Allianz to Cut Annual Sales Costs, Invest in Digitization in Germany

By Ulrike Dauer

FRANKFURT--Allianz SE (ALV.XE) on Wednesday announced plans to cut annual sales costs and to invest in digitizing its German operations, which are the group's biggest, as the sector gears up for fresh competition from non-traditional players such as Google Inc.(GOOGL).

Europe's largest insurer by market value plans to reduce annual sales cost in Germany by 40 million euros ($44.37 million) from Jan. 1, 2016, shrinking its number of branches to 60 from the current 88. It will also cut 360 jobs in Germany, mainly in administration and management, equivalent to 1% of the 30,000 people it employs in its home country.

Allianz said it plans to achieve the job reduction without compulsory redundancies and has started talks with labor representatives. In Germany, measures such as early retirement, part-time work and natural attrition are used to avoid compulsory redundancies.

The cuts won't affect the insurer's 8,400 insurance agents in Germany who will be reassigned to the remaining branches, said a company spokesman.

Allianz also announced investment of between EUR80 million and EUR100 million over the next three years in digitizing its German insurance agency business. For instance, customers will be able to contact their agents through social media such as Facebook, through video and make online appointments.

Insurers are under pressure to update their traditional people's business to the digital age, as online sites allow better comparison of insurance rates and with new competition emerging from nontraditional players. Google recently entered the e-commerce business in auto insurance in the U.K and U.S., offering "Google Compare For Auto Insurance" for consumers searching for car insurance on Google's search engine.

-Write to Ulrike Dauer at [e-mail]

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