ARAG leader: Why I’m in insurance

Enabling the pursuit of legal rights

ARAG leader: Why I’m in insurance

Insurance News

By Daniel Wood

Renko Dirksen (pictured above) enjoys his global responsibilities.

“I have the privilege to not only work in Germany but to work in so many different countries and experience so many different cultures and ways of doing the insurance business,” he said.  “That’s really exciting.”

Dirksen is on the board of directors for ARAG, a firm specialising in legal expense insurance (LEI). ARAG has a presence in 19 countries around the world. While the firm doesn’t have a physical presence in Asia, it is a significant player in insurance markets. ARAG regards itself as “the leading legal insurer worldwide” and is the largest privately owned insurance company in Germany.

Insurance Business met with Dirksen on his recent visit to ARAG’s Australia business. The operation Down Under was launched a few years ago and Dirksen said he was there to get a feeling for the local challenges and opportunities.

From law school to ARAG

IB asked the board member from Düsseldorf how his insurance career started?

“I remember when I graduated from law school, I found that I did not want to practice as a lawyer or work as a judge or prosecutor, but I did want to get into management and business which was everything I found interesting,” he said.

Dirksen came across a job offering from the ARAG Group – and the rest is history. He became the assistant to the CEO.

Part of the reason for his longevity with the firm, he said, is his confidence in the product which he thinks has “a lot of value.”

“Having a legal expenses insurance policy in your pocket really helps,” said Dirksen. “Then you can pursue your case at every level and go to the highest court to pursue your rights.”

The other reason is, he said, is how an insurance career involves working collaboratively to solve problems.

“At the same time, people energise,” he said. “I really like to work with people to solve problems, to interact with people and my colleagues.”

Dirksen said this makes the insurance business “very exciting because there are so many different people from so many different backgrounds.”

Medical negligence, unpaid bills and corporate scandals

He told IB about some of the ways ARAG’s LEI has helped people pursue their legal rights. The examples included labour disputes, cases of medical negligence and small businesses chasing up unpaid bills.

“We do a lot of clinical negligence cases, especially in the UK,” Dirksen said. “They are very often heartbreaking to be honest.”

However, he said people with ARAG’s LEI insurance have been able to achieve better outcomes and rebuild some sort of quality of life.

“When you see the initial offering from the other side and you see the outcome, then our customers know that it’s really worthwhile to have this policy,” said Dirksen.

One case in which ARAG’s customers were able to pursue their rights made worldwide headlines.

“The diesel scandal, for example with Volkswagen (VW),” he said. “With us the average consumer can say, ‘I’m going to take up the fight and go against Volkswagen’.”

Dirksen said LEI provided individual VW owners with a way to pursue justice against a huge corporate firm.

“In most situations, consumers wouldn’t meet them at eye level – Volkswagen would just outspend them,” he said. “In some ways we are like David´s slingshot against Goliath.”

According to information from ARAG, the firm made payments of approximately €70 million for 36,000 cases in connection with the diesel scandal. The ARAG customers had purchased vehicles from VW and other manufacturers that used the same emissions-cheating device and were able to use their LEI policies to pursue compensation.

More on the VW diesel emissions scandal

In 2016, car maker Volkswagen was forced to recall millions of cars – about 8.5 million across Europe and half million in the US according to a BBC News report – after a car emissions scandal.

According to the Environmental Protection Agency (EPA) in the US, many VW diesel cars being sold in America had a “defeat device.” This software detected when the vehicle was being tested and changed the performance to improve emissions results.

VW admitted it was cheating emissions tests and has paid out billions of dollars in costs and penalties. In Australia, the company received a fine from the Australian Competition and Consumer Commission (ACCC) of $125 million, the highest ever imposed by the Federal Court for breaches of consumer laws.

“Volkswagen’s conduct was blatant and deliberate,” said Rod Sims, the ACC chair in a media release.

However, years later, VW continues to fight court battles.

In June, a former Audi CEO (VW owns Audi) was handed a suspended sentence of nearly two years for his role in the diesel scandal. According to Reuters, former and current VW managers are still on trial in Germany and there are more than 100,000 diesel emission scandal cases still pending at the highest court alone.

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