war broke out in the neighbourhood with all the implications, the inflation started picking up, and by summer we found ourselves in the middle of a very heavy draught season, not to mention high interest rates and extra profit tax.

These economic developments have major impact on insurance industry and on Allianz. Unfortunately, it is not clear yet how it will continue in the future, because the full impact does not appear immediately, but is developing gradually. While the war came one day to the other, most of the other aforementioned factors are still evolving even today. The question is how quickly the market will adopt to this.

Remember the frog in the warm water? If you raise the temperature gradually, the frog won’t realize it until it’s too late.

With regards to inflation for example, it started growing rapidly since beginning of this year, the claims inflation is even higher than normal CPI.  We have a large Motor portfolio, therefore the inflation, especially the claims inflation affects us substantially. This also applies to real estate’s inflation, repair- and construction costs. Increasing interest rates substantially influence the overall business from the capital side and from the investment side. While higher interest rates are positive for insurance on long term, on short term they are quite challenging. The good thing is that Allianz is a large and solid company and luckily, we started preparing quite early, by the end of last year.

How does the extra profit tax affect Allianz Hungária?

The extra profit tax affected the entire industry – as well as Allianz Hungária – quite substantially. The total amount is more than half of the technical result of the entire industry. I think, however, that we can put this into another perspective, a more positive dimension by considering this extra tax as our contribution to the Hungarian community in challenging times just like the drought-related claims for which the industry paid about HUF 40 billion to Hungarian farmers in 2022.

Compared to the ‘Covid era’ how was the performance of Allianz Hungária this year? What result are you expecting for 2022-year end?

The overall picture is more diverse, not completely black and white. If you look at top line, growth and some other developments, we can see further improvements compared to Corona times. We managed to improve this year in several areas, from which I would highlight customer satisfaction, which is very important to us. However, the financial results will be negatively affected, it will be lower than last year. Still, we remain profitable and several business lines are developing positively.

How has Allianz Hungária progressed with the various developments that the company started in previous years? Did you manage to finish any of them?

I think we continue the direction we chose some years ago, there is no change in that so far. We can be proud of some concrete results and started some new and interesting things. For example, we implemented the “Voice of the Customer“ program to regularly collect detailed feedback from our customers and now we are leveraging this feedbacks to further improve our products, services and processes. To enhance customer experience, we launched further products, simplified the quotation processes and introduced new digital tools for  easier interaction with us.

Has Allianz Hungária started something new and interesting IT development to cope with the economic challenges?

On the IT side, the insurance industry is experiencing a huge cultural change. In previous decades, we first changed core systems and then introduced new tools for the client based on it. The problem was that by the time we changed the core system, and started dealing with the client-side, the back end was already outdated and customer experience was not uptodate. So, this time we started with the front end, the customer facing elements (portal, quotation, product etc.) and now will go on to the back end.

We are introducing a new core system called ABS, and Allianz group standard system. This is a major change, because it will transform the way how the entire company works.

This system will help us to further simplify the processes in the background. This transition happens in many small steps not to endanger the ongoing operation. So, customers, partners, employees don’t feel any disadvantages.

We also started to further develop our analytical skills. A new Advanced analytics team was set up to leverage the huge amount of data we are using across different parts of the organisation.

Have customer demands changed toward insurance products recently? Are people more likely to buy insurance policies then before? Or are people just postponing their investments due to insecure economic and political environment? How do you see?

It very much depends on timing. If we look back, we could see positive developments after Corona. In spring and early summer for instance, travel insurance picked up much faster and much stronger than expected, and in general the expectations were positive. However, right now, we can see the first signs that the customers are realising the economic environment being worse than they originally thought, which changes their behaviour. People started to be more cautious and more sensitive on pricing due to the rising costs. In addition, high interest rates are influencing decisions related to life insurance policies. So far through the year this has been stable, but now, in the light of current economic developments, people have less budget, which might have further implications, and might result in decreasing demand.

We need to convince customers that cancellation of life insurance is not a wise decision these days. Insurance is to provide safety and protection for clients in challenging times.

We see customers starting to react to this new environment rather recently, perhaps in September or October. For example, due to the forint’s volatility there is an increasing demand for denominated life products.

Sustainability and environment protection is an important topic not just for Allianz, but for you personally as well. Last year you explained some of the efforts that the company was planning to do. Where does Allianz stand today?

