Ergo seeks growth in Austrian, Dutch and French industrial insurance markets

France is another market that German primary insurer Ergo seeks to enter in the near future. So far, Ergo is only active abroad in private consumer lines.

“We want to be represented in these markets with all lines relevant for corporate clients,” Christian Diedrich, Ergo Versicherung Chief Executive Officer, told Commercial Risk Europe.

Mr Diedrich is responsible for Ergo’s p/c and corporate insurance business. The German Financial Supervisory Authority, Bafin, has already granted the necessary permission for the expansion.

hideSo far, the insurer has limited itself to German corporate clients. But as the market stagnates, Ergo wants to target neighbouring countries for growth.

The target groups are medium-sized Dutch and Austrian corporate clients, that want to cover national risks. In France, the main target group are jewellers.

International risks as well as large industrial risks remain the responsibility of Ergo International, the company’s department for heavy business.

Although Ergo is a subsidiary of Munich Re, which has its own industrial business via several subsidiaries, Mr Diedrich does not believe the internal company competition is a problem.

“Both companies write business without overlapping relating to target markets and target clients,” he said.

At the same time, Ergo competes with other insurance companies, which are clients of Munich Re. “This combination exists in Germany as well,” Mr Diedrich said.

All target markets do not lack insurance companies. “We are entering a highly competitive market,” Mr Diedrich conceded.

Nevertheless he believes Ergo can succeed partly by offering special services. “Many industrial insurers have organised the claims handling via loss adjusters or lawyers. We are handling the claims ourselves,” he said.

In addition, when it comes to risk management services for clients, Ergo has more expertise than the competitors, he said. “Many brokers encourage us to enter these markets because of our expertise.”

For more than a year now, Ergo has been testing the potential for expansion to new markets by offering companies policies from its Düsseldorf-based headquarters without the backup of a local branch office.

This has to change now, Mr Diedrich believes. “Particularly in Austria, you gain business only by being present in the country,” he noted.

By 2019, Mr Diedrich wants to achieve a premium volume of €100m in all three countries. Currently, the premium volume amounts to €11m in Austria and the Netherlands.

In recent years, Ergo has grown its industrial insurance business substantially by expanding its share of niche businesses.

It began with a return to the marine hull market and offers kidnap and ransom cover against piracy in a separate policy. “We have grown slightly more than the market in industrial insurance,” Mr Diedrich said. “In 2011, we had premium income of around €800m in industrial and commercial business,” he added.

Marine hull in Germany is a niche worth only around €95m in premium income. With a premium income of €17m in hull insurance and about €20m for piracy cover the company can count itself as one of the larger providers in this market.