Munich Re’s Marcus Hanrieder on Succesfully Finding His Feet in Malaysia
MUNICH RE HAS BEEN AROUND FOR A LONG TIME, 135 YEARS TO BE EXACT, LEAVING MARCUS WITH SOME PRETTY BIG SHOES TO FILL IN MALAYSIA. HE SITS DOWN WITH KASHINI KRISHNAMURTHY ON HIS MOVE TO ASIA AND HOW HE HAS SUCCESSFULLY ADAPTED TO THE LOCAL CULTURE.
Q Tell us a little about your career thus far and why you chose the insurance industry.
I’ve started working in the insurance industry in 1990 doing a 2 year trainee programme at Munich Re. Much to the liking of my dad who wanted me to get a solid foundation after I had left school and before I explore other career options . I choose Munich Re despite other job offers, from Banks for example, as I found the international exposure fascinating. But what made me finally accept Munich Re’s job offer was the personal touch of the people. I remember I had a job interview with the head of HR. During the 1.5 hours interview we didn’t speak much about insurance and reinsurance. He was more interested in me as a person and my interests and career plans. At the end of the interview, much to my surprise, he offered me seat on the trainee program which was limited to a total of 20 people only. To this day I remember the positive feeling that gave me. This is part of the fascination of Munich Re. Despite being a global company with a work force of more than 45,000 employees, it is still investing a great deal in its people.
The world is changing rapidly and new risks and challenges arise. We see it as our objective to provide answers and tailored solutions to
Q What are your key leadership principles? Have they worked for you in South East Asia?
When I moved to Asia in 2009, I had little experience with the culture. Both from a business as well as people management perspective as I was mainly dealing with European markets and my last role in head office was Head of Casualty business for Middle East and North Africa. Despite a cross cultural training and a book I had read about leadership in an Asian context I believe that leading by example still works best for me. My own behaviour in terms of values and beliefs, as well as respect set the example. I do what I want others to do. Secondly, and this is a bit more tricky is empathy. As mentioned before, I’ve mainly worked in a European environment before and therefore it took me a while to read and correctly interpret peoples expressions. I realized that my team expected me to provide more guidance and direction then I was used to back in Germany. Another important principle for me is to develop my team members. I make sure they can grow and upgrade their competencies, skills, and knowledge. My ultimate goal is that one day they surpass me in their careers and stay with Munich Re either locally, regionally or at one of our many offices around the globe.
Q How does Munich Re stand apart from its competitors in the Malaysian market?
Munich Re has been around for almost 135 years and the experience and knowhow we have collected in managing risks in all parts of the world is, besides its great people and our sound financial background, the biggest asset of Munich Re. In particular in this part of the world, where insurance markets are developing at an extremely fast pace, sharing knowhow and experience with our clients is one of our main value propositions. Secondly, we are still pushing the boundaries of insurance further. The world is changing rapidly and new risks and challenges arise. We see it as our objective to provide answers and tailored solutions to these challenges.
Q Let’s talk about consumer education in Malaysia. Your thoughts?
Since the financial crisis the reputation of all financial services has suffered. Improving this reputation and lowering the insurance gap, especially in the emerging markets of Asia are one of the main challenges for the future. This includes to explain insurance, create trust, and show how it can enhance the standard of living. For this we need to develop and market tailor made solutions for each customer segment and find the right sales channels. Going forward, consumers will change their buying behaviour and will search and buy more via the internet like we have seen in other industries. The insurance industry will need to engage with its customers to understand their needs, gain trust and to provide products which fit the requirements of the customers. By the way, Munich Re went through the financial crisis extremely strong, proving the stable basis of our integrated risk management.
Q What is Munich Insurance doing to bridge the gap between insurer and potential consumers?
We constantly research emerging and changing risks, and develop new innovative insurance solutions for example for renewable energies such as solar parks or wind farms. We develop alternative coverage concepts, like insuring financial losses resulting from volcano eruptions/ash clouds or reputational risks, weather risk protection, commercial motor solutions and more. Beyond this we engage with other stakeholders, like governments, to explore areas of collaboration. They are becoming more and more aware of the risks that a natural catastrophe event could damage their sovereign rating if they are not able to fund it post catastrophe. The digitalisation trend continues and we will see a need to develop products for both businesses as well as private consumers to protect them adequately against threats the increasing use of the internet in our daily life. Munich Re is at the forefront in assisting our clients in developing such cyber risk protection products.
Q Penetration rate for consumers is still far off from the goal set by the government. Who shares the blame?
The whole industry needs to utilise the opportunities of currently untapped client segments. For example: every year we are experiencing significant floods here in Malaysia and in the region and still the economic losses are far greater than the damages to insurers – an issue all over the region. 34% of all weather related natural catastrophes occurred in APAC in 2013, 44% of all economic losses happened in this region, but only 9% of all insured losses come from here. On top of this 84% of all fatalities happened here, last year mostly due to typhoon Haiyan in the Philippines. These sobering statistics highlight the urgent need for more natural catastrophe coverage in Asia Pacific. On the primary side we need to develop products which are easy to administer, realistic in price and with a quick and reliable payment system after losses. It is the positive experience that makes people come back and buy more. Reinsurers can help with their knowhow and expertise.
Q What is Munich Re’s outlook on the global economy, emerging markets and Malaysia?
Malaysia’s GDP is expected to expand more than 4% through continuing infrastructure spending by the government but also increasing local consumer spending. Therefore, the Malaysian insurance industry should continue to experience growth in the years to come in particular in the private lines segments.
Q What is Munich Re’s strategy for grabbing the attention of the Gen Y population?
With the internet, the traditional distribution of insurance has already started to change. In this part of the world, the traditional way via agents is still predominant. The industry however, has to invest in alternative distribution channels and products to react on the changing buying behaviours of the Gen Y population. But I would not limit this to the segment of the digital natives. Also the so called digital migrants i.e. people born before the existence of digital technology will partly change their buying behaviour and have to be considered too. I have experienced the people in this part of the world to be very tech savvy and I am positive that we will see many changes in is field in the not too distant future. New developments in ‘pay as you drive’ policies in motor insurance using telematics technologies will be introduced as soon as the motor market has been fully liberalized.
Q What are your plans for the year? Any news/highlights/produ cts to share?
To stay relevant for my clients. Our aim has been and will be to provide our clients with a good product at a good price and to value and maintain relationships which are particularly important here in Asia. The upcoming market liberalisation in Malaysia in 2016 will change the market and its existing business model to quite some extend. With our global experience and local market knowledge we want to be the preferred partner for our clients when it comes to financial reinsurance solutions but also in terms of managing the other challenges which lie ahead of us.
Q How is it looking for the industry in general? Any insight into the next 10 years?
Fire and motor tariffs are expected to be liberalized as from 2016. This will increase the pressure for the industry to become more efficient and innovative. Last but not least, the ASEAN Economic Community (AEC) and a further enhancement of the insurance regulation can be expected in the next few years. Solvency II will be finally implemented in Europe in 2016 and I expect regulators in this region to follow this example. Interesting times lie ahead of all of us and I’m sure there will be plenty of chances and not many dull moments to come.
Our aim has been and will be to provide our
clients with a good product at a good price and to value and maintain relationships which are particularly important
here in Asia.