Allianz has undertaken an ambitious transformation in the German insurance market, redesigning its motor insurance business end-to-end in an attempt to regain growth in the commoditised insurance sector.
The insurer, among the world’s largest, had long faced headwinds in Germany’s crowded motor insurance market. With 46 insurance groups competing for share and the top five holding half the market, years of price competition left margins thin and growth stagnant. Inflation added further pressure, pushing claims indemnities up 46% between 2021 and 2024, while natural catastrophes, such as the Ahrtal flood, compounded losses.
Against this backdrop, Allianz has sought to reposition its motor insurance offer for profitable growth. Chief executive of Allianz Versicherungs-AG Frank Sommerfeld said the company saw an opportunity “to completely improve the customer experience and differentiate ourselves with service.”
Working with consultants, Allianz used benchmarking to assess market dynamics and best-in-class practices across the value chain. Executives concluded that the group’s multiple brands, each with differing products and pricing, confused customers. The solution was a streamlined, multi-brand strategy, using the Allianz core brand, Allianz Direct as the online P&C insurer, and a partnership with motoring association ADAC to reach distinct customer segments.
The transformation focused squarely on what the insurer thought customers actually wanted. Allianz created an omnichannel approach that is intended to allow policyholders to move seamlessly between digital and physical touchpoints, with consistent products across channels. Digital-first offerings sat alongside agency-based support, giving customers service how and where they wanted it.
Dirk Steingröver, board member for retail insurance at Allianz Versicherungs-AG, said: “Integrating service as a differentiating element in a commodity product like motor insurance has been a game-changer for us. This approach enabled us to enhance our positioning for all our customer segments.”
The overhaul extended across the value chain. Allianz simplified processes through automation and digital self-services, introduced analytics-led fraud detection, and built out a car repair network offering one-click scheduling, repair status updates, and vehicle pick-up and drop-off.
Executives acknowledged the challenges of transforming at scale, especially in an environment with complex IT infrastructure. Mr Steingröver noted the importance of changing the way teams worked: “Building the capabilities of our people, improving the way we worked to operate more efficiently, and getting the support of our community of agents was critical.”
Cross-functional collaboration became the norm, with departments partnering from the start of projects rather than in later alignment stages.
It looks like the work has paid off - by the end of 2024, Allianz’s motor insurance policies grew at more than double the market rate, while maintaining a combined ratio below the industry average. Premium growth reached 14%, outpacing the market’s 11%, and policy count increased by 2.6% compared with the market’s 1.2%.
AI-enabled pricing and predictive tools have strengthened operational capabilities, while customers seem to have welcomed a unified, consistent product suite.
As Mr Steingröver put it: “Our customers now walk into Allianz through a 360-degree door, where the customer can enter at each and every touchpoint and always receive a consistent, comprehensive offer.”
The company’s motor insurance reset illustrates how service differentiation, technology integration and cultural change can redefine performance in a market long trapped in price wars. Allianz’s transformation has not only improved its own growth trajectory but also set a higher benchmark in one of Europe’s toughest insurance markets.
