| Prince of Samoa
Germany, the birthplace of modern cars, is also the country with the oldest history of producing cars.
Since Karl Benz invented the first car in 1886, the German automotive industry has gone through 135 years of development, and the BBA is famous all over the world and has achieved brilliant achievements. In the era of fuel vehicles, the German automotive industry is a nearly recognized fact that the world's first, leading the development of the world's automobile industry.
At the same time, Germany is also one of the countries with the strongest insurance strength in the world, with a mature and sound regulatory and service system, and has given birth to a number of large insurance companies with world-class influence, such as Munich Re, Allianz Insurance, Angu Insurance, etc.
According to public information:
As the fifth largest insurance market in the world, Germany's premium income in 2020 is 258.57 billion US dollars, accounting for 4.1% of the global market share. Among them, property insurance premium income was US$152 billion, accounting for 4.36% of the global market share, ranking third. Life insurance premium revenue of US$106.57 billion, accounting for 3.81% of the global market share, ranked seventh.
In 2020, the German insurance depth is 3108 US dollars (the world average 809 US dollars), the insurance density is 6.8% (the world average 7.4%), from the perspective of insurance depth, the German insurance industry is highly developed, but from the perspective of insurance density, the German insurance market still has room for further development.
The German insurance market is well capitalized, the product portfolio is abundant, and the industry competition is strong. Between 2015 and 2020, the Compound Annual Growth Rate of Premiums in the German Insurance Market was 2.6%, of which the COMPOUND annual growth rate of property and casualty insurance premiums was 3.1% and the compound annual growth rate of motor insurance premiums was 2.7%.
What is the situation of the mature and leading automotive industry, combined with the strong insurance industry? At present, it is precisely the time when the domestic auto insurance reform is rapid, and it is the time when the auto industry is iterating, and auto insurance is undoubtedly facing unprecedented challenges and opportunities. On the other hand, the evolution and innovation of mature markets undoubtedly have certain enlightening implications.
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-Insurance Today-
Market Sketch: Twenty years of reform have also experienced the pain of chaos
In 2020, the original insurance premiums of the German auto insurance market were 28.853 billion euros (about 35.46 billion US dollars), an increase of 1.1% year-on-year, and the market concentration was low and close to perfect competition.
However, over the past 20 years, the industry has also been consolidating, from 125 car insurance companies in 2000 to 92 in 2020. The comprehensive cost ratio of industry auto insurance has been optimized year by year, and the comprehensive cost ratio of auto insurance in the industry in 2020 is 90.6%, and the loss rate is 76.8%. Lenovo has exceeded 100% of the comprehensive cost ratio of car insurance in China, how is this refined?
According to historical data, the excellent underwriting data of the German auto insurance market has not been achieved overnight, and since the liberalization of supervision in 1994, the industry has experienced a transformation process from extensive price war to refined operation:
As early as 1995, after the German car insurance reform
The right to set the terms and rates was completely delegated to the insurance company, and the industry followed by a price war, and the average premium of the car fell, resulting in a comprehensive loss rate rising all the way and the industry losing money across the board. However, thanks to the relatively lucrative profits on the investment side of insurance before 2000, the investment side was able to hedge underwriting losses.
After 2000
As the rate of return on insurance investment declined, it was impossible to continue to make up for the underwriting losses of the auto insurance business, and insurance companies began to attach importance to auto insurance profits, and enhanced the profitability of auto insurance by adjusting business strategies, increasing rates, shrinking business scope, and further market segmentation, and the market resumed benign development.
Recent
The German auto insurance industry is shifting its focus to operational efficiency improvement and talent development:
It is paying more attention to digital capacity building, and has invested a lot of money to realize the whole process of business digital business model, and use digital capabilities to empower operations, channels and products;
It is to strengthen talent training, hire more composite talents in line with the digital transformation of enterprises, and provide retraining education to existing employees to improve their skills; the third is to examine the entire value chain of enterprises and optimize operating costs.
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Challenges in the Internet era: Customer retention and automotive industry upgrading will be the biggest challenges
What are the challenges for German auto insurance business in the future?
According to EY's Report on the German Insurance Outlook 2020, German auto insurers need to strengthen their ability to manage their customers and respond to changes in the automotive industry.
Challenge 1: How to achieve customer retention?
In the digital age, insurers sell insurance products through online or embedded platforms.
On the one hand, the transaction process is often a link, a click, compared with the established communication and trust between customers and agents in the past, the contact between insurance companies and customers has become invisibly less, communication has become lighter, and customer retention has brought challenges;
On the other hand, because the Internet brings transparency to insurance products, customers can easily compare prices, and when they find products with better cost performance, they may turn to competitors, increasing the cost of customer acquisition in the insurance company market.
