INNOVATION MANAGEMENT [WBB10202]

REPORT FOR ALLIANZ INSURANCE COMPANY

GROUP 1F10 JULY 2018

Prepared by:

NAME ID NUMBER
MOHD HANIF HAKIMI BIN HAMIDI 62214217122
TAREQ NABIL SALEH ALHAROGI 62212216381
MUSTAFA M.M DALLOL 62212516020
NUR FARAH SYAKILA BINTI JASMI 62214115608
FURKAN SEZIGN 62215216405

Prepared for:

DR. SHEIKH MUHAMAD HIZAM BIN SHEIKH KHAIRUDDI

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 TABLE OF CONTENT

NUM TOPIC PAGE NUMBER

1.0 Product or Service (Allianz Background) 2
1.1 Innovative ideas on value properness of Allianz services 3
2.0 Allianz Group (Partners and resources) 3
2.1 Allianz innovation of business model 4
3.0 Distribution Channels of Allianz Group 5
3.1 Marketing Strategy of Allianz Group 6
4.0 Customer Relationship Strategy 7-8
4.1 Marketing Strategy of Allianz Group 9-10
4.2 Recommendations 10
5.0 Cost Structure and Revenue Stream 11-14
6.0 Conclusion 15
7.0 Reference 16

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1.0 Product or Service (Allianz Background)

Allianz worldwide care is an international company for introducing and providing many
types of insurances and services to their clients. Allianz was founded in 1890 in Berlin,
Germany and at the beginning it started up as a transport and accident insurer only in Germany
but then after 3 three years, Allianz expanded their business to global and opened an office in
London with providing transport to German customers with ownership abroad and in the same
year Allianz opened many offices in different countries in Europe and in the united states. In
1914, for the first time Allianz company opened the doors for women to work in their company
and that was one of the best useful thing that Allianz made to the society when they used the
women way of thinking and after that people trusted this company which made them buy most
of their accidents insurances from Allianz.

Types of services that Allianz company provides:

1) Life insurance: provides for your family or some other named beneficiaries on your
death.
Two types of life insurance:
A) Term insurance which provides coverage only during the term of the policy and pays
off only on the insured’s death.
B) Whole-life insurance that provides savings as well as insurance and can let the
insured collect before death.
2) Health insurance: that covers the cost of hospitalization, visits to doctors’ offices and
cost of medicines.
3) Disability insurance: it pays a certain percentage of an employee’s wages or fixed sum
weekly or monthly if the employee becomes unable to work through illness or an
accident.

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 4) Homeowner’s insurance: this type of insurances for damages or losses due to fire,
theft and other named Perlis.
5) Accidents insurances
6) Travel or luggage delay insurance: when something wrong faces the traveller like
money got stolen or medical expenses while travelling all of that will be under the
insurance.

1.1 Innovative ideas on value properness of Allianz services

Allianz always try to find any innovative ideas to improve their service quality and to
develop a trustworthy relationship between their customers to deliver them good values. For
that Allianz started merging with other financial companies to introduce new data processing
methods to record and calculate statistics, making the business more efficient for their
customers and profitable for Allianz. Then in 1956, Allianz introduced electronic data
processing to get faster information receiving and sending among their clients and partners.
Until 1969, Allianz keeps up to date with modern technology, using ELIAS streaming data
processing products. For that all data is performed electronically and employee numbers started
to reduce due to efficiency of new innovation methods.

2.0 Allianz Group (Partners and resources)

In partnership with Allianz clients and intermediaries it has created one of the world’s
strongest financial communities over 86 million retail, commercial and corporate clients have
put their trust in Allianz to provide them with their needed insurance to protect them and to
provide the technical insurance expertise, international reach and financial stability which helps
them to identify, mitigate and their changing risks to make a sustainable business opportunities.

The mission towards Allianz partners is helping them and caring about them and to
make their relationship between Allianz and their partners greater by improving brand loyalty
and making people’s lives safer, simpler and more enjoyable. For that Allianz focuses on how
they add values to their business partners, their customers and their employees.

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 As a part of Allianz group, they have a strong foundation to be innovative and nimble to
push technological and geographical boundaries which allows Allianz to be flexible and
responsive to their partners. Allianz has four specialized Allianz partners’ lines of business,
which are used to market their products and services. These are the four commercial brands:

1) Allianz assistance
2) Allianz automotive
3) Allianz care
4) Allianz travel

Key resources of Allianz is driven forward on travel protection, tourism trends, assistance
services and more of types of insurances.

