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Multinational insurer Allianz is using its investment firm Allianz X to fund growth opportunities around the world.
German-based multinational insurer Allianz is transforming itself into a “Living Business” that delivers hyper-relevant products and services to customers across the world.
Central to Allianz’s approach to transformation is its commitment to investing in a wide range of new business opportunities. This strategy has strengthened its presence in a variety of promising markets and territories and positioned the carrier to capitalize on promising new revenue streams.
“Targeting emerging opportunities”, as I mentioned in an earlier blog post, is one of the key hot spots that organizations need to tackle to transform themselves into Living Businesses. Allianz has identified it as priority.
The carrier is using its digital-technology investment firm, Allianz X, to drive growth beyond its traditional boundaries. Founded in 2013, Allianz X has invested in 15 promising start-ups in five continents. Early this year Allianz doubled its investment in Allianz X to €1 billion.
Among the start-ups that Allianz X is backing are firms developing technologies and products that might help Allianz enhance its productivity, simplify its operations and strengthen its traditional customer offerings. They include quantum computing firm 1Qbit and cloud-based analytics service provider Quantemplate.
Other Allianz X investments are disruptive ventures that have potential for high growth. They include N26, one of the fastest growing digital banks in Europe with operations in 22 countries, innovative micro-insurance provider BIMA, which specializes in emerging markets, and Lemonade, a US home-insurance provider that combines artificial intelligence with an extensive mobile platform.
Allianz has also invested massively to transform the customer experience it delivers across its many operating units. It is applying a cross–country, digital–factory model to systematically share knowledge and best practices across geographies as part of a “digital by default” strategy.
Allianz, like all other insurers that are transforming themselves into Living Businesses, is committed to increasing its investment in growth opportunities beyond its core activities.
Insurers need to be cautious in how they identify and select new value propositions and business models.
To successfully target emerging opportunities, insurers need to be rigorous in assessing opportunities as well as identifying and selecting new value propositions and business models. Understanding their customers’ changing needs and preferences is just the first step. Insurers must then pivot their growth strategies to take advantage of opportunities beyond their traditional activities, position themselves within a competitive arena of rapidly developing ecosystems, and develop new forms of partnerships.
This will require insurers to frequently recalibrate their growth investments as they spot new opportunities and also as they gain a deeper understanding of the potential of the ventures they’ve chosen to support. What’s more, insurers working towards becoming Living Businesses will need to regularly balance the investment required to fund the growth of their core activities with the needs of more risky disruptive ventures that promise substantial long-term returns.
Targeting emerging opportunities is just one of the key pathways insurers should embark on to become Living Businesses. Others include designing products and services around the needs of customers, rewiring business and organizational culture, building engagement channels, and scaling platforms and ecosystems.
Insurers looking to become Living Businesses should venture along all five pathways. However, there’s no ideal sequence they need to follow. Each company should chart its own course by drawing on its own resources and experience. The good news for long-established market incumbents is that age is not an impediment to progress on this journey. Our study of financial services firms that have changed themselves into Living Businesses shows that younger companies have no advantage over their older counterparts during this transformation.
In my next blog post, I’ll describe how one innovative insurer is using its powerful ecosystem and technology platform to become a successful global Living Business. Until then, take a look at this link. I think you’ll find it useful.