Transcript The way ahead - International Insurance Society

Growth Agenda for the
Insurance Industry
Dr. Volker Deville, Allianz SE
International Insurance Society
Berlin, July 10, 2007
Trends
Growth Strategies
© Allianz SE, Group Development, July 2007 - IIS – Growth Agenda for the Insurance Industry
Agenda
2
Trends drive of our industry
Snapshots on selected trends
German Health Reforms US Pension
Reforms
Medium
Energy
1 year
Wealth
Decumulation
EU
Regulatory
Harmonization
US Litigation
Banking System
Middle East
Instability
Nuclear
Proliferation
Bioeconomy
Nanotechnology
Demography
Pervasive
Computing
Urbanization
EU Pension Reforms
Social Security Depletion of
Build Up Natural Resources
Private Public Partnerships Vulnerability
New Sales
Alternative Engines
Consumer
Channels Middle East
Water Scarcity
Protection
Financial Markets
Housing
Japan
China Genetic
Markets
Financial
Instability Testing
North Korea
Sector
Collapse
Medical
China overtakes US
Moral
Indian
Treatment
Customer
Liability
Brain Drain
Abroad
Sophistication
2-4 years
5-10 years
11-20 years
Time Horizon
3
© Allianz SE, Group Development, July 2007 - IIS – Growth Agenda for the Insurance Industry
Terrorism
Threat
Flu
Islamic
Opportunity
Migration
Pandemic
Extremism
Both Threat and Opportunity
Climate
Transnational
Change
Compliance
Threat
Potential Impact
High
Very High
Legend
Three examples of mega trends
© Allianz SE, Group Development, July 2007 - IIS – Growth Agenda for the Insurance Industry
Threat
Opportunity
1
Climate Change
High
Both Threat
and Opportunity
Demography
3
2
Digitalized Globe
Medium
Potential Impact
Very High
Legend
1 year
2-4 years
5-10 years
11-20 years
Time Horizon
4
Climate change:
Impact on risk profile and investments
Temperature
increase (°C)

Strong evidence regarding human
influence in global warming drives
awareness

Government incentives for non-polluting
technologies (hybrid engines, biofuels)
 Investment opportunities in alternative
technologies, e.g. proportion of hybridbased vehicles to increase from 0.9 to
2.8% until 2017
 Changes in perceived risk profile, e.g.
damages by natural catastrophes
become more difficult to calculate
Sources: OECD Paris, BBC, December 2006, Winterberichte SLF United Nations
5
© Allianz SE, Group Development, July 2007 - IIS – Growth Agenda for the Insurance Industry
Prognosis on global warming
Demography:
Fundamental changes in “need structure” ahead
(billion)
(in %)
10,0
100
9,0
90
8,0
80
7,0
70
6,0
60
5,0
50
4,0
40
3,0
30
2,0
20
1,0
10
0,0
 The world population will increase
from 6.6 billion people today to 9.2
billion in 2050
 In 2050, more than 400 million
people will be aged 80 and above
Longevity risk increases
Reform of social systems triggers
regulatory amendments worldwide
Continuously growing demand for old
age care and health care
0
1950
1970
1990
2010
2030
0 - 14
15 - 64
65 - 79
80+
Old age dependency ratio
Dependency ratio
2050
Sources: UN Department of Economic and Social Affairs, Allianz SE
6
© Allianz SE, Group Development, July 2007 - IIS – Growth Agenda for the Insurance Industry
Development of world population

Decreasing equipment cost (e.g. 50 € computer)

