Should you drop a pin on the centre of a map of Germany, the chances are it would fall right on Gotha. A pretty Thuringian town and vital trading centre on the Via Regia during the Middle Ages, its importance has been sustained throughout the centuries as modern industry, particularly engineering and insurance, chose to call it home. Local businessman Ernst Wilhelm Arnoldi identified the need for a fire protection insurance that was provided by German merchants, for German merchants. As a result, in 1820 Gothaer Feuerversicherungsbank was born.
Fast-forward 2 centuries and the name may have changed to Gothaer Versicherungsbank, with headquarters now located in Cologne, but the spirit in which it was established remains as solid as ever. “Gothaer Versicherungsbank was founded by entrepreneurs, for entrepreneurs, and this is still a very strong part of our company DNA,” explains Gothaer Group CEO Dr Karsten Eichmann.
“Today, we are a very strong brand. We are one of Germany’s largest insurance groups and one of the country’s largest mutual insurance companies,” he says. Its current membership base comprises more than 4 million policy holders across both private and small-to-medium business insurance. At time of writing, the company had announced a projected net profit for 2016 of about €180 million, up 34% on 2015 results.
Karsten was appointed to the role in July 2014 after 10 years at Generali Deutschland, where he was most recently chief sales officer of Generali Versicherung AG and Generali Lebensversicherung AG. His industry experience is extensive. After his PhD in Business Studies and 4 years in consulting, he joined life insurer Allianz Lebensversicherung in Stuttgart in 1993 before becoming the sales and marketing director at the regional insurer Versicherungskammer Bayern.
Preparing for the uncertain future
The scope of his current responsibilities is wide — risk management, controlling, auditing, law, strategic investments and human resources — but arguably his role in developing a company strategy to approach the changing face of insurance in Germany is where his experience has been most needed. “The insurance sector in Germany is currently facing a number of massive challenges,” he explains. “The historically low interest rates, the demographic change, endlessly growing regulatory demands, the increasing competition in a saturated market, as well as digitisation, are putting into question our proven business model and making a new approach necessary.”
He believes Gothaer has the assets to create a sound basis for future success. “We are well diversified with life, health and general insurance products, and we have a good mix of sales channels from tied agents via brokers, banks and cooperations, to online sales,” he says. Another major advantage is Gothaer’s positioning as a mutual insurance company. “This means that we don’t have to strive for quick wins with a view to the next quarterly report. As a mutual, we can act and plan in a more sustainable way with a long-term view. This makes us a reliable partner for our customers, who are also our members, and for our sales and business partners.”
The company cannot rely solely on its heritage as it approaches an uncertain future, however. “The insurance market is going to change drastically within the next 10 years. Therefore, it is no longer sufficient to only pursue once-defined targets,” he cautions.
With this in mind, Karsten introduced his opus, Gothaer 2020, a strategy developed in conjunction with his colleagues on the board as well as managerial-level staff during his first year at the company. As Gothaer prepares for its 200th birthday celebrations in 2020, the approach is strategically timed and heralds a new focus on the revolution that
has shaped the recent decades: digitisation.
“A ‘me first’ thinking never makes a real champion — neither in sports, in business, nor in a country’s economy.”
The digital revolution
He elaborates further: “At the core of Gothaer 2020 is a value orientation that will continue to offer success to our customers. In particular, this involves a market- and consumer-oriented positioning that includes structures which are lean as well as powerful. In this sense, value orientation applies to a stronger emphasis on profitability in product development and portfolio management. But, above all, value orientation depends on the ability to achieve growth in profitable segments. Beyond that, improved efficiency and productivity with streamlined corporate structures certainly reduce our cost base, and therefore further support our value orientation.”
Karsten views digitisation as both the driver and aim of these changes. “After all, the expectations and behaviours of our consumers are changing,” he says. Having recently established a dedicated data management and digital department, overseen by a newly created chief digital officer role, he outlines Gothaer’s manifold approach. “We started our digitisation initiative with a number of so-called ‘fast boats’: smaller projects with the involvement of employees from different sectors which can be put into practice quickly.”
He identifies one example: “Our health insurance app, Gothaer RechnungsApp, enables our customers to upload photographs of medical bills for fast reimbursement and offers savings of both time and postage.” Longer-term projects are also underway to establish digital business areas within the organisation. “Of course, to meet the demands of digitisation,
we are modernising our IT systems,” he explains.
Customer service at its finest
At the beginning of 2017, Gothaer unveiled a new cyber insurance product for its business clients. Named Cyber-Police, it is currently offered to Gothaer business customers with a turnover of at least €5 million. “It’s no secret that cyber attacks are on the increase, as
are the associated costs. In recent years, companies have suffered losses approaching €65 billion,” he says.
“With Cyber-Police, we insure the risk arising from the infringement of IT security, such as damage caused by viruses or Trojans, data loss and theft, or attacks by hackers. Round-the-clock crisis management is also part of the service, from data recovery to legal advice and even crisis PR.” This innovation is just one of a wide portfolio of high-quality products for Gothaer’s private and business customers, which he believes is one of the ways Gothaer stands out in a competitive German insurance market. “We always aim to fulfil our customer’s needs by strictly thinking from their perspective,” he says.
These new technologies have provided the basis for a multichannel approach in sales and customer service that the company is actively pursuing. “Continuing the work that had been started before I joined Gothaer Versicherungsbank is one of my priorities, and the creation of this multichannel is an initiative we have really driven in the last 3 years,” he says.
“In 2016, we reached an important milestone with the implementation of a new CRM that allows anyone in the organisation who has contact with a client to have ready access to all relevant information. As an example, one day a customer may receive a quote over the phone from a member of the Gothaer call centre and the next day decide to visit a Gothaer agency in person to clarify 1 or 2 questions face to face.
The information logged on our CRM system will allow the representative to quickly access all the details of the quotation. Most importantly, however, it ensures that our customers get the same level of service no matter what channel they use to contact us,” he says.“The objective of change is not to transform ourselves into some target ideal,” he emphasises, “but rather to become an organisation that can react quickly and adapt to constant change.”
Collaborations are key to success
Karsten sees a significant value of alliances in this uncharted territory. “In my opinion, close collaborations bear a lot of potential for the future.” Gothaer is already demonstrating the power of unlikely partnerships with the founding of LM+, a health insurance claims-handling provider, which it established together with 3 other German health insurance companies: Barmenia Versicherung, Hallesche Versicherung, and Signal Iduna. “The rationale behind this is that by pooling our interests, we can all increase our market power.
We can then offer our customers a better and faster service and help them recuperate faster,” he explains. Currently specialising in mental health treatment, access to specialised clinics allows patients to “start treatment faster and receive a holistic therapy across all aspects of their care.” The first results are promising, says Karsten.
“I’m absolutely convinced that a key success factor in our — and any — business is the ability to collaborate and find solutions that support the perspective of all involved: from customers to suppliers, sales channels, and even competitors when sharing resources. A ‘me first’ thinking never makes a real champion — neither in sports, in business, nor in a country’s economy.”