Joseph Gross advises people to start saving before it’s too late
By Satoko Omata
BT: The main reason for insurance is protection. How do you protect your family and instill in your children the concept of protection?
Gross: It’s not easy. (laughs) 18-year olds, teenagers; their mind is on different aspects. The only way to do it with young people is to transfer values to them: the values of being responsible, the value of caring, the value of respect; whether respecting life, environment or money.
We educate them socially, so they understand this is not a given. Once they understand those kind of values, they’d understand the importance of taking care, protecting and taking precautions.
BT: You grew up in Germany and recently moved to Malaysia a couple of years ago. How is the culture and lifestyle towards protection different between Germany and Malaysia?
Gross: In Germany, the topic of protection is huge. Another concept, which Malaysia shares, is the need to own property. So the concept of insurance has been there for a long time. When you’ve accumulated wealth, your key thought is how do I protect wealth.
Contrast that with Malaysia, it’s an emerging economy. People here are still in the phase of accumulating wealth. In many emerging economies, the psychology for people is that the sign of accumulating wealth is consumption. At some point, the mindset will change and it’s no longer just buying but also building up cash reserves. Once people have the car, house, only then will they think about investing into long-term life insurance.
Gross: My first recommendation to those aged 19 -25, start saving. The earlier you save the more you’ll get because of the compound interest rate. Insurance can give you the saving component and the protection component, that’s the benefit versus a fund in the bank. Governmental fund protection may not be sufficient to carry people through to their old age.
Secondly, when you’re building a family, think about health protection. There’s a lot of affordable governmental health care, but some customers want access to specialists or special treatment. Each customer would need to decide what level of protection they’d want to have.
BT: How do you see the insurance market change in the future?
Gross: The insurance industry has been a laggard in terms of digitalisation. There is no debate that digitalisation is going to 100% transform our business model and our industry. Allianz’s approach in general is: fish where the fish are. Traditional insurance companies tend to fish in their own pond and be astonished at why nobody is at the pond.
Doing that means you need to redesign your products, your rating engines, you need fast quotations and much more. You need to streamline and adapt your whole value chain towards digital offers. All our new products need to be designed for digital; which means it needs to be simple, fast and convenient, and provide best value for money.
BT: What are some of the shortcomings in the industry now and how is Allianz’s approach different from the others?
Gross: We must move out of this mouse trap of just adding features or clauses to our products. In Europe when our agents talk to customers, they first identify what are the customer’s needs, their life situation, have they got kids, what are their desires, about the customer’s life. Right at the end, they talk about Allianz’s solutions.
Customers will feel that you understand them, not just trying to push a product because the agent wants to earn a commission.
BT: What is your vision for Allianz and what are your future plans?
Gross: Majority of our investment has gone into digitalising our whole interface with the agent. Our agents have iPads and they can do literally everything on it for the customer: transact, buy, purchase; everything can be billed, paid and signed electronically.
95% of our new submissions are all electronic; it’s no longer an option to just put it on paper anymore. My vision is 100% digital to agents, then they can spend more time advising, visiting and offering solutions to the clients. Some companies have invested in a chatbot to reduce servicing costs, but my approach is slightly different.
I want to make it more seamless, no need for one to ask questions; because the processes are so smooth and so digital, together with meaningful human service, there are no more questions. That’s an exaggerated vision but that would be desirable.