It's all about finding the right balance - aiming for 50 percent growth

Fabiana Castiñeira, CEO of Allianz Argentina, talks about 25 years of Allianz in Argentina, the importance of agent-company relationships and why balanced business is so important for sustainable and profitable growth.

 

25 years of Allianz in Argentina. How has the company's business in Argentina developed over the past quarter of a century?

 

Fabiana Castiñeira: The process involved in establishing the company came hand-in-hand with a number of mergers and acquisitions of and with local companies, such as Colón, Plus Ultra, Compañía Aseguradora Argentina or AGF's Argentinean business. Everything has been bundled under the Allianz name since 2007. In the space of only a few years, we have established ourselves as one of the major players on the Argentine insurance market. And, most importantly, we have a stable solvency position and provide our customers with high-quality products and services.

 

 

Which objectives are you pursuing at the moment?

 

We are aiming to continue to grow in a sustainable and profitable manner. Over the past eight years, we have been doubling our business volume every three years. In 2012, my first year in charge of the company, we worked hard to further accelerate that growth rate. And we were successful. 2012 saw us achieve growth to the tune of a good 40 percent, the highest rate achieved in the last eight years. We’re growing significantly above the rate of inflation and we want to continue to outpace the market in terms of growth in the future, too. I expect to see growth of almost 50 percent in 2013.

 

 

What were the highlights of last year?

 

In May 2012, we were granted the ISO 9001:2008 certification for insurance sales, underwriting, policy issuance, dispatch, administration and incident management. We have also strengthened our sales structure and launched new, innovative products on the market, such as insurance for handbag theft. We have also been further developing our existing business units, such as guarantee or agricultural insurance.

 

 

Allianz attaches a great deal of importance to supporting its agents. In terms of technology, Allianz has always played a pioneering role in this area. How much progress has Allianz Argentina made in this respect?

 

With Allianznet, we have a tool that provides us with a solid risk management structure, particularly for large-scale risks. We followed the example set by Allianz Spain and adapted its system to reflect specific Argentinean demands. We involved agents and brokers in the specification process from the outset. 

Fabiana Castiñeira, CEO Allianz Argentina since 2012: "Over the past eight years, we have been doubling our business volume every three years."
Fabiana Castiñeira, CEO Allianz Argentina since 2012: "Over the past eight years, we have been doubling our business volume every three years."

Castiñeira: "Eight years ago, industrial lines had almost half of the portfolio. Since then, we have strongly supported the growth of the agricultural, personal and auto lines, with the result that industrial lines now only make up about one third of our portfolio."

Working groups with agents? How has that affected the business?

In response to suggestions made by our agents, we introduced a whole series of different features, e.g. special services for collection, products and transactions. This is important in helping us to ensure that our agents can work efficiently.

 

And what is the outcome?

Last year alone, our new customer portfolio increased by 19 percent. And we are about to launch another new feature: our website for policyholders.

 

How many agents are now working for Allianz Argentina?

We are currently working with 1,500 agents, with around 150 new agents joining us every year. We aim to establish active agent-company relationships based on loyalty and long-term trust. This relationship based on trust is a key success factor and a prerequisite for ongoing profitable growth.

 

What is the induction process for new agents?

For nine years now, we have had a program in place called “Integrados, creciendo juntos” (Integrated, growing together). The program features both services and incentive systems and also addresses how to manage business relationships and how agents cooperate with each other. The results speak for themselves. Agents who have taken part in the program tend to be more successful financially.

 

Prices in the Argentine insurance market are subject to intense competition. How can Allianz Argentina grow and stay profitable at the same time?

The key is to maintain a business balance. We could grow much faster in one area, say in auto insurance, if we withdrew a bit from other areas. But this strategy would not be conducive to sustainable, profitable growth. In addition to a diversified portfolio, Allianz's solvency and brand strength are obviously also key success factors.

 

Has the portfolio changed in recent years?

We have kept the individual lines of business but altered their weighting. Eight years ago, industrial lines had almost half of the portfolio. Since then, we have strongly supported the growth of the agricultural, personal and auto lines, with the result that industrial lines now only make up about one third of our portfolio.

 

Will the industrial lines become less and less significant?

We definitely do not want to squeeze the industrial lines any further, because this area of business provides us with premium volume, reinsurance orders and a good underwriting result. Growth in customer volume, however, can be achieved mainly in the retail business. So in this respect, we have been working on boosting our market share in these other lines, even though they don’t offer underwriting results that are quite as good as in the industrial business and the commission that has to be paid is higher. When it comes to generating sustainable and profitable growth, it's all about finding the right balance. That’s why we are aiming to achieve an equilibrium between the different lines of business.

 

Is the company's workforce growing in line with the business volume?

At the end of 2012, 280 employees were responsible for a portfolio worth more than 1.44 billion Argentine pesos. When we look at companies with comparable business volumes, they usually have double or triple the number of employees. We will certainly be boosting our sales force as our business volume grows. This is not, however, the case in the back office. Our strategy here is to put efficient processes in place and keep bureaucracy at a minimum.

 

To what extent does the high inflation impact growth and the profitability of the business?

Inflation is definitely an issue. In order to gain market share, some providers have become embroiled in a ruinous price war in the past. It has, however, become clear just how short-sighted this strategy was, as it has not resulted in profitable growth in the long run. The price war has now been contained thanks to joint efforts made by the insurance supervisory authorities, agents and associations. In the auto insurance business, inflation is now taken into account when structuring premiums.

As with all content published on this site, these statements are subject to our Forward Looking Statement disclaimer:

 

Stefanie Rupp-Mendetter
Allianz SE
Tel. +49.89.3800-2063
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