Generali Deutschland has launched the next phase of its program to reorganize in Germany, which is one of Generali’s core markets.
The program is designed to strengthen and streamline operations, while building the Generali Deutschland brand, said the company in a statement.
The first phase of the program was announced in May 2015, when Generali said its German business would institute a simpler and business-focused governance, a stronger focus on distribution strengths, a modern and leaner operating platform and a new business model in life insurance to ensure long-term profitability.
One of the key parts of the latest phase of restructuring program is an extension of an existing distribution joint venture with DVAG, a network in Germany of financial advisers and insurance agents, with approximately 6 million customers and 30,000 advisers. As a result of the new agreement, Generali said it will benefit from exclusive distribution through DVAG, thereby strengthening its core brand.
Generali is a key shareholder of DVAG with a 40 percent share of the joint venture, the company said. Subject to regulatory approvals, DVAG will absorb, beginning in mid-2018, the agents’ network of Generali Versicherungen (EVG), which consists of approximately 2,800 agents.
Today, DVAG generates around 50 percent of Generali’s new business in Germany and contributes to “its leading market position” in profitable products such as unit linked products in life insurance as well as its strong underwriting performance in P/C business, Generali said.
Simpler & Innovative Product Offering
The Generali’s restructuring program in Germany is following the company’s “One Company” approach, which is simplifying products for all distribution channels by concentrating 10 product factories in Germany into one product development engine across all entities for all brands.
The new platform will consolidate all technical and product capabilities for each of the three segments: P/C, health and life, the company said, explaining that this aims to “deliver a simpler and innovative product offering that can be tailored to the various distribution channels and brands.”
Expansion in Direct Digital Business
Another part of the German restructuring program is a commitment to additional investment in the company’s digital and direct insurer CosmosDirekt, which Generali said is already the market leader in the protection business and plans to increase its presence in P/C, health and legal protection.
Generali said CosmosDirekt is investing in new full mobile access for customers, specifically to target millennials.
Run-Off of Generali Leben
And last but not least, Generali said it is putting Generali Leben into run-off as of Q1 2018. This move is designed to increase Generali Group’s economic solvency by 1.7 percentage points, thus freeing up resources to support growth in the German market.
“This step will grant high security for all existing life contracts and substantially mitigate Generali’s exposure to interest rate risk,” the company said, explaining that this move does not exclude a potential future disposal of the Generali Leben portfolio.
In comments on Generali Deutschland’s restructuring, Generali Group CEO Philippe Donnet, said: This program will accelerate Generali’s transformation in Germany, which is one of the group’s core markets. “These actions will simplify processes, consolidate our distribution network, increase our product range and strengthen the Generali brand.”
“This next phase will accelerate our growth story, increase profitability, reduce capital absorption and strengthen our competitive position,” said Giovanni Liverani, CEO of Generali Deutschland.
“The adoption of the ‘One Company’ approach will reduce complexity, improve go-to market capability and reinforce our leading role in product innovation and smart insurance,” he added.
By extending Generali’s long-term partnership with the DVAG sales network and enhancing CosmoDirekt’s leadership in digital sales, Generali will reinforce “our strong competitive advantage in distribution,” Liverani went on to say.
Source: Generali
*This story appeared previously in our sister publication Insurance Journal.