Allianz Partners has had very a busy year, having diversified its business into a new insurance line and having faced challenges from the market underpinning its core line of business. According to chief underwriting officer Eftim Stojanov, the second half of 2018 saw a significant spike in customers enquiring about their travel insurance – the root of which can be traced back to one very high-profile case.
“The key challenge for us last year was the Abby Hartley case, which raised a lot of public awareness with regards to travel insurance risks,” Stojanov told Insurance Business.
“A lot of people were aware of overseas medical expenses but hadn’t necessarily felt their impact, and that resulted in a huge increase in calls from the general public wanting to ask questions about their travel insurance – what they’re covered for, what a pre-existing condition is, what they need to declare, etc. Our stats show that we received the same amount of calls we usually receive in a week in just one day, so this really impacted us significantly.”
“The second challenge has been our diversification away from travel insurance,” Stojanov explained.
“Our reason for this was the fact that when you’re writing only one line of insurance, you’re exposed to all the underlying industry fluctuations and various economic factors. Travel in New Zealand is affected by basic economic factors like exchange rates, and you also have the vulnerability of airline operators, flights, etc. If you’re a mono-liner, you end up essentially moving with the travel industry, and your portfolio goes up and down with it.”
Stojanov says this is even more the case because travel is not a ‘renewable’ insurance product where you have stability regardless of the economic performance of the underlying industry. Travel is a one-time purchase, and adding another business line would balance any potential volatility in the travel industry
“Aside from not putting our eggs in one basket, we also ascertained that the pet insurance market is not saturated in a way that’s comparable to other lines of insurance,” he continued.
“The insurance markets of the UK and Australia have about double the penetration rate of pet insurance compared to New Zealand. This was combined with the fact that we have the highest rate of pet ownership in the world, second only to the United States – and this means that there is a great potential here for this market, especially since the number of players is currently very low and the offering is not optimal. Kiwis love their pets, and we are now able to assist them in a market that has a limited number of underwriters – and by extension, increased competition will also mean that the overall offering in this market will improve.”