Vienna Insurance Group success factors
A clear strategy for success
Corporate strategy. The members of the Managing Board explain the main principles of VIG’s corporate strategy – and how it sets VIG apart from its competitors.
“Think globally – act locally. For the benefit of our customers.”
As a responsibly acting insurance company, VIG relieves customers of their main day-to-day concerns and risks. These needs vary widely from region to region due to differences in culture, experience and economic circumstances. It would be presumptuous to assume we could accurately assess all these regional differences from our headquarters in the Vienna Ringturm building. This is why we rely on local entrepreneurship, decentralised organisational structures and short decision-making channels. Our local management and employees know their customers’ needs, and can ensure the best possible product design and distribution based on local circumstances. In addition, binding Group guidelines for areas such as risk management, reinsurance and investments ensure that the VIG’s corporate principles and values are observed.
“We remain true to our conservative investment strategy.”
VIG managed EUR 31.1 billion in investments at the end of 2014 that were entrusted with us by customers and shareholders. We are greatly aware of the responsibility this places on us every time we make an investment decision. This is also shown by the structure of investments: 81.0% represent investments in fixed-interest securities and loans and around 6.3% in real estate. Only 3.6% is invested in equities (including the shares in funds).
Individual investment guidelines apply to each VIG company and are monitored regularly. In addition to ensuring the existence of adequate liquidity for satisfying insurance claims, special importance is placed on diversifying the investment portfolio and the return that can be achieved given the overall risk exposure. Based on these factors, we reduced term money investments in 2014, while increasing holdings of government and corporate bonds. Although the current low level of interest rates also presents challenges for VIG, our profit-oriented underwriting policy and the underwriting profits it generates, together with our long-term asset and liability management, will also enable us to overcome this period of low interest rates.
“Our multi-brand policy has proven its value.”
Unlike many of our competitors, there is more than one VIG company and brand in most markets. Thanks to this consciously chosen strategy, VIG companies can custom design a market presence that appeals to their own particular target groups. Each Group company uses its local brand as its first name, followed by the umbrella brand Vienna Insurance Group as its family name. This allows well-established brands that already enjoy good customer recognition to be retained, and it strengthens the regional identity and commitment of local employees.
At the same time, adding Vienna Insurance Group to the name proclaims the Group’s international stature and many years of experience, giving customers additional security. This gives us the best of both worlds.
“Using a variety of different distribution channels ensures customer proximity.”
Many roads lead to Rome – and to our customers as well. VIG therefore relies on a diversified distribution strategy that provides access to many customer groups while taking their individual preferences into account at the same time. In addition to the Group’s own field staff, independent brokers and agents, multi-level marketing, direct sales and banks are also used. The way these different channels are combined depends on the particular characteristics and legal requirements of each market. Bank distribution has become more important in many of our markets in the last few years. VIG recognised this trend at an early stage, and it now benefits from a partnership it established in 2008 with the Erste Group, a leading banking group in Austria and the CEE region. Erste Group companies distribute Vienna Insurance Group products, and in return VIG offers, in line with its comprehensive advice, selected Erste Group banking products to its customers. This creates a win-win-win situation.
Main principles for achieving VIG’s goals
Basic principles. The main objectives of VIG’s corporate strategy are to consolidate its leading market position in Austria and take advantage of the growth potential offered by the CEE region. VIG concentrates on its core business, namely providing insurance solutions and advisory services that best address the different security and provision needs of the people in its markets. As a progressive, risk-conscious insurer, it often assumes a pioneer role and sets new standards when doing so. The management principles shown in the chart form the basis for all major corporate decisions. The comments by the Managing Board members in the top part of this page explain specifically how they are applied.
Clear strategy focusing on Austria and the CEE region
