Allianz has embarked on an ambitious global platform transformation, implementing a new business model and technology platform across the world. In this episode of McKinsey on Insurance, McKinsey’s Matthias Redlich and Konstanze Reinecke speak with Veit Stutz, Allianz’s former global head of business transformation and the current CEO of Allianz Spain, about how he approached this feat, how he aligned operating entities globally, and how the company plans to scale further. An edited transcript of their conversation follows.
Konstanze Reinecke: You’re listening to the McKinsey on Insurance podcast. In this series, we feature experts who discuss trends, disruptions, and strategies that are reshaping the insurance industry as we know it today. My name is Konstanze Reinecke, and I’m a partner with McKinsey in Cologne. I’m here with my colleague Matthias Redlich, who is an associate partner at McKinsey in Frankfurt. Today, we are excited to share a conversation with Veit Stutz, former global head of business transformation at Allianz and current CEO of Allianz Spain.
Veit, you led the Allianz Customer Model [ACM] transformation at Allianz, which is the largest global transformation initiative at the group. Tell us a bit about it and why you initiated this transformation.
Veit Stutz: Allianz Customer Model is our attempt to create a global, harmonized business model for the Allianz Group. We recognized that when you look across Europe—or even South America and Asia—insurance is not so different, especially in our retail business with motor or household insurances. But in all our entities, we were delivering it differently—with a different look and feel, packaging, and handling, for instance. It was all unique, and that created a lot of complexity and cost.
When you look at other industries and top companies in the world, they go a different route. They have one model and one product globally—be it Coca-Cola or Netflix or Apple, they all have a restricted number of options. And they’re offered everywhere with the same look and feel, in the same style. That’s something we wanted to realize as well. So three years ago, we started the Allianz Customer Model to make our offerings consistent across all operating entities [OEs].
Matthias Redlich: You make this sound quite simple, but the devil is in the details. The basic structure of products and processes is the same, but then there are local-specific requirements and regulations to consider, which make this a bit more complicated to accomplish. How did you drive this process and define a global blueprint for all your businesses?
Veit Stutz: You’re right. It sounds easy, but it’s super complex. It’s challenging because we not only harmonized products, processes, and platforms, but we also changed how we run businesses and tapped into local kingdoms.
To be successful, we decided to go for a more collaborative approach rather than enforcing this new business model from the headquarters down. To build the different modules—from products to processes to operations, claims, and sales—we had experts in OEs in each country be responsible for designing a specific module. Then experts in other countries collaborated on these separate parts to ensure that we were truly building a global business model. We then put everything together, aggregating each module and putting them into blueprints. Ultimately, it was built by the people in each OE and not by the head office in Munich. That was one of the distinctive points that allowed us to be successful.
To be successful, we decided to go for a more collaborative approach rather than enforcing this new business model from the headquarters down.Veit Stutz
Matthias Redlich: So this was essentially emphasizing cocreation to drive acceptance and adoption.
Konstanze Reinecke: Parallel to ACM, you are also building and rolling out the Business Master Platform [BMP], which essentially is an integrated business and technology platform that implements the ACM. How did the idea of building a global insurance platform for Allianz emerge?
Veit Stutz: The ACM program turned out to be so prominent and successful that we decided to combine it with our IT master platform and build the Business Master Platform, making IT and the business model merge. The first task was to make sure that we had a common business model, which was the Allianz Customer Model. Then we had to make sure that what we developed is supported and carried by all our companies across the globe. We reserved about 12 to 18 months to align this business model with hundreds of experts around the world. Now we have rolled this out to more than 30 countries, which covers our retail portfolio across the globe.
There are a lot of examples where we significantly reduced the complexity and harmonized our products as well as our processes, interfaces, and more. We have several examples from countries like Italy or Turkey where we reduced the number of products on the shelf to just our master product—from 777 products to one in Italy and from 450 to one in Turkey. The ultimate art, however, is bringing everything onto one platform. Each OE had several platforms, which were costly to maintain. To leverage our strengths as a global player, we decided that we should not only have one master product with one set of processes but also have it run on one platform. That’s how the BMP initiative emerged.
So far, we have rolled BMP out in Spain, Australia, and partially in Italy, and there’s more to come in France, Germany, and everywhere else.
Matthias Redlich: That’s fascinating. You’re driving a global business transformation and a massive technology transformation at the same time. What are the main benefits of the global platform approach, and what’s the value proposition?
Veit Stutz: Well, first of all, it’s not me. I’m the face or the voice of this program, but it’s developed and executed by my incredible colleagues who are so knowledgeable and committed to creating this for the best of the company. They’ve worked so hard.