Proportion of internet users will increase from 21
to 39% until 2017 worldwide

Proportion of broadband subscribers in world
population will increase from 7 to 17% until 2017
 Increased demand for online information about
retail financial products (consumer lending,
savings and investments)
 Increase disintermediation of distributors with
customers acquiring similar services online
 Easier access to customer segments in
emerging countries through direct channels
7
© Allianz SE, Group Development, July 2007 - IIS – Growth Agenda for the Insurance Industry
Digitalized Globe:
Virtual technology drives markets
Mega trends drive the future in different regions
Latin Mature
S.East Arab./
China India
Amer. Asia
Asia Africa
© Allianz SE, Group Development, July 2007 - IIS – Growth Agenda for the Insurance Industry
Old
New
US/
Europe Europe Can.
Climate
Change
Demography
Digitalized
Globe
Legend
Relevant impact
Strong impact
Exceptional impact
Other mega trends:
Increased customer empowerment; tighter requirements for treating customers fairly;
health care infrastructure; rise of emerging countries; unpredicted shocks
8
Trends
Growth Strategies
© Allianz SE, Group Development, July 2007 - IIS – Growth Agenda for the Insurance Industry
Agenda
9
Growth could be realized in many dimensions.
: Allianz Focus
Forward integration
Backward
integration
Utilizing core competencies
at the markets
Global
Globalexpansion
expansion
Internet
Direct
New business segments
New distribution channels
Indirect
New customer
segments
Splitting of current
segments
New
products
Product
development
Customer Focus
Real innovation
Segments not yet
Cross selling
explored
New
segments
New
market
New
market
needs:
needs 55+
New parts
of the
value chain
New
geographical
markets
New
generation
of products
New business
business
New
models
model:
TOM
Product related
Product-related
services
services: Assistance
Product amendments
Sources : Allianz SE, according to “Wege zu nachhaltig profitablem Wachstum”, J.F. Seidenstricker, Bain, Swiss Journal of Business Research and Practice, 4/2005
10
© Allianz SE, Group Development, July 2007 - IIS – Growth Agenda for the Insurance Industry
Individual
countries/ regions
Growth segments for financial services providers
Absolute global premiums/revenues by line of business
100%
© Allianz SE, Group Development, July 2007 - IIS – Growth Agenda for the Insurance Industry
Banking
1,060 bn €
80%
Asset
Management
216 bn €
Life & Health
Insurance
1,699 bn €
60%
40%
20%
Property &
Casualty Insur.
491 bn €
CAGR ≥ 7.5%
CAGR 5.0–7.5%
CAGR < 5.0%
Source: Allianz SE
0%
Americas
1,463 bn €
Europe
943 bn €
Asia-Pacific
1,060 bn €
11
Impact on business model:
Reach customers via multiple distribution channels
Distribution
channel
Insurance
1
Insurance
&
Asset
Management
Insurance products,
investment funds
Banking
© Allianz SE, Group Development, July 2007 - IIS – Growth Agenda for the Insurance Industry
Distribution
channel
Bank
Bankassurance
2
3
3
Assurbanking
Banking products
Components of insurance, old age provision, asset management
are to be increasingly combined
12
Product innovation: Allianz Schutzbrief55Plus
Product
Health
Schutzbrief
55Plus
Market
Management
+
for assistance
and care at
home
Cash
benefits
© Allianz SE, Group Development, July 2007 - IIS – Growth Agenda for the Insurance Industry
Remaining
independent
Assistance
services
Care
Not being a
burden to the
family
P/C
Health
Living actively
at home in
retirement
Accident
Customer needs
Accident
Nursing care
Support in
critical
situations
Death
Health
Death benefit
Life
13
Allianz strategy at a glance:
Sustainable profitable growth
Our Vision
© Allianz SE, Group Development, July 2007 - IIS – Growth Agenda for the Insurance Industry
Be one of the top 10 global
financial services providers.
Market
capitalization
> GDP
growth
Future
growth
> Cost of
capital
Our Mission
Future
profitability
A customer-centric organization.
Trusted to deliver in moments of
truth.
Our Business
Current
growth
Pipeline
of initiatives
Current
profitability
Providing solutions for customers
around insurance, banking and
asset management focusing on
Europe, USA and selected Asian
markets.
14
The Allianz pipeline of initiatives
July 2007
© Allianz SE, Group Development, July 2007 - IIS – Growth Agenda for the Insurance Industry
Restructuring
Sustainability
.
.
New growth
markets
Culture
Customer
Focus
15
Thank you
for your attention.