2.1 Allianz innovation of business model

Through Allianz research and development initiatives, they push boundaries to create the
newest generation of cutting edge, timely solutions for their customers and partners.

 R&D keeps innovation front and centre

At Allianz worldwide partners, Allianz has established innovation centres to reinforce and
advance our expertise in each of our lines of business. Allianz continuously research how
to strengthen their position as a telematics partner, notably in connected car, engineering
and mobility topics and expand the international scope of their technical skills in electro-
mobility and autonomous driving.
 Understanding and answering the mobility challenge
Allianz has a long-term partnership with a crowdsourcing innovation platform, and it has
jointly launched a successful mobility observatory to identify and analyse the latest
mobility-related initiatives around the world.
 Embracing the digital journey
Allianz continue to digitalise and simplify the customer journey and develop pioneering
apps for smartphones and other devices.

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3.0 Distribution Channels of Allianz Group

Allianz agents are all around the world to serve its customers and they are the largest
distribution channel of Allianz. Allianz agents also serve its customers with its advisor force
by segmenting customers into various segments. Allianz use an aggressive strategy of
procuring quality service and expansion of this business, and they heavily focus on sales and
people development. Allianz also have agency agency-building distribution strategy under
which they finance, train, recruit and supervise their agent or advisers. Agents have direct
relationship with customers, and they have personal contact with them, so that customers
provide them feedback about what they expect and their needs. Moreover, the Allianz Group
integrates its activities with Advance Bank and financial planners into a joint sales model of
Allianz and Dresdner Bank, so that it increases the efficiency of processes and enable them to
achieve their goals in the growth markets. One of the distribution channels of Allianz is its
branches. Allianz Group bought Dresdner Bank previously and it uses Dresdner Bank points
as its branches. Allianz insurance options are promoted by Dresdner Bank to customers for
their needs and wants. As Dresdner Bank works as branches of Allianz Group, it is also 3rd
party distributor of Allianz. Both of them make mutual sales.

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3.1 Marketing Strategy of Allianz Group

Allianz aims to have client acquisition and they want to keep them as its customers. They
also use marketing segmentation strategy to carry out different marketing campaigns. The
company analyzes the needs and expectations of its customers including financial services so
that they can be segmented. For example, there are business insurance and private insurance.
Those who needs insurance for their health, retirement planning and house insurance are
included in private insurance. For those who needs credit insurance and insurance for their
businesses are included in business insurance. Besides that, they are also segmented by their
geographic and demographic segmentation. By segmenting the customers, Allianz focuses on
the subset of prospects to convince customers purchase the service that is offered by the
company. Moreover, Allianz created an international marketing plan and it also did analysis of
the research work of the market so that it will enable them to make useful decisions about the
nature of the market. Product differentiation and positioning is another strategy of Allianz
Group. They serve different kinds of products to its customers based on their demands, so that
these differences from other companies make Allianz unique and it makes them more popular
in the industry. Allianz also use push/promotional and pull/promotional strategy for its
international marketing. The company uses push/promotional strategy to create customer
demand internationally by using its trade promotion activities and sales force. Pull/promotional
strategy is used for expenses on promotions for customers and advertising to create consumer
demand for services. Lastly, Allianz involves in purchasing naming right of some places such
as Allianz Arena. Allianz Arena is a stadium in Germany, and Allianz purchased its naming
right. It is also the first stadium in the world with a full color changing exterior. This color
changing feature makes the stadium popular but also the Allianz Group.

I think that Allianz should organize some events such as sport events or public events for
its clients to make them feel loyalty to the company. They can also increase the number of
places they purchased the naming rights of. Besides that, they should create innovative products
and services and they should launch an app to promote the products and services they offer,
new types of insurances and news about Allianz so that it will increase the popularity of the
company. Allianz should also make an agreement with other banks to offer its products and
services as Dresdner Bank offers.

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4.0 Customer Relationship Strategy

Allianz Global Assistance has developed Contact Centre software, called CReaM,
which has been designed very much with the user in mind. Development of the software was
a collaboration between Operational, Marketing and IT people, and the outcome is a very user
friendly, practical tool for managing all types of interaction with customers.

The application has been designed to steer Contact Centre agents through each process,
providing all the necessary information in a format that helps them to work effectively.

