ERGO Insurance is in a period of transformation to align its Singapore business with the strategies of the international ERGO Group. We caught up with Mr Karl-Heinz Jung, CEO of ERGO Insurance since August 2017, to learn about the insurer’s activities and ambitions in the city state.
ERGO Group of Germany, the primary insurance arm of Munich Re which entered the Singapore market in 2014 when it acquired local P&C insurer SHC Insurance Pte Ltd, is now focusing to serve SMEs as a core clientele.
It is also streamlining its processes to serve customers better and ultimately increase business volume, Mr Karl-Heinz Jung said.
The company has also recently re-organised its underwriting and distribution operations to create functions which are separate, but which work together to bring the right product to clients. “What’s new, but doesn’t come across so loudly, is that we have focused the whole organisation towards the customer,” said Mr Jung.
A major project for this entire year is replacing the insurer’s core IT system to improve efficiency. “We need to conduct our business much faster as today’s customer expects a quick response and immediate product delivery in the form of a policy, and of course a very speedy claims payment,” he said.
Citing the example of the company’s recently launched TravelManager App, a corporate digital offering for Singapore-based businesses and their travelling employees, he added: “So we’re thinking more in these ways going forward—not just the product, but the way you can give customers access to the product.”
New business lines
ERGO Insurance is also diversifying into new products, including cargo, professional indemnity, travel and personal accident, property and motor. Motor has been expanded from commercial and now includes retail policies. It is currently the largest business line for the unit.
While Mr Jung noted that the Singapore market still sees gaps in terrorism and cyber cover, he said it is very difficult to assess the exposure in these two lines and calculate a technical price. In addition, the risk accumulation is hard to control.
“Hackers target companies such as banks, insurers, and SMEs (which are our clients) that have sensitive data. If there’s a targeted attack on all Singapore SMEs, the accumulation can be very severe. So we need to be very careful with what we can offer,” said Mr Jung, who added that it is too early for ERGO Insurance to promise a cyber offering.
General insurance agents
While ERGO Insurance is currently reaching out to tap on more brokers, he said that it has been traditionally a strong supporter of general insurance agents as an effective SME distribution channel, in particular agents with good and solid relationships with their customers.
“There are some agents who have large portfolios that can compare with a broker’s portfolio. The most important thing is still the personal relationship between the agent or the broker and the final customers,” he said.
Mr Jung also shared that ERGO Insurance , while relatively new in Singapore, enjoys support – in the form of guidance, IT, products and talent— from HDFC ERGO in India, the ERGO Group’s largest and most successful operation in Asia.
The Group’s strategy is to have the leading operation in an area act as the de facto guide for smaller entities in the different markets rather than using a formal regional HQ – therefore, the strong support from HDFC ERGO. Meanwhile, ERGO Insurance also enjoys the support of Munich Re, which it engages regularly to discuss potential collaborations and market observations, besides reinsurance coverage.
More open markets?
Mr Jung is optimistic about the growth potential for the Singapore and Asia markets and is heartened by the business-driven, fair and predictable policies of the Monetary Authority of Singapore and its support of FinTech.
What he thinks can be improved on in the region is the openness of Asia’s markets. Citing the example of Europe’s common market where insurers can operate with just one licence, he expressed his wish for Asia’s regulators:
“Here you are restricted to Singapore. You need another license for Malaysia, and another for Indonesia – and that makes it very complicated. So if you have an open market, it would be good. Of course it will increase competition, but in the end, the customer benefits.” A