It is always easy to announce things, but the question is how to follow up on them, to avoid “greenwashing”. Luckily Allianz, as a global company is very much committed and doing many things on this. We are one of the founders and the driving forces behind the global Net-Zero Asset Owner Alliance. There are very clear goals on CO2 emission, so we also have measurable milestones as well. For example, sustainability measurements are included in our targets, for company and management. For example, an exact number of CO2 emission or ‘share of electricity from renewable sources’. Specific initiatives we are undertaking can be grouped in three levels based on their impact:

• The first level is the investment portfolio. Allianz, as a group has an investment portfolio of about 2 trillion euros. We apply environment related standards onto this portfolio – so that many companies we are invested in, follow a more environmental approach..
• The second level is the insurance business. There are segments for which we are not providing coverage anymore, for example for coal based energy generation. We also launched a new product for electric cars to promote the uptake of these vehicles in Hungary.
• With regards to the third, the operational level, there are several practical things that we are implementing right now, like the level of energy efficiency in our office building, more solar panels on the roof, less travel and so on.

So, I think the time is over for talking about exiting initiatives, practical things and measures need to be done now. The main goal is 2050. But if you wait until then, it is too late already, therefore we have specific interim goals, as well. We already working on achieving those targets, , so we follow up on our promises.

How does the current economic situation affect the efficiency of colleagues at Allianz?

The current situation affects us in many ways. We kept the benefits and the flexibility we developed over the Corona time. For example, people can work from home two or three days per week and should come to the office at least for two days.

There are different tools as well – not only individual IT devices, but entire infrastructure, trainings and interactions become much more hybrid and flexible, so we kept them. In general, our people and their habits have changed in the past two years, Corona changed us, changed the way we work as an organisation.

How do you see the forthcoming years, for example what type of risks will emerge and cause more “pain” than before? What new emerging trends do you see coming?

No one really knows how the current situations will develop. We see some trends starting right now, but they depend on how the current economic situation will develop. That is why right now I would avoid predicting the future.

Our strategy will remain more conservative and more careful to sail safely through this stormy environment. Meaning not only for us but for our employees and for our customers.

This is the time to focus on high quality, resilience and high sustainability. As the saying goes: “There is a flight to quality” – and this is what we are building on now, in the current extraordinary environment quality and stability is appreciated.

Cover photo: Biztosító Magazin / Ferenc Árpád Kocsis.

How long have you been working in the insurance industry, and how did you become Market Management Director at Allianz Hungária?

When I joined Allianz Hungária in July 2022, it was exactly ten years since I started working at Allianz and in the insurance sector. Being grateful for development opportunities my company offers, I had a chance to work in different roles as well as geographies. Lately I was dealing with corporate development topics at Allianz head office in Munich and became responsible to develop and run bancassurance business in the CEE region. Prior to that, besides my engagement with Group Direct and Global P/C activities,  I was offered to join our retail distribution team in Sydney and grow our Direct business in Australia. Similarly this time, there was an exciting opportunity to come to Hungary, which I gladly accepted.

What are your goals and plans and how would you like to achieve them?

Allianz is one of the leading insurance companies worldwide, as well as one of the key market player in Hungary. With this comes the responsibility not only for shaping the market, but also further increasing awareness of the importance of insurance protection and offering innovative products and services to meet evolving needs of our customers. At Allianz customer experience is at the forefront, and it is one of our key objectives that makes us occupied these days. We work hard on improving our digital journeys and increasing the usage of our digital tools, being it at a point of purchase (via new quote and buy), service (customer portal) or claim (via online claims tracker). And we listen to the feedbacks of our customers through our Voice of the Customer initiative which helps us identifying areas where we should improve. Our plan is also to grow in new product offering and innovative services.

And to meet our objectives, we also rely on the great team that we have here in Hungary, which I am happy to work with.

Did you have any role models, an important person or leader who may have influenced your career?

It would be very difficult to name one specific person. I would highlight my family, parents, my wife, sister, and finally certain colleagues. Close circle of important people who have been supporting me throughout the journey so far. I was growing up in not easy circumstances in my home country, marked by unrest, civil war and hyper-inflation in the 90s, still I consider myself lucky to be able to say I had a healthy childhood. Looking at it professionally, I regard each experience as something that shaped me – even and especially in the challenging times. And there have been quite a few during my journey of life in 5 different countries so far.  

What type of leader do you consider yourself to be, and what are your main strengths?