This is an extremely important point, as the people who develop CRM strategies are
not the people who deal directly with customers. The task of direct customer contact is usually
in the hands of younger, less experienced people, so providing them with a common sense, hi-
tech, but practical tool will greatly improve their chances of success.

CReaM is capable of handling various types of inbound and outbound contacts, plus
has modules to handle Prospect Management, Complaint Management and Customer
Satisfaction Surveys (CSI).

For customers who use Allianz Global Assistance to provide their Contact Centre
services, CReaM is provided for use free of charge (i.e. no licensing costs). It is also available
for purchase for those who already have Contact centre resources in place but are looking to
upgrade their CRM software.

Our view of Customer Relationship Management is that it involves two very distinct
parts. The first is the process of developing a strategy of how you will manage interaction with
your existing and potential customers. The second part is the execution of this strategy.

It is the combination of the CReaM software and Allianz Global Assistance’s expertise
in the Contact Centre area that makes Allianz Global Assistance a good choice as a Contact
Centre to execute your CRM strategy.

Allianz Malaysia’s initiative to assist agents in engaging with their customers through
social media continues to receive positive response. The project, launched by Allianz just over
a year ago, has grown and expanded, boasting a connected online community of digital savvy
agents and customers alike.

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 The project assists agents in reaching out to customers through the creation of Facebook
business pages. These pages not only include recommended articles, but also pictures and
videos relating to current topics related to the industry. This project already a success in several
other entities in Europe, is now proving to be the same in Malaysia.

Allianz Malaysia’s general and life insurance entities now have a total of 45 agents
managing their business pages on social media. As of 5 September 2015, these agents
collectively have 7,183 fans. Furthermore, there have been a total of 4,677 published posts on
their Facebook pages. These numbers are only growing; proving that social media engagement
within and outside the community is on the up and will continue to rise.

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4.1 Customer Segments

Figure 3
Segment 5: Segmentation by Plan & Service Attributes
The Disconnected

Segment 4:
4% Segment 1:
The Traditionalists
The Unswayable
16%
34%

20%
Segment 3:
The e-Patients

26% Segment 2:
The Easy-Does-Its

The Traditionalists: are the largest segment and desire full coverage at a low cost.
They want coverage from out of-network providers and easy access throughout the country.
Unrealistically, they are a group most concerned about cost, but also the most interested in
premium services and having a healthcare advocate. Despite concerns about costs, they are
NOT willing to participate in health activities or doctors’ visits for financial incentives.

The Easy-Does-Its: want coverage from out-of-network providers and easy access
when traveling. They are willing to have annual physicals, participate in activities to improve
heath to save money, and are somewhat willing to switch primary care providers. About one-
in-three would like a healthcare advocate to help with reimbursements, scheduling and
complexities. They do NOT care at all about online access or tools.

The e-Patients: are all about technology. They want to manage insurance online and
are open to e-visits. Out of-network coverage, knowing and trusting the insurer and low costs
are also important. They have weak loyalty as they are completely willing to switch primary
care providers for these other benefits. Not surprisingly, this segment is younger, with a large
portion under 40 years old.

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 The Unswayable: want to manage insurance online but will NOT switch primary care
providers. Despite proclivity to online insurance management, they are not interested in e-
visits. This group is least concerned about costs and also least inclined to want an advocate.

The Disconnected: only a small portion of the population, and is completely unengaged
with insurance and related decisions. They are more likely to be uninsured, skew male, are the
least educated, and have the lowest income.

4.2 Recommendations

1. Cloud-Based CRM

Cloud computing services continue to rise, and CRM has not been left behind in this
area. cloud-based software is a cost-efficient means of gathering customer data. Unlike before,
on-site resources no longer need to scout for leads to input into a system for future sales calls;
sources of customer data are already available. Cloud-based CRM will gain momentum
as cloud-based applications continue to progress.

2. Crowdsourcing

With customers gaining voice through social media, enterprises are increasingly able
take advantage of crowdsourcing for business improvements. Tapping current customers for
fresh ideas, solutions and expectations can help employees across an organization provide the
innovation and interactive relationship that a growing number of customers now expect. This
means that CRM will no longer be just for lead generation and marketing, it will also provide
a source for new innovation.

