Press release 1 June 2017
- Sales organisation efficiently structured
- Progress with digital transformation
- Imminent market entry of first purely digital provider nexible
- New products launched
- International strategy streamlined
- Job reductions on target
- Financial targets for 2017 will be achieved
The ERGO Strategy Programme (ESP) is taking effect. Having launched a full-scale restructuring programme one year ago, the ERGO Group is now more efficiently structured, is investing systematically in digitalisation and strengthening its international organisational structures. Following successful completion of its Strategy Programme in 2021, ERGO intends to contribute more than 600 million euros in the long term to the annual net profit generated by its parent company, Munich Re.
"Fit, digital and subsequently successful – these are the goals we have set ourselves", says ERGO’s Chief Executive Officer Markus Rieß. The Company has made significant progress in reorganising its sales forces – since the beginning of this year, there has been only one tied agents’ organisation with 55 locations across all of Germany.
ERGO furthermore is pressing ahead with full force in terms of digitalisation, a great challenge being the reorganisation of its IT operations. "In this sector, we still have a fair way to go", says Markus Rieß. With a view to developing new products more quickly, ERGO Digital IT has been formed, located in Berlin and Warsaw. At the same time, ERGO Direkt in Nuremberg is being set up as a so-called Online Competence Centre – a basic requirement for offering customers access to ERGO’s products and services online, offline, intuitively and efficiently. Initial success – 550,000 users are currently registered in the customer portals, representing an increase of 56 percent compared with the numbers in 2015.
In future, customers wishing to use a purely digital insurer and benefit from the corresponding price advantage will find suitable offers at ERGO’s subsidiary nexible. In the course of this year, the first motor product under the nexible brand name will be coming onto the market. The formal requirements have already been met, with nexible operating as a stand-alone enterprise with Neckermann Versicherung AG as risk carrier.
The Company has made progress with its new product development. Insurances for motor vehicles, personal third-party liability, personal accident and home contents have been structured on a modular basis, which means that customers have the flexibility to include individual elements in their insurance coverage. A cyber insurance for companies has been introduced on schedule. During the first quarter of 2017, three asset management funds were launched for old-age provision. As planned, the classic life insurance sector is to be separated into its own unit at the beginning of 2018.
Apart from digitalisation and enhanced efficiency, ERGO is also focusing on international business as part of implementing its new strategy. With some 10,000 employees, ERGO International is represented in more than thirty countries. COO Alexander Ankel describes the strategy as follows: "We aim to strengthen our presence in selected countries, invest in growth markets and roll out global business models." According to Alexander Ankel, Poland and the Baltic region are among the selected countries, while in terms of growth markets, ERGO International has its eye specifically on India and China. Global business models include for instance legal protection and travel insurance.
Over 50 percent of the reduction of about 1,800 jobs targeted in the course of the Strategy Programme has already been realised. "In all, we will achieve net cost savings of almost 100 million euros by the end of this year", says ERGO’s Chief Financial Officer Christoph Jurecka.
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About the ERGO Group AG
ERGO is one of the major insurance groups in Germany and Europe. Worldwide, the Group is represented in over 30 countries and concentrates on Europe and Asia. Within the group, three entities manage domestic and international business, as well as digital and direct business (ERGO Deutschland, ERGO International and ERGO Digital Ventures). About 44,000 people work for the Group, either as salaried employees or as full-time self-employed sales representatives. In 2016, ERGO recorded a premium income of 17 billion euros and rendered benefits to customers of 16 billion euros. ERGO is part of Munich Re, one of the world's leading reinsurers and risk carriers.
More at www.ergo.com
This press release contains forward-looking statements that are based on current assumptions and forecasts of the management of ERGO Group. Known and unknown risks, uncertainties and other factors could lead to material differences between the forward-looking statements given here and the actual development, in particular the results, financial situation and performance of our Company. The Company assumes no liability to update these forwardlooking statements or to conform them to future events or developments.