More success: The VIG 25 strategic programme
The VIG 25 strategic programme sets down its goals for 2025. More efficiency, more customer proximity and more value added prepare the ground for more sustainable success.
VIG 25 – simply explained
The VIG 25 strategic programme was developed for the period from 2021 to 2025. Current trends and developments and their effects on the insurance industry have led to clear requirements for the Group: further strengthening sustainability as an integral part and foundation of the business model, promoting greater efficiency and productivity supported by digitalisation, developing new ways to approach and retain customers and promoting a general understanding of risk provisions. The business model is therefore being optimised, enhanced and expanded through targeted activities in three strategic focus areas. These will consolidate VIG’s sustainable success and help achieve its strategic objectives. VIG launched a continuing programme during the reporting period to achieve the requirement of further strengthening sustainability as an integral part of the business model. In collaboration with various experts from VIG Holding and all Group company CEOs and in consideration of special local requirements, we are drawing up a Group-wide sustainability programme in conjunction with VIG 25 that sets out objectives and measures. We aim to finalise this sustainability programme in 2023.
A world undergoing radical change
An analysis of the most important trends and developments and their effects on the insurance industry was the starting point for the new strategic programme.
Trends and developments
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Evolution instead of revolution
New technical solutions and digital developments related to the insurance business will not unfold their effects immediately, but continuously. New players, such as InsurTechs, are driving innovation and improving business models in the established insurance industry in the course of cooperations. The VIG Group must therefore continue and further intensify its efforts to achieve a digital transformation across the entire Group and continue its systematic search for new ideas and supporting technologies – not only in terms of their impact on our business model, but also on our customers.
Low real interest rate
The low level of real interest rates – driven by high inflation rates – is likely to continue over the coming years, with pressure building on the financial position as a result of the increase in costs, particularly with regard to insurance payouts. The VIG Group must become even more efficient and productive in order to counteract this.
Increasing regulations and interest group demands
The insurance sector is already one of the most strictly regulated and supervised sectors in the EU. Many new regulations are coming. The new EU taxonomy for sustainable investments is just one example. Interest groups and opinion makers are also increasing their efforts to draw public attention to their concerns and to add them to the agenda, particularly among finance companies.
Customer access is key
Digitalisation has changed customer expectations and behaviour. Millennials and Generation Z in particular, i.e. everyone born since 1980, prefer a high level of flexibility and custom-tailored products that can be accessed any time and anywhere. Insurance companies have to better understand the needs of younger generations and increasingly implement hybrid forms of distribution that combine personal and digital communication. At the same time, however, in terms of socio-demographic developments, the aging population – a segment that continues to grow – must not be neglected.
Erosion of insurance as a stand-alone product
Insurance solutions are increasingly becoming an integral part of other products or services, especially in the area of non-life insurance. As a result, insurance is disappearing as a separate product in some areas. For example, credit cards may automatically include travel insurance coverage or cars may be purchased with insurance coverage already in place.
Digital platforms and ecosystems
New ways to approach customers are becoming increasingly important. Platforms, generally operated by a non-insurance provider, are one example. Insurance companies can benefit from the existing customer base of such platforms and offer products and solutions that provide added value. Ecosystems, in turn, offer customers a range of services related to a certain basic need, such as housing or healthcare. The VIG Group wants to approach and retain customers by offering attractive solutions for such needs, while remaining visible under its own brand. Cooperations with companies from other sectors are becoming more important.
Latent demand for risk protection
Consumers and companies often do not recognise their needs for risk protection and insurance solutions. In the case of long-term products, such as life and health insurance, this can have particularly negative consequences for customers. Insurance companies must therefore help people better understand the importance of risk provisions and possible risk management solutions, so that they recognise their individual needs for provisions and obtain timely coverage.
The requirements
The analysis revealed a number of basic requirements that the Group must satisfy in order to successfully achieve sustainable development.
- Further strengthening sustainability as an integral part and foundation of the business model
- Further increasing the efficiency and productivity of the operating business thereby continuing and intensifying the associated digital transformation
- Developing new ways to approach and retain customers in order to respond to changing consumer expectations and behaviours
- Promoting consumer understanding of the importance of risk provisions
Strategic focus areas in three horizons
In response to the trends and requirements, the VIG Group will optimise, enhance and expand its business model through targeted activities in three strategic focus areas and thereby ensuring more efficiency, more customer proximity and more value added.
More efficiency
Optimise the business model by increasing productivity and efficiency
- Process simplification and automation
- Exchange and implement best practice examples
- Further optimise underwriting and pricing
More customer proximity
Enhance the business model with new ways to approach customers and by enriching the product range with services that provide additional value for customers
- Increase brand visibility and the attractiveness of products
- Increased use of a hybrid distribution approach that combines personal and digital contact
More value added
Expand the business model and value chain beyond the insurance business
- Focus on asset management and the pension fund business
- Establish ecosystems
- Promote awareness of precaution and risk protection