As a result, auto insurers need to strengthen the maintenance of their relationships with customers, such as providing online add-on services, adopting a robust customer relationship management system, and consolidating customer service capacity building.
Challenge 2: How to respond to the changes in the automotive industry?
The German automotive market is undergoing major changes, and emerging mobility concepts are also having an impact on mobility. For example, self-driving technology and shared transportation are in full swing. Therefore, auto insurance companies need to actively pay attention to the market trends in the automotive industry and develop corresponding product portfolios to meet the needs of customers according to these development trends.
German insurance companies need to do a good job in four aspects in the future to stand out in the fierce competition:
It is to actively embrace digitalization, internalize it as a competitive advantage, and reduce operating costs;
It is to pay close attention to the development of the automotive industry, promote product innovation, and enhance competitiveness;
It is to invest in digital transformation, feed back operations, reduce costs and increase efficiency;
It is to formulate strategies to achieve economies of scale and seize the opportunity of industry integration.
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Three case studies to explore reform: a journey driven by german auto insurance innovation
Many people's impression of Germany is stereotyped and conformist, but it is not. Some companies have already taken steps on the road to innovation, not only to improve operational efficiency and customer service quality, but also to take the lead in the new travel car insurance market.
Case 1: Embracing embedded auto insurance solutions
Automotive industry solutions company under the German insurance company and Cazoo, a well-known online trading platform for cars in the United Kingdom, have cooperated in the German market to launch the "Easy Start Insurance" product.
This innovative product allows customers to enjoy the included car insurance when they buy a car on the Cazoo online platform. After the vehicle is delivered, customers do not have to worry about purchasing insurance and vehicle registration, and do not need to go through any cumbersome procedures, they can start to enjoy the new driving experience and realize a true "one-stop car purchase".
After the free car insurance that comes with the offer expires, customers can log on to Angu's nexible online insurance platform and easily renew their policies with the click of a mouse. The convenient and smooth process creates real value for customers.
Case 2: Layout driverless as soon as possible
Currently, the highest degree of automation for registered vehicles is "level 2", that is, despite the complex assistance system of the car, the driver still has to put his hands on the steering wheel and drive with full concentration.
However, German automakers are already intensively deploying "Level 3" autonomous driving, where in some scenarios the driver can take his hand off the wheel and focus on doing something else.
Tech companies like Google are also doing a lot of development and testing, developing "level 4" or even "level 5" Robotaxis that will no longer have a steering wheel.
For insurers, autonomous driving will bring significant changes, especially in terms of risk assessment, pricing and claims processing.
For example, the widespread use of sensor technology and powerful processing power mean that risk assessment will become increasingly data-driven. Insurers need to be prepared for smart data, working closely with automakers to understand how the various systems of self-driving cars work. To date, Munich Re has underwritten autonomous vehicles from more than 20 suppliers in Europe, North America and Asia.
Case Three: Internet Solutions
Mobility models are undergoing dramatic changes, including new types of services such as car-sharing and car as a service. These changes put forward higher requirements for the informatization and digitization of insurance business, and the existing Internet technology infrastructure is difficult to meet.
With the Siepp S/4 insurance system as the infrastructure, the automotive industry solutions company provides technical support for the cooperation between the automotive service and insurance industry by working with the automotive industry, auto financial institutions, sales channels and new travel solution providers, and the new system integrates customer service processes from three aspects: insurance application, contract processing and claims management, with consumers as the connection point, specifying smooth, chained auto insurance service procedures, making the entire service process simpler and more convenient.
postscript
Reform has only just begun, but the window of opportunity is fleeting
How will people travel in the future?
How will the new way of travel affecting the insurance industry?
Will consumers prefer to buy cars online in the future?
When will autonomous driving become widespread?
As cars get smarter, insurance businesses have to catch up. From extensive price wars to digital empowerment, from refined customer operations to advance layouts for new travel, the German insurance market has made many layouts in the new era of auto insurance and proposed more innovative solutions.
For example, the membership value-added model, the integration of insurance and automotive software, targeted customer service and integrated leasing/insurance solutions are used to drive the auto insurance industry to keep pace with the times and bring better service and experience to customers.
Domestic insurance companies can also benefit from the rainy day through cooperation and exchanges with cross-industry partners, and apply these insights and practices to the Chinese market, without indulging in the business model of the past. Window of opportunity, fleeting.
End
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