I see myself as a dynamic and passionate leader who likes to try new things and I challenge myself consistently. I like to connect to people, promote diversity of thinking, create an atmosphere of trust, a kind of “safe zone”. I believe these are very important in building and running successful teams. I like to take broader view and see higher purpose in the activities,but I also enjoy deeply seeing concrete progress, seeing execution. Sometimes, though, I can be impatient. Especially if I change environment where previously I got to do things in a different way or pace. The greatest value for me is the overall learning and how it supports me shaping further agenda and activities.  

Allianz introduced new initiatives and transformational projects some years ago. Can you share any information about the progress?

Yes, Allianz is on the ongoing journey of transformation, starting from central level with redefined strategic targets, set clear purpose and pillars for reaching overall objectives. Customer centricity reflected through our Allianz customer model, simplification of the processes and products, sustainability focus are some of the important elements of our strategy. We have done quite a lot already, which is also reflected in our brand image where – from the brand value perspective (Interbrand ranking) – we kept the position of a leading insurance brand worldwide 4^th consecutive year and increased brand value by 23% compared to last year. Still, if we benchmark ourselves to some other industries, there is further room to improve and we are committed to do this in our journey.  

Allianz is developing new and innovative products, some of them are completely new to the market. Can we know a little bit more about them?

We put important focus on innovation. Recently we launched a new health product and in motor insurance we designed new covers tailored for electric vehicles, including plug-in hybrids as well; anticipating new segments and growing customer needs.

If we look at how much of a burden the pandemic brought on the healthcare systems in Hungary but also across other countries, we can identify some critical elements. These elements can be supported from the product side: in order to make customers’ life easier. Being it through a possibility to get quicker doctor appointment, online consultation or needed screening in a selected medical center, as an example.  

This approach applies to customers who drive electric vehicles too. What happens if they run out of the battery in the middle of nowhere? Who is going to support them in such situations? This is what we need to think through when launching new and innovative products and services. Another innovation worth mentioning: we successfully launched first block-chain solution which provides possibility to our Travel insurance customers to get claim settlement instantly in case of a flight delay or cancellation – for this we only need in addition the bank account and flight number.

We live in a difficult time and environment both geographically and economically. What do you think are the biggest threats to the industry? What causes the most challenges these days?

This year seems as a “perfect storm”. If we look at inflation, interest rates and other macroeconomic developments further deepened through energy crisis, we see an unprecedented situation in which the World is right now. And we still haven’t properly recovered from the pandemics. It is difficult to predict what will happen with the current economic developments. Some years ago, we witnessed “new norm” of having negative interest rates, something not easy to imagine from traditional economic perspective, also penalizing generations of “savers”. Now we face sharp increase of interest rates (with inverted yield curves), and I would say late reactions from central banks to tame inflation, having as consequence fuelled recession risks with big pressure on local currency FX rates and budget deficits of many countries due to expensive financing. Beyond macro-economic developments, we can spend more time speaking of the impact of climate change, which can have some profound impact on the industry as well.

For us as an organization, what is very important – especially in these circumstances – is living to our purpose: “We secure your future”. Building on our resilience, stability and trust that customers place in us, in providing security and insurance protection – is in these times as important as it has ever been.

What do you think the future holds for the insurance industry?

If we look form the industry’s perspective, we are now in both challenging but also exciting times. Challenging because there is an increased level of uncertainty driven by climate change, geopolitical and macroeconomic risks. On the other side from insurance industry perspective new trends are creating new types of risks. Starting from new types of mobility forms that are emerging (e.g. autonomous vehicles), then risks in the digital space (cyber) etc. Industry needs to be able to understand these, provide proper solutions and price them properly. This, however, can be tricky, as insurance is one of the few, if not the only industry, where exact costs of the product sold are not known in advance.

If we look around, we can see that new risks are appearing, there are new types of behaviours in terms of transportation for example.

Climate change brings already some visible impact, this year we had unfortunate and unprecedented draught not only in Hungary but across Europe, which impacted agro-sector, among others. We also need to be mindful of the fact that with extreme developments there could be higher emergence of uninsurable risks in the future where proper solutions need to be provided through joint work of public and private sector. Insurance industry can and should have important contribution to limiting the impact of climate change and supporting shift to sustainable solutions, where Allianz is putting already quite some efforts and actions.

