Allianz Chief Executive Oliver Bäte has been praised by investors for aggressively remaking Germany’s largest insurance firm. However, insiders complain he doesn’t listen to lower-level managers that know the company best.
That may be about to change, at least according to the CEO himself. After all, admitting your mistakes is the first step to correcting them.
“In the future, I will focus more on paying attention to middle management,”said Mr. Bäte in an exclusive interview with the business weekly WirtschaftsWoche, a sister publication of Handelsblatt.
Keeping the employees on board is critical for the insurance giant. Like many firms, Allianz is in need of a digital overhaul, which could pose the largest challenge in its 125-year history. Rivals from the technology world, known colloquially as “Insurtechs,” are threatening to steal away business.
Critics argue that while Mr. Bäte has often paid lip service to digitization and taken some steps to facilitate the process during his two years as CEO, he does not appear to have strategic direction. Investors who reacted positively to Mr. Bäte during his first year in charge have now soured somewhat on the company’s performance over the last six months.
While Mr. Bäte rejected the suggestion that he doesn’t have clear plan, he admitted in the interview that not everything is telegraphed within the firm. He argued that regional divisions should show initiative and set their own goals rather than have them handed down from central management.
Those who don’t grow will die. Oliver Bäte, Allianz CEO
“We have a clear agenda to tackle the many changes happening out there,” he insisted. “But the days of presenting each unit within the company with a fully-written handbook that tells them how to do their business are over.”
Mr. Bäte also defended his approach more broadly. Some have complained that, aside from an unwillingness to listening to employees, the move to digital products is being made too quickly. However, Mr. Bäte argued that the changes “are not too much, but they are challenging.”
The Allianz CEO has also taken some heat in regards to takeovers. Acquiring other companies has been one of his hallmarks and a recent Handelsblatt story reported that he had been in talks to buy Australian insurer QBE.
Mr. Bäte wouldn’t comment on the QBE reports, but he did insist that acquisitions are necessary – even at the expense of higher profit margins.
“We also have to invest in growth,” Mr Bäte said. “Those who don’t grow will die.”
For Mr. Bäte, that includes the company’s European subsidiary, Allianz Deutschland, which is responsible for about one quarter of the insurer’s revenue. Some employees within the division have complained that they do all the work but reap none of the rewards, with Allianz plugging its profits into the mother ship instead of investing in a European expansion.
“Allianz Deutschland must also be able to invest,” Mr. Bäte said.
Mr. Bäte insists he’s taking steps to listen more to his regional managers. A new committee with the 13 most important regional units is being planned. The group is scheduled to meet four times a year with the company’s top executives in Munich.
This article first appeared in the business weekly WirtschaftsWoche, a sister publication of Handelsblatt. To contact the author: [email protected]