To answer your question, we needed to make sure that we could measure success on several levels. Is it easier to interact with us from a customer’s point of view? Is it easier to work with this new system from an employee point of view? And is that success reflected in the numbers? If customers are satisfied with the new interface and the new look and feel, and employees enjoy working with the new systems, but we don’t generate a single dollar more, then we probably missed out on something. It’s important that this pays off. And it does.
The first products that went live that were created in ACM have two or three times the volume of sales that we had with the previous products. It’s an incredible success in terms of satisfaction, and the products have had a very strong performance so far. We are moving in the right direction, but it’s still early on, and there’s still a lot to do. It’s important that every stakeholder benefits—the customers, the employees, and the company.
Matthias Redlich: Let’s talk about the actual implementation of the platform. How did you practically start building and rolling out the global platform? What challenges did you face? Was there anything you expected to go completely differently?
Veit Stutz: We used what we learned in Spain to build the foundation of the business model. In Spain, our colleagues initiated a couple of years ago a simplicity exercise that had the same logic as our ACM business model. Even if it was a fraction of what we have today, it gave us a good starting point. It was also important that we had the best people involved, and we made sure to have a common presence in the Allianz board meetings. We built a special acceleration board with our group CEO, our group CFO, the COO, the chief business transformation officer, and myself. We gave regular updates outside of the normal organizational structures and the governance structures to make sure that whenever there is noise or uncertainty we could clear it immediately, and to make sure that we have the backing to drive this through to completion.
Even in these meetings with board members, we brought in the CEOs from each country to discuss what they’re experiencing now with ACM. When we moved to the platform, we were not alone in the driver’s seat anymore. We shared the driver’s seat with our technology team, Allianz Technology, which is building what we designed on the business side and then merging it with the IT side.
Now we need to scale what we built in a few countries to all the other OEs faster in order to make sure that we deliver this program to the Allianz community within a digestible time frame: three to five years, not ten years. We need to make sure that on both sides—the business and the IT side—we draw the right conclusions to help us accelerate.
Matthias Redlich: Do you have a specific approach to rolling out the platform at scale? I think you mentioned the goal is to roll it out in more than 30 markets. It’s going to be a pretty big implementation from the business side as well as the technology side.
Veit Stutz: You need to be patient at the beginning and take the time to execute the proof of concept in each country. Then you need to be resilient to roll it out because there are always specific local challenges. You need to make sure that you absorb challenges as a management team, let the teams work, and make sure that you can fix the problems along the way. Make sure that you communicate well to everyone so they understand what is working and what is not working. Transparently address the things that are not working and continue to deliver.
You need to make sure that you absorb challenges as a management team, let the teams work, and make sure that you can fix the problems along the way.Veit Stutz
Matthias Redlich: For other leaders who might embark on a similar transformation in their organizations: looking back, what have been the most important success factors?
Veit Stutz: To summarize, go with a collaborative approach. Having the CEOs of our biggest entities at the table and engaging our board of management was certainly the decisive starting point. Our CEO gave us a lot of recommendations that we used to amend the program along the way. You need to be flexible to react and amend because on a journey like this, you will not end as you started. There’s continuous change in the way you drive this forward.
Make sure that you communicate and engage with your company so that people understand what is going on. We invested significantly in making seminars and having constant communication with the Allianz community to take everyone with us and show the results. If your strategy is just a promise for the future, you will lose the support along the way. You need to make sure that you can also show the results. If, for example, the CFO confirms that the initiative has created significant value of more than €1 billion in the first three years, it has a right to exist and to continue.
Matthias Redlich: Looking into the future, what are the next big milestones you’re hoping to achieve with the Business Master Platform and the Allianz Customer Model transformation?
Veit Stutz: Ultimately, success depends on how much of our business is on the new platform. It’s great that we’ve launched it in countries like Spain and Australia, and we’re on our way to launch it in France, Germany, and Italy. But we need to get the rest of the business on the platform, and we need to do it fast. This year, the target is to have 13 more lines of businesses on the business master platform in five countries. If we achieve this, then we have enough business on the new platform that we can measure its success, show the superiority of the platform, and use what we learn to scale it faster.
Matthias Redlich: Are there any new features or innovative technologies that you intend to roll out as well?
Veit Stutz: That’s challenging because we have not finished implementing the BMP, and if you start diluting what you’re trying to implement because of new fancy features, you might fail to deliver the big thing for a fancy small thing. And that’s why we try to prioritize the delivery of the BMP and park some of the great innovative ideas that we can implement along the way. First deliver, and then upgrade. That’s how we approached ACM and the BMP. We delivered motor first, for example, then household. We didn’t deliver all products at the same time, because that would be too complicated.
Konstanze Reinecke: Thank you very much, Veit, for sharing your experience and expertise with us and the listeners. And thank you to the audience for listening to McKinsey on Insurance. Don’t forget to subscribe to McKinsey on Insurance wherever you get your podcasts. Thank you.