As a leader what advice would you give to younger professionals to help them build a successful and fruitful career at Allianz?

My advice to aspiring young leaders is to approach career as a marathon rather than a sprint. Be persistent and authentic, build and shape your confidence. Nurture feedback culture – ask for feedback and provide it openly whenever you have the opportunity, it will help you see things you don’t and create better connections with people. Try to see things through positive attitude, be kind to others. The environment is changing at a faster pace, try to find the right balance at the end of the day, and don’t forget to have fun.

A cikk magyar nyelvű verziójáért kattintson ide.

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How does Allianz demonstrate leadership in these areas? – What does client experience mean for the company exactly?

It is all about how the customers feel about the interaction, whenever they get in contact with us  –  I think it is as simple as that. For example, when you buy an insurance or have a claim, does your experience give you the confidence that your customer interests and convenience are put into the center of the process? These considerations are important, so this is customer experience – I would say. While we keep delivering high standard services, we need to show to our customers that we care as well. And this has to be in our focus regardless of the fancy buzzwords that are around these days.

Some people think client experience is – or will be soon – a „competitive battleground” that will stand as the measurement of business success. Compared to other companies in the insurance industry can you evaluate the performance of Allianz regarding client experience?

I fully agree that customer experience is the name of the game . I would not only like to consider our industry, but we also need to compare ourselves with other companies and industries who deliver excellent customer experience . If we are the best among the insurers, but the overall performance of the insurance industry is bad, then the customers will not be satisfied. Perhaps because they got used to other companies and industries where things are more convenient, simple, and fast. At Allianz we know we have to fulfil these requirements  as well to deliver good customer experience.

Whatever we do at Allianz, it is starting out with the customers. We call this customer centricity.

– Claudia Oriovics said.

When we compare our performance this year to the past,  I can state that we have achieved quite a lot.  We have developed new online calculators and made them far more convenient and easier to use for the customers, we also have renewed and simplified our claim journeys. This all happened within a short period of time,  which was actually not possible some time ago. To give evidence to what I am saying – why I believe that Allianz is in a good position among insurers – we  were rewarded with the Digital Prosperity Badge from the Ministry of Technology and Innovation. This  gives us the confidence that we are on the right track.

Can we say that selling is not the main objective anymore, since how the customers feel – during the sales process – is equally important?

It is a long-lasting trend, and it is not only about selling anymore, maybe it worked in the past. Earlier companies developed products and services behind closed doors and customers used what was offered to them, but now we live in a completely different world. Now customers have all the possibility to compare everything on the internet and see what others are offering, they can easily choose among multiple players. Just selling products and handling claims in the insurance sector will definitely not be enough anymore.

I think we need to see our customers much more as long-term partner, and nurture the relationship.

– Claudia Oriovics points out.

Especially in insurance business, if you buy a policy, you still  hope to  never have a claim. We all hope, we do not need  to get in touch with the customer in this perspective. Of course, in the case something happens, we are here for them in the best possible way.  Yet, we are trying to deliver our values also differently. This year we launched the “Allianz Balance” webinar initiative. We had a series of webinars and presentations about mental health topics. We are happy to provide our customers with this opportunity, but also those people who aren’t our customers – yet. So, it is free for everyone,  because maybe some people would like to get to know Allianz better with regards to our values and not just be informed about the products we offer.  

What do you think, which new channel will be vital, which will emerge to provide good client experience at Allianz soon?

At Allianz we follow a multi-channel approach. We are all individuals, and everyone has a different kind of preferred way to interact. We focus on further strengthening the digital channels, however it will always be possible to speak to a real person at Allianz, because we believe that human touch is important. We also need to be aware of what types of new channels are coming up, because there are many kinds of possibilities, and we need to jump on those, if people prefer to use them in future. Though, there is  one channel which does not fit to our values and which we would like to reduce to the minimum. This  is sending physical, paper-based letters to the customers, because we want to avoid printing and sending them out. Sustainability, that is caring for the world we live in, is one of our key values that Allianz globally demonstrates.

A smile can improve many “difficult” situations, however in a digital client experience there is not much room for human interactions. Can we somehow substitute the “power of smile” through the digital customer journey?

