Launched in late 1997, Generali Global is going from strength to strength. Global, as it is becoming known, recently took the unprecedented step of moving a significant element of its head office underwriting functionality away from its historic home in Trieste to London, the hub of the international insurance world. David Dunnett explains.
As the 20th century draws to a close, scaremongers and optimists alike are speculating as to whether the electronics, which control so much in our world, will take us smoothly into the twenty first century, and if not, where the crises will occur. Amid this hyperbole, the Lion of Venice is stirring. Generali, a creation of the early nineteenth century, which owes its formation to the need to provide solutions to the commercial risks of that era, has now created the means by which it will provide solutions to the commercial and industrial risks of the next.
That means is called Generali Global.
Since its beginnings in the 19th century but principally for the greater part of the last 50 years, Generali has grown and developed into one of the world's largest insurance groups through a mix of organic growth and acquisitions. Initially this growth was achieved at the expense of a single unified set of corporate objectives, although there are those who would argue that those large groups who shackled themselves to a single corporate goal have come to rue the day. That deficiency, if indeed it was one, has now been largely remedied, allowing the company to fulfil the predictions of its present managing director. Speaking to analysts in Milan earlier this year, Gianfranco Gutty set out his aims for a restructuring process which would involve the centralisation of many back office operations and the merging of various operating companies. Substantial cost savings would be achieved as well as greater efficiencies. He was looking to see a return on equity in 1999 of 12.5% compared with 11.3% in 1998.
Consistent with the objective of greater efficiency is the concept and the reality of Generali Global. Launched in November 1997, Global, as it is becoming known, provides a single channel for the major multinational client and his broker. By bringing the traditionally distinct disciplines of casualty, property and employee benefits together into a single administration and providing a simplified means to include other speciality areas such as marine, energy, aviation, space, construction and engineering, Generali has adopted what it describes as a “holistic” approach. That approach recognises that different skill sets are required by individual underwriters but that their overall approach to providing insurance solutions needs to be co-ordinated and melded if the client is to be given a global solution.
The Global concept is global in a geographical sense too. The eight gateway regional offices around the world, London, Frankfurt, Paris, Madrid, New York, Miami, Tokyo and Hong Kong, are so placed as to be able to channel the requirements of their regional clients into the network and also to provide “local” service for other Global clients. Head office underwriting operations for Generali Global clients and their advisers have been separated from the head office operations for non Global business in order to ensure that the Global culture exists throughout the network and is capable of being delivered irrespective of where the client is located or the channel by which the connection to Generali Global was established.
The Generali Global regional offices have been established in locations that will allow the delivery of a locally based service. While in most cases the locations coincide with existing Generali centres, and can co-ordinate effectively with those centres, their line of communication is directly into Generali Global's head office. As a bold part of the strategy that established Generali Global, the company has taken the unprecedented step of moving a significant element of its head office underwriting functionality away from its historic home in Trieste.
The prestigious building in Fenchurch Street, London, which Generali's UK branch has occupied for over 20 years, has been refurbished to house the Generali Global head office as well as the Generali Global London regional office. Nearly 20 additional technical specialists at all levels have been recruited, principally from Generali's head office but also from other parts of the world and from the London market. Their presence guarantees that the levels of expertise required to fulfil the promise of Generali Global are constantly accessible to the eight regional offices. Most significant is the ease with which the regional offices will have access to the full underwriting capacity of the Generali Group, a development which has been quietly put together as part of the harmonisation of inter company trading within the group.
The London management team is headed by Benito Pagnanelli, Generali Global's chief executive. He combines the role with that of deputy general manager responsible for all international non-life operations of the parent company, Assicurazioni Generali SpA., at head office in Trieste. Speaking recently about the challenges of providing cross border solutions to the insurance problems faced by international companies, he was dismissive of servicing carried out through network services that were not fully owned and controlled. He emphasised that Generali, by the use of its Global network, would overcome the difficulties in delivering at local level the service standards which were demanded at a global level.
“Frequently in the past, clients have been let down by insurers who rely upon the services of unrelated organisations in a foreign territory to provide client servicing at a local level. The absence of any real interest on the part of these organisations is often all too evident in the paucity of service provided. Generali Global operates through its own offices thereby eliminating the risk of poor or inadequate service.”
It is clear that Generali has recognised that such service standards are a most critical means by which they will be able to add value for the client. A quick review of some of the services that will be available to clients of Generali Global demonstrates very clearly the breadth and depth of their experience, and how it is being harnessed to the Global concept. These range from advice and assistance in the establishment of a captive reinsurance company in Luxembourg to the provision of relocation services for expatriate employees. The former service is available through a Luxembourg registered joint venture by Generali and Banca Commerciale Italiana, (GENSEB), while Generali's well known subsidiary, Europ Assistance are providers of the relocation service and other assistance services to Generali Global clients.
Mr Pagnanelli is no stranger to the pioneering role that Generali Global has provided him. In the 1970s he was actively involved in the development of the very successful aviation department at Generali's head office in Trieste from which evolved the Space Insurance Department, a unit which is regarded as pre-eminent in that field. Mr Pagnanelli himself was nominated chairman of the Space Risks Study Group in 1979 and was elected president of the International Union of Aviation Insurers in 1994. He has seen the opportunity that Generali Global offers the markets and has established the headquarters of Global in London, so moving the centre of operations to the hub of the international insurance world. It is not surprising that in bringing Generali Global's decision making into London he has also brought the space department to a UK base. Generali has demonstrated by these moves, just how committed the company is towards playing a leading role in the international marketplace.
Mr Pagnanelli is optimistic that the writing of major lead lines by Generali Global's head office in London will have a positive knock on effect for the London market. “Our group capacity is enormous but prudent use of that capacity is sure to create opportunities for reinsurance to be placed into London, business which might well have gone elsewhere but for the presence of Global in London.”
The proof of the soundness of Generali Global's strategy will lie in their ability to provide the global solutions that their clients' businesses demand. In the planning and creation of Generali Global the company has paid particular attention to the capacity they can provide and to making sure that there are comprehensive loss procedures in place to streamline the handling of claims. But they have not stopped there. Great emphasis has been placed on making sure that pricing, paperwork and risk consultancy are centralised and co-ordinated. The levels of technical and underwriting skills assembled to drive Generali Global is impressive, as is its security. Generali has an AA rating from Standard & Poor's.
It is clear that Generali Global means business, and that global business means Generali Global.
David Dunnett, head of PR and communications, at Generali Global in London.