Allianz underlines potential opportunities and disruptions for insurance sector

In a recent fireside chat, Quantexa CEO Vishal Marria spoke with Allianz Technology CFO Andrea Pettinelli to discuss where Allianz sees growth opportunities in the insurance space alongside potential disruptions caused by big market players entering the sector.

Allianz specialises in two core areas – insurance and asset management. As the IT provider of the Allianz Group, Allianz Technology is tasked with optimizing, transforming and innovating the wider companies’ infrastructure, applications and services alongside Allianz operating entities to develop the best customer experience.

When Marria quizzed Pettinelli on where he thought the changes were going to come in the insurance market, auto insurance was singled out as a space ripe for innovation.

He said, “There is going to be a lot of investment in auto insurance transformation. Car insurance is not sexy – precisely for the reason that they are legacy systems and we are now at the end of the cycle for many of these software’s – and the need is there to understand what to do with your car insurance platform, how to transform it.”

Alongside transforming the software of auto insurance systems, Pettinelli also saw significant importance in aggregating the data related to it.

He remarked, “Moving then to the dimension of the data, there is still going to be a lot of investment in the capability of aggregating and analysing data coming from different sources. So, the combination between structured and unstructured data and the combination of operational data with financial data, these are traditionally two different silos that live in any single company and never meet.

He added that this is generating issues in being able to consistently leverage this data across organisations.

Investment areas

Pettinelli made reference to four key areas where he saw more investment going into in the next two to four years that he believed would influence and disrupt the industry.

These included process intelligence – starting from the base technologies of robotics to more ‘evolutive’ technologies like chatbots and voice bots, all the way up to AI. He also referenced the growth of identity devices due to the Covid-19 pandemic.

Pettinelli offered two hypotheses about how these technologies could disrupt the industry. The first is that the insurance distribution landscape may change in the way that technology firms like Google or Amazon will somehow become interested in distributing insurance but not introduce insurance products – so they become interested in distribution but not in the production of insurance.

He said, “In this scenario, we are into a landscape of the market more similar to the where the asset managers are today – huge factories that are then distributing through different networks.

“If this is the game, obviously the game becomes a game of scale. The bigger you are, the easier it is for you to bring your monetary costs down and be attractive for the distributors and then offer them a better deal in distribution.”

Pettinelli then highlighted the other scenario, where players like Google and Amazon also become interested in the production of insurance.

He commented, “If this happens, then the discussion becomes completely different and much more threatening. The first scenario is the one we experience today, and as we are almost bigger than everyone else in the space we could probably thrive in that scenario.

“If these players become interested in the other end of production, then it’s a different topic, and becomes much more challenging for us from a competitive standpoint. It is difficult to foresee right now, but we are increasingly trying to be prepared for all scenarios.”

Harmonisation is key

Marria also asked Pettinelli what he saw as one of the key challenges around adopting new technology within such a complex and large organisation as Allianz. To Pettinelli, he saw the chief challenge as making sure harmonisation – especially in the area of investment – is achieved across the company.

He said, “The main challenge is to make sure that the investment that is happening centrally and is then actually becoming fruitful locally. We need to make sure that what we are developing is then suitable for filling the needs of local entities – this is not so easy, because we are operating in different countries.

“Therefore, the main challenge here is to be able to create investments that are really then generating business benefits and are adopted by the operating entities. If every single operating entity in a single country has got its own set of products and processes, then it is complicated to create solutions that are supporting all of them.

“The model of the Allianz group is to create an operating model that is harmonised across different geographies, a common set of products and processes where the processes are determined by the products – and then all of these are supported by a common internet-of-things platform.

“If this design is effective, then the specificities of the local entities are reduced and the adoption of our innovative technologies is faster. If this doesn’t happen, everything is more complicated.”

You can watch the fireside chat here.

Copyright © 2021 FinTech Global

Enjoying the stories?

Subscribe to our daily FinTech newsletter and get the latest industry news & research


The following investor(s) were tagged in this article.