What we can offer in the future instead of in-person meetings – where also facial expressions can be transmitted – is a video conference or a live stream. When people cannot meet in person, there is still an opportunity for online meetings, this is one way to transmit the smile. This is a direct way, I would say. There is, however, an indirect way to transmit a smile, and it is about which language we use in our communications to the customers. We can still work on that as well; we can implement a much nicer language in written forms than what we have now. Many other companies use a more conversational language. We all know the fancy apps and services that say: “Hi Claudia, how can I help you?” – we are not there yet, but intend to improve this in future to give this kind of personal touch through the language we use.

How did Covid impact the client experience at Allianz, has the pandemic perhaps improved it? Have the customers received more what they thought they can get in times like this?

Many customers – we saw this in multiple cases and studies – started using online channels during the pandemic, because they just had to use them anyway. By now, customers got used to them and are still using them continuously. Nevertheless, many still prefer the in-person contact, which is totally fine because we are social beings. Covid has accelerated the development of digital tools and the world itself. For example, it has raised our awareness about the importance of mental health.  if it hadn’t happened, we probably wouldn’t have started the Allianz Balance program this year In future, the combination of online and in-person service, –  we can call it hybrid service,  – will be the way to go.

How are you progressing  with the „Voice of the customer” initiative? It is a unique way how Allianz measures client experience – can you share any information that indicates the results so far?

We received more than 30 thousand feedback responses through this initiative so far. This initiative was launched in motor claims last year, since then, we have expanded it to cover several other customer journeys e.g., home claims,  or also  sales. When a contract terminates or is cancelled, we also ask for feedback. By the end of the year, we will have most of the customer journeys and channels covered . So, from implementation perspective we are  quite advanced. But it is not only about implementing it and sending the questionnaires. What is far more important is that we actively deal  with the replies. I am a huge fan of the VoC initiative and glad that our company introduced this concept. This direct customer feedback enables us to create great experiences with Allianz for them.

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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.

Generali, the Life-time partner

The plan is aligned with the Group’s stated ambition to be a life-time partner to its customers, offering innovative, personalized solutions thanks to its unmatched distribution network and to lead the European insurance market for individuals, professionals and SMEs, while building a focused, global asset management platform and pursuing opportunities in high potential markets.

€63 billion of premiums and 150,000 salesforce

Generali today is the market leader for insurance in Europe with €63 billion of premiums and is able to leverage on a powerful distribution network comprising more than 150,000 agents and salespeople across its major markets. Following a comprehensive and successful financial (2012- 2015) and operational (2016-2018) turnaround, Generali has delivered best-in-class technical and operational performance, achieving a P&C combined ratio of 92.8% and a Life new business margin of 39.2% in 2017. Generali also successfully launched a focused asset management strategy in 2017, with €487 billion in Assets Under Management. Generali is on track to achieve all its 2018 financial and industrial targets.

Generali 2021 strategy

The Generali 2021 strategy will continue the evolution of the business and is centered around four key differentiating convictions:

• European insurance markets will remain attractive. High private wealth accumulation will support the sale of Life and Asset Management products, while demographic trends and reduced public spending will drive the development of pension, health and welfare services.
• The Retail and SME markets are driving profitable growth. Retail customers will play a key role in future insurance markets, while the SME segment is a key opportunity in core markets like Italy and Germany.
• An integrated Insurance and Asset Management offer is key for customers worldwide. Customers are seeking integrated Life and Asset Management products to protect and grow their assets, while macro and demographic shifts are increasing demand for innovative P&C and Health solutions. This integration reflects the shift in focus from ‘products’ to ‘customers’ and from “protection and indemnity” to “prevention and servicing.”
• Physical distribution is empowered and not replaced by digital platforms. Physical distribution networks will remain a competitive advantage in the industry as they are increasingly enabled by digital tools, which will allow for the delivery of higher customer satisfaction, productivity and efficiencies.

Today, Generali unveils an ambitious strategy – Generali 2021 – which will accelerate the Group’s growth and deliver superior returns to our shareholders. Our primary ambition is to become a life-time partner to our customers, offering innovative and personalized solutions thanks to an unmatched distribution network.

– said Philippe Donnet, Generali Group CEO.

Leadership consolidation and digital transformation

This clear and distinctive strategic vision leverages on our strengths to consolidate leadership in Europe on retail and SME customers, expand operations in high-potential markets and develop a global asset management platform. At the same time, Generali will continue to focus on generating and managing capital to fund growth opportunities in key markets and drive innovation and digital transformation wherever we operate. Thanks to this set of actions, Generali will achieve between 6 and 8 per cent Earnings per Share average annual growth over the plan horizon.

