Allianz optimistic about growth prospects in Sri Lankan insurance market

Manuel Bauer, a Member of the Board of Management of Allianz SE, and Kamesh Goyal Regional CEO of Allianz for Asia-Pacific, were in Sri Lanka recently, on a market visit. Manuel Bauer was appointed to the Board of Allianz SE in January this year, being responsible for Insurance Growth Markets. He is an industrial engineer by profession and commenced his relationship with Allianz two decades earlier, joining the Engineering Department of Allianz Versicherungs-AG, at the company’s head quarter in Munich.

He has experience in both Middle Eastern as well as Asian markets, as he functioned as Branch Manager of the Allianz operations in the Middle East, and also as CEO of Allianz Life in Korea. He was Head of the Global Life Unit of Allianz SE and as of last year, also appointed Head of the Allianz SE’s Central Eastern Europe, Middle East and North Africa (CEEMA) Unit.  In an interview Bauer speaks about the business strategy that saw the Allianz Group through the financial crisis, and the insurance potential in

Sri Lanka.

Q. The past few years experienced an economic recession, from which companies are recovering only now. Despite this, Allianz claims to have maintained a strong performance. How has the company managed this?

A: “My personal belief is that Allianz is one of the few companies in the industry that has done a lot of right things at the right time - from a very early stage on. We have applied effective risk management, perhaps earlier than others. And Allianz has been constantly focusing on its core business which is General Insurance, Life insurance and Asset Management.  

Allianz managed its risks well and emerged highly profitable and financially stronger from the financial crisis years 2008 and 2009. This is the foundation for the resilience and stability our customers, investors and employees expect from us.

We have seen that insurance companies came out of the financial crisis in much better shape than, for example, the banks. Insurance companies worldwide weathered the crisis much better than banks.

Q. Allianz focuses on delivering customer experiences that exceed expectations. How do you adapt your strategy in what has been described as a highly competitive soft market in Sri Lanka?

A: In retail business we try to adopt exclusively local strategies which means we try to understand who our customers are, what products they need and how Allianz can attract them. Products that we offer in Sri Lanka might not be sold in India or other countries or might be sold through different channels.

We adapt to each market and we focus on the segments in which we think we can give the customer the best possible protection.

We have a special tool in market management that is introduced across the Group.

It determines, through interaction with our customers and potential customers, what we want to do, what we can do and how customers want to buy insurance in a given market.

Insurance needs and insurance buying is changing as we speak. So we try to understand how and where our customers want to buy our products. We are very decentralised and local in each country, of which Sri Lanka is no exception. Still, we can make customers benefit from the worldwide knowledge of the group. This is one of the unique advantages we have.

Over the past years we have made all our companies sensitive to customer service. We introduced a system for monitoring and measuring customer service. And once you start measuring this, you obviously start looking at improvements.

We ask several thousands of customers every year what they think about our services. All improvements are thus based on our customers’ feedback. The Allianz culture is that of a company that will live to deliver on its promise, at all times.

In the end, it is not important what we think we have achieved, but only what the customer tells us that he has experienced.

Q. What is your outlook for 2011 and what specific opportunities do you see – in Asia, and more specifically, in Sri Lanka?

A: Asia is definitely a region of strategic importance to Allianz. Research tells us that four out of seven top global growth markets (namely China, India, South Korea and Japan) are found in the Asia Pacific. Especially South Eastern countries like Thailand, Indonesia.

Malaysia, Sri Lanka and India show promising growth and stimulus, not only in insurance but in general. Among the North East Asian countries, we see China to be in a very important role that which could be extended.

Asian economies are doing well, but we must keep in mind that Asia is also getting very competitive, not only with the presence of big local insurance companies but also with the increasing presence of large multinationals.

In Sri Lanka, we are hopeful that the economy will be doing much better, going forward. Per capita income level is increasing to between $ 1000 and $ 1500 annually.

We should start seeing a sharp increase in the penetration of insurance, especially in Life insurance. We are very optimistic about the Sri Lankan insurance market.

In Sri Lanka we began operations six years ago, so we are relatively young and are gaining a foothold in the retail market and establishing our presence.

The achievement so far is amazing. Having said that, we should not forget that the company here is still in its early years and we will need to focus on growth going forward in the coming years, with the expansion of the branch network, we will be looking at growing more in the small and medium business segments.

We will ensure that growth takes place where we can ensure sustainability and profitability. In Sri Lanka, as in any other market, we need to find those portions of the business that can generate value for the customer as well as for the Group.

Q. What does Allianz SE feel it can offer to a relatively mature market like Sri Lanka?

A: We, as a worldwide operating insurance company, can take strength from the fact that we have the expertise to operate in over 70 markets in the world, with 150,000 employees. We can really focus on synergies from other markets, particularly along product development.

When developing products for the Sri Lankan market, for example, we can use our worldwide experience to avoid making the same mistakes than competitors.

Another field of synergies is the risk management that might be changing while the company is growing and will need progressively more expertise. This is where a group like Allianz has a big competitive advantage over smaller local competitors.

Q. What, if any, are the concerns that Allianz has when pursuing a long term business presence in Sri Lanka?

A: Our concerns in any country are always about good and stable market conditions, which is the basis for our business and for investing in any country. Sri Lanka is a big market and a very good place to do business.