3. Social CRM

Social media marketing remains on an uptrend and companies are paying attention.
Consumers are empowered by social networking sites to influence product or brand image and
perception. Negative feedback no longer simply routes a call to customer service; businesses
can expect feedback to reach potential markets before they do. Software vendors are now
responding to social CRM needs. Social media optimization and gamification are gaining
traction as marketing strategies, keeping customers engaged with the brand and company.

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5.0 Cost Structure and Revenue Stream

Statements of Financial Position

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Statements of Profit or Loss

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Statements of Profit or Loss and Other Comprehensive Income

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Suggestion for Innovative improvement to increase the profit for ALLIANZ INSURANCE
COMPANY as follows:

 Allianz could innovate by introducing new technology, techniques or working

practices - perhaps using better processes to give a more consistent quality of
service.
 Allianz company could overhaul their clients and partner distribution
processes, for example, offering customers a home-delivery service, possibly
tied in with online and telephone ordering.

 When Allianz main competitor's insurance services have a reputation for being
cheap and cheerful, rather than trying to undercut them on price of Allianz
which could innovate by revamping their marketing to emphasise the quality
of Allianz merchandise - and consider charging a premium for them.
 Allianz always try to have a deep study on each country’s marketplace which
they open in and understand how innovation can add value to their customers.
For more information on analysing country’s marketplace.
 Allianz could find out who their competitors are and where they operate. Use
the Internet and advertising sources such as the Yellow Pages to find out about
their services, prices and operating culture. This can give you an overview of
their selling points, as well as any areas Allianz might be able to exploit.
 Allianz could develop an e-newsletter to stay in touch with their clients 24/7.
 Make a monthly payment option in order to let Allianz’s clients to spread out
their expenses.
 Because there are a few diseases such as cancer cost high amount of money
(for a cancer treatment is cost RM 300,000), Allianz could target Malaysian to
take health insurance by providing health efficient insurance lower than the
cost of cancer disease treatment.

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6.0 Conclusion

Based on our research, we can conclude that Allianz Insurance Company have to
establishing regulatory platforms, such as the regulatory sandbox approach, that allow
innovative technologies to enter the market, and this will assist in encouraging start-ups to
develop their business model while becoming acclimatised with regulatory requirements. Start-
ups may opportunities to initiate their business in markets which have such a ready platform.
More broadly, these technologies have the potential to bring better and more customised
insurance coverage to more people, including those in the lower income bracket, and bring
greater financial protection. In addition, the new distribution models can simplify the insurance
process, and bring insurance to less developed markets. However, Allianz Company will have
to meet insurance regulations as well as wider data protection and cyber security requirements
as they try to scale their business. Ensuring that not only is the customer experience positive
when it is scaled up, but that consumer protection and safety standards are met will remain a
challenge for start-ups and regulators alike.

For the second innovation, Allianz Company have to developed of innovation hubs and
regulatory sandbox approaches provides an environment for new technologies and innovations
to be nurtured, and has the potential to enable a greater understanding of their impact on the
markets. However, greater clarity on the appropriate level of regulation in such platforms and
how they graduate into full regulation requires further discussion in order to balance the need
for innovation as well as the need for adequate protection of policyholders. Besides that,
Allianz could find out who their competitors are and where they operate. Use the Internet and
advertising sources such as the Yellow Pages to find out about their services, prices and
operating culture. This can give you an overview of their selling points, as well as any areas
Allianz might be able to exploit. Lastly is Allianz always try to have a deep study on each
country’s marketplace which they open in and understand how innovation can add value to
their customers. For more information on analysing country’s marketplace. This innovation
can help Allianz Insurance Company to expand their business worldwide.

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7.0 Reference

1. No name (2008), Allianz sells Dresdner Bank to Commerzbank and will become the
largest shareholder of the new bank, Retrieved from:
https://www.allianz.com/en/investor_relations/announcements/ir_announcements/arch
ive_2008/page10.html/
2. Analysts’ Meeting (2001), Accelerating Allianz, Retrieved from:
https://www.allianz.com/v_1340102888000/media/investor_relations/de/ergebnisse/2
006-2001/praesentationen/0106_analysts__handout_complete_version.pdf
3. Haseeb (2016), Marketing Plan of Allianz, Retrieved from:
http://marketingdawn.com/marketing-plan-of-allianz/
4. Essays, UK. (2013). International Marketing Plan For Allianz Marketing Essay.
Retrieved from https://www.ukessays.com/essays/marketing/international-marketing-
plan-for-allianz-marketing-essay.php?vref=1

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