We look forward to implementing this new strategic plan, knowing that our track record of delivery, driven by our talented colleagues and underpinned by our strong brand and long-term culture of sustainability, will ensure its success.

– Philippe Donnet added.

Increased core profitability and greater efficiency 

As part of Generali 2021, the Group is committed to delivering growing Earnings per Share, with a target CAGR of 6% to 8% for the period 2018-21. There will be a number of contributors to this target including increased core profitability from Generali’s insurance and asset management businesses, greater efficiency with an additional expense reduction target of €200 million in mature markets by 2021, active management of interest expenses and redeployment of capital to support profitable growth initiatives.

Generali is also committed to delivering higher shareholder returns through a growing and sustainable dividend underpinned by a target pay-out ratio range of 55% to 65% over the plan period. Coherent with the official disclosure at YE 2017 of 4.01% of NBV over PVNBP 3 period. Attractive profitability will be delivered through a target average Return on Equity of more than 11.5%.

Key enablers

Generali 2021 will be supported by three key enablers which will drive the execution of the plan:

• Empower people for the future. Generali will continue to foster a customer-centric and innovative culture, nurturing global and diverse leaders and talents. Operating as an agile and adaptive organization with 100% smart working, Generali will help staff acquire new digital skills (50% target by 2021) while rewarding excellence and sustainable value creation.
• New Brand promise. Generali will ensure a consistent and distinctive brand experience built around the promise of becoming a life-time partner for its customers. Generali is targeting the best relationship Net Promoter Score among the European International players.
• Continued commitment to sustainability. Generali 2021 is aligned with the Group’s sustainability commitments. Generali also commits to grow green and social retail products by 7%-9%11 and to allocate €4.5 billion to green and sustainable investments by 2021. Key initiatives with strong sustainability footprints include a Responsible Consumer scheme and the Enterprize awards for sustainable SMEs.

Generali 2021 – Strategic Priorities & Targets

• Profitable Growth: Strengthen leadership in Europe: Reinforce #1 market position. Focus on high potential insurance markets: 15%-25% Earnings CAGR 2018-21. Develop global asset management platform: 15%-20% Earnings CAGR 2018-21.
• Capital Management and Financial Optimization: Increase capital generation: > €10.5 billion cumulative capital generation 2019-21. Enhance cash remittance: +35% cumulative cash remitted to holding 2019-21. Reduce Debt level and cost €1.5-2.0 billion debt reduction by 2021; €70-140 million reduction in annual gross interest expense by 2017.
• Innovation and Digital Transformation: Become life-time partner to customers. Enable digital transformation of distribution. Transform and digitalize operations modell.

The TOP 200 Generali agents gathered in Sorrento

The Global Agent Excellence Contest was launched in 2016 to celebrate the most innovative agents in terms of digital adoption, data collection and new approaches to market.

• This is the second edition of the contest and this year involved 100,000 agents in 20 markets and 22 business units across Europe, Asia and Latin America, who engaged in local competitions between September 2017 and March 2018, followed by a Champions League format to select the 10 finalists.
• The Champions League panel consisted of 5 Generali Group Management Committee members (Marco Sesana, Jean-Laurent Granier, Giovanni Liverani, Luciano Cirinà and Frédéric de Courtois).

The Grand Finale was attended by the global top 200 agents, the Generali Group CEO, Philippe Donnet, and Heads of Sales from 20 markets. All 260 guests voted on Generali’s best agent.

Generali Group Ceo, Philippe Donnet, stated:

„Our network of more than 150 thousand dedicated agents and salespeople around the world is what makes Generali unique. It is a distribution model that ensures a closer relationship with clients based on trust, expertise and understanding. Innovation plays a central role in our strategy to ensure our agents are equipped with the best tools to compete in the modern world. Thanks to the combination of our competent, talented and passionate agents and these new tools, we are able to provide clients with advanced and tailored solutions to meet their daily needs at a time and with the means convenient to them.”

The two gamechangers: connectivity and digitalization

The insurance industry is undergoing a profound transformation driven by connectivity and digitalization. Traditional distribution plays an increasingly important role as it evolves into a new model whereby technology enables more efficient processes, solutions that are more tailored to clients and more satisfactory relationships between agents and customers.

Generali Group is committed to fostering this transformation, relying on experienced agents who excel in building trust and providing unparalleled service.