Global, Germany-based reinsurance giant Munich Re is looking to transform its business model in order to get closer to the client, essentially reshuffling the value chain with the help of technology and digitisation to reduce complexities and boost efficiency.
As part of its recent annual 2017 recap and 2018 outlook, Munich Re underlined a desire to transform the value chain and ultimately move closer to the end buyer of protection, leveraging traditional value creation and transforming businesses to reduce the distance to the end customer.
Speaking during the company’s press briefing, held on Thursday March 15th, 2018, Munich Re’s Chairman of the Board of Management, Joachim Wenning, discussed cost-efficiencies, digitalisation and getting closer to the customer.
“We are investing in new competencies and new business models. Munich Re intends to move further towards the customer. No matter whether I look at the classic primary insurance, or reinsurance, there is one clear trend of specialisation and we are all moving towards the customer, the end client.
“Each unit has a strategy to integrate digitalisation on the front-end as they move towards the customer,” said Wenning.
The reinsurer appears set on transforming its business in order to support the future viability of the company, utilising technological advances and increased digitisation to increase efficiency and add value.
“We are developing new digital business models – such as for the Internet of Things. We are the world leader in the rapidly growing cyber insurance market. And insurance start-ups see Munich Re as their go-to partner. We also have our own start-up, as it were, in the form of our purely digital insurer, nexible.
“We are investing heavily in digitalisation at ERGO, and are working to offer customers a seamless and modern customer experience – whether they choose to deal with us online, by telephone, or in person at one of our offices.
“At the same time as building digital competence, we are reducing complexity in other areas. Internal processes are being streamlined and made more efficient. We are reducing costs and lowering our headcount where we can do so without harming our business. This is how we are making Munich Re fit for the future,” said Wenning, as part of his annual letter to shareholders.
Despite the firm’s ongoing transformation, Wenning noted that insurance and reinsurance will continue to be the heart of its business. Munich Re remains one of the world’s largest reinsurance companies, and is clearly looking at new strategic options to build a diversified profit base, which includes reshuffling the value chain and expanding the reach of re/insurance.