Allianz: hiring local underwriting expertise

In an interview with COVER, Delphine Maidou, CEO of Allianz Global Corporate and Specialty South Africa, encapsulated Allianz’s approach to growing the company’s business in Africa.

This was ahead of the International Insurance Conference Southern Africa at Sun City, where Clement Booth, Member of the Management Board of Allianz SE and Chairman of Allianz UK, was a special guest speaker. He will be joined by Andreas Berger, Regional CEO of AGCS’s London branch, and Delphine Maidou herself at the Conference. COVER offers our readers some insight into AGCS in this interview.

As a well-known brand, how does Allianz plan to grow its reach in South Africa?

We are focusing on key lines of business. Up to September last year, Property comprised 40% of our portfolio, and the rest of our business was largely servicing international companies coming to South Africa; however, our focus has changed to grow our current lines, but also other lines of business more quickly, with African domiciled clients rather than those from overseas. We are especially concentrating on expanding our marine and engineering portfolios.

With these goals in mind, Allianz has hired local underwriters who understand both the market and Allianz, expanding our complement from 19 to 36 in the last six months. Internally, we have given our teams, including our operations teams, the freedom to hunt for and grow the business, allowing our underwriters to focus on growing the business.

We have had tremendous broker support here in South Africa and have also started cultivating our relationships with reinsurers both globally and regionally.

In essence, we have a two-phased approach: South Africa is still the largest and strongest economy in Africa, and we do 30-40% of our business here. At the same time, though, we are looking at the many opportunities in the rest of Africa, particularly construction projects and property.

“Our mandate for Allianz is a South African platform for Sub-Saharan Africa – we will build our base here to grow our South African business first, then on the continent overall”

Do you have plans to reach into Southern Africa? If so, how far have these progressed?

We most certainly have definite plans for Southern Africa. We have developed a relationship with SADAC Institute creating an organization around insurance where I will present on mining in July. This is one of the ways in which we have been associating ourselves with insurance companies in A to provide them with capacity when needed.

How does this fit in with Allianz’s global strategy?

Perfectly, especially in the global corporate business. Allianz has grown and established itself in mature markets, like Germany, UK, France and the US. As these markets are getting to saturation now and we are quite strong in there, we now need to look to emerging markets for growth: Africa is one as well as Latin America, the Nordic Region and Asia Pacific. This is where we see growth in next few years.

Please tell us more about your general distribution strategy.

It is not complicated. Locally we are a licensed insurer so we will continue to grow and write business through brokers in South Africa. Outside South Africa we will however be working closer with reinsurers and other insurance companies, where they need capacity. We will use them as fronting partners in those countries where they already are. Otherwise we will identify partners in each country and then narrow to one or two going forward. We already have the largest footprint of all companies in Africa – at least 14 countries.

Where do you see the opportunities in the local market and how are you engaging brokers to capitalise on those opportunities?

We don’t have a large market share in SA. However, as a global company, we have the strength of the brand and especially financial consistency. In January, when we decided to reintroduce ourselves to the market, Clem Booth, member of the Allianz Board came to South Africa and made himself available to us. That was a great advantage. We had just hired the team and it was time for us to go to the market, informing them of our product lines, introducing them to our people and sharing our strategy. We had this road show in the third week of January, with Clem Booth. Had most of the major global brokers in SA and others supportive of us. Most wanted to know what we could offer them.

We had good wins for April, June and July is looking good with lots of support from the broker community. Another helpful thing, as a global company, is that we use best practices from across the world. That is the support we bring to the market here. At the moment we don’t sell ourselves strongly enough on our global programme. While we only have two or three programmes here, we have the expertise locally so we can manage global programmes from SA now. We need to be seen as an African insurer and therefore hired locally so we can make decisions here with staff that understands the market. On the other hand we work closely with the global team to ensure they understand how Africa works. We have had lots of support from the UK team, which we reported to until 1 May. Depending on the client, Allianz is happy to place the business where it needs to be. The account is placed in Africa if the client is in Africa because we want the premium to stay in emerging markets. This is important for us as we have had support from SA clients up to now and believe the same capacity is in SA. So let’s create jobs in Africa. We can hire locals and can grow a local book of business while also growing the economy. We always as what the client wants? The CEOs of Allianz is supportive of this.

Are you focusing on any specific product lines or business segments?

Corporate property, engineering and construction are the largest growth areas. Energy is very competitive and, as a cautious underwriter wanting sustainable growth, we are still going through our own analysis to stay within our risk appetite and within our global skills. Then there are also liability, financial lines, professional indemnity and D&O.

How are you finding the change in doing business in South Africa?

With global expertise we can quickly compare terms applicable in other countries and for different risks. We still had a foot in this market as we have always been present in some form or another, so no big surprises. We cannot use our strength globally to win business here. We have to win it in our own rights, having to understand market and changing to fit Africa. Thankfully, we had done a lot of work e.g. liability is not easy to write but we have made plans on how to write it. Property rates are difficult, so we are working at what we will offer the client that is not just price. It is a learning curve both locally and globally.

On the personal front, how have you settled in South Africa?

It has been a coming home for me. I have been away from Africa for 20 years, with my whole insurance career outside Africa, when asked to take on this role. It is a great opportunity to bring what I have learned in 20 years abroad, while also growing from learning about what is here. My team’s input here is key – we guide each other. I understand Allianz better than they do, and they understand the local environment better.