Allianz Global Corporate & Specialty (AGCS), the industrial insurer of Allianz Group, is embarking on a restructuring program it says is designed “to regain profitability and market leadership in the corporate and specialty insurance segment.”

Dubbed “New AGCS,” the restructuring program is supported by a number of new leadership appointments, including Joachim Mueller, who became AGCS CEO in December 2019. In addition, the company aims to strengthen its technical capabilities across its core underwriting and claims functions, streamline its organization and processes, enhance its current distribution and sales function and invest in digitalization to further evolve its core business and customer offering.

Regional Organization Simplified

AGCS plans this year to simplify its regional organization by reducing the number of regional units from seven to six, moving from a country-centric structure to a more global setup with regional delivery. AGCS said this reflects the structure of many clients and global broking partners.

The current regions North America, Asia Pacific, Central & Eastern Europe, Regional Unit London (including Nordics) will remain unchanged. The future Mediterranean & Africa region will consist of France, Benelux, Italy and Africa (which now brings the whole of Africa under one AGCS unit). Spain/Portugal and South America will be merged into one new “Ibero/LatAm” regional unit, reflecting market links between across these countries. There only will be two chief regions & market officers on the AGCS Board of Management: Bill Scaldaferri for North America and Henning Haagen for all other remaining AGCS regions and markets globally.

In each of these six AGCS regional units, leadership will be consolidated under one regional managing director. Underwriting, claims and other market-facing teams will be managed across regions under single empowered regional heads who will steer each function across all countries per region and report to the regional managing director. As a result, each region is managed as a whole to deliver an integrated approach, supported by and aligned with AGCS’ global model and structure.

The regional leadership will change for some regions: Subject to regulatory approval, Nuno Antunes will join AGCS from AIG to lead the Ibero/LatAm region and Alfredo Alonso, moving to AGCS from Argo Global, will be responsible for the Regional Unit London. Corinne Cipière, currently country CEO for France, will be the new regional managing director for the Mediterranean & Africa region. The regional leadership for Asia Pacific (Mark Mitchell), Central & Eastern Europe (Hans-Joerg Mauthe) and North America (Bill Scaldaferri) will remain unchanged. While Europe and North America will remain key strategic markets, AGCS plans to selectively develop its business in other regions, notably in Asia

Focus on Large Corporates, Mid-Sized Firms

Under its new strategy and business model, AGCS will continue to focus on specialist property & casualty insurance products and services, targeting complex risks for large multinational corporates or companies seeking expert solutions, such as specialty segments in aviation, marine or entertainment.

“This should be our core stronghold and key differentiator. Here we win on deep risk expertise, outstanding claims management, and a strong relationship model that creates value and solutions for customers, bringing together all of AGCS and also Allianz Group worldwide,” Mueller said.

AGCS will also continue to serve mid-size companies in the United States in particular through its MidCorp Line of Business which generated €965 million in gross net written premium in 2019.

“With dedicated turnaround measures and selected segment exits such as agribusiness in the U.S. or MidCorp in Canada, we have repositioned our portfolio and achieved real progress in this part of our business. We will now focus on securing the benefits of the profitability and expense improvements in the current hardening market environment”, Mueller continued.

Technical Investments

AGCS said it will significantly invest in expanding technical capabilities and skills in its core insurance business to ensure long-term sustainable underwriting performance. This includes strengthening capabilities and tools in pricing, portfolio management, loss trend analysis, volatility management and actuarial modelling, with over 30 new additional roles identified. A comprehensive range of measures goes far beyond underwriting to include other key functions such as claims.

“We have already significantly reduced our exposures in our portfolio and will continue to apply corrective actions and adjustments where needed. Underwriting is the engine of profitability and we must truly regain our position as a technical underwriting company leveraging our talents as well as new technology and analytic tools,” Mueller said.

New Functions

Under its new structure, AGCS said it will provide brokers and clients improved service delivery and strengthen its business development approach by establishing a dedicated Global Sales and Distribution function, consisting of around 35 employees.

This new team will be led by Patrick Thiels, who is currently AGCS’ regional CEO for the Mediterranean region. A number of specialist industry teams under “Industry Solution Directors” will serve customers in targeted industry segments by bringing together solutions from all AGCS lines of business for industry-specific exposures, starting with Financial Institutions, Telecoms & IT, Construction, and Aviation & Aerospace before expanding this approach to other sectors. To oversee AGCS’ global insurance program offering for multinational companies and further expand digital customer services in this area, Nigel Leppitt has been appointed global head of Multinational. Previously he was AGCS’ chief transformation officer.

Other new functions will drive AGCS’ global model and reduce cost and complexity for both the company and its customers. These are:

• Global Product Management, led by Guy Money, who joins from AXA Group. He will be responsible for product harmonization and simplification globally, based on one core global product range.
• Global Process Management will be responsible for end-to-end process improvement to drive efficiency and customer service delivery through one globally coordinated approach. This new function will be led by Erika Cubova who moves from her current role as global head of Claims Portfolio Intelligence & Coordination into this position.

Digitalization a Strategic Priority

Digitalization is another cornerstone of the AGCS strategy. “Expanding the use of data analytics and digital technologies for both our core business and for our customers will be crucial to deliver the new AGCS ambition,” explained Mueller.

Priorities will be to move to one global scalable systems architecture and establish a new customer-facing portal to pull together all customer services in underwriting, claims and risk consulting.

“We will now focus our entire business under a new strategic direction. We will put technical excellence in underwriting before growth, simplify and strengthen our global model to ensure that we think and act as one team, and become more efficient, leaner and faster – benefiting us and our clients,” added Mueller.

“Our joint ambition is set high: The ‘New AGCS’ will be the market leader in our target segments. We expect to see significant profitability improvements of our underwriting results from 2021 onwards and aim to achieve the full turnaround and transformation of our company by 2024.”

Source: Allianz Global Corporate & Specialty (AGCS)

*A version of this story ran previously in our sister publication Insurance Journal.