Column on competitive position

Germany’s finance silicon valley

The insurance industry is changing rapidly – not least through the emergence of the fin- and insurtech sectors. This is causing German cities to compete for the attention of entrepreneurs and their start-up ideas. That is a good thing, as insurers are being challenged more than ever to make the most of the opportunities inherent in 1 and 0. The column of Jörg von Fürstenwerth, Chairman of the GDV Management Board.

A number of German cities are putting themselves forward: Munich and Cologne have set out their stall as insurtech-friendly locations, whereas Frankfurt is mainly targeting fintech businesses, which aim to revolutionise the banking industry. There is also Berlin: the capital city has less to offer the financial sector, however it is the undisputed centre for digital start-ups in Germany. Wherever we go, all we hear is talk about a German silicon valley of the finance industry.

European fintech strategy with uniform competitive conditions
That is just as well as it is becoming more of a priority for insurers to make the most of the opportunities presented by 1 and 0. If the established players don’t step up, new and agile competitors will. Even the EU Commission is working on a European strategy to promote the fintech sector, with a focus on such buzzwords as big data, artificial intelligence or blockchain – and consumer protection of course. The German Insurance Association (GDV) has contributed to this public consultation by the EU Commission and is campaigning for a European fintech strategy with uniform competitive conditions.

Many of the questions being discussed in restricted circles affect our industry as a whole: digitization will change work as we know it. That doesn’t mean that computers are bound to replace people, however. Many jobs will change – and workers will adapt accordingly. Training is becoming instrumental to the success of both individual employees and companies. The insurance industry supports this change and is acquiring new external inputs – through takeovers, incubators, equity stakes and the investment of venture capital.

Insurers are well positioned to harness the shift to digitization. There are no indications that insurtech companies are replacing established insurers. On the contrary, traditional insurers have strengths and unique selling points that new competitors will find hard to emulate: comprehensive knowledge of the entire value chain, experience in managing complex regulatory requirements and, of course, financial muscle.

Berlin – fintech capital of Europe? Have your say!
We must remain vigilant and flexible: something is afoot in many German cities – with support from insurers. In our GDV magazine “Positionen” we recently discussed the question: “Will Berlin profit from Brexit – and replace London as Europe’s fintech capital?” Chistopher Grätz, founder and CEO of the Berlin online credit marketplace Kapilendo (for), and Oliver Vins, founder of the digital asset manager Vaamo based in Frankfurt, (against), meet in a debate on the issue.

What do you think? Can Berlin do it? Place your vote here.

Sincerely yours
Jörg von Fürstenwerth

Jörg von Fürstenwerth

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