The Swiss insurer's CEO Jean-Daniel Laffely took the helm in the midst of the pandemic. He tells finews.com what Vaudoise expects from 2021 and how bancassurance is back.

Jean-Daniel Laffely, you became CEO in the middle of a pandemic. How was that?

Very peculiar. The first big decision I took was to tell all of our staff to go home and to close the headquarter and our agencies. We also saw a dramatic drop in our equity by about 150 million Swiss francs due to stock market volatility in March and April. We’ve since recovered most of it as markets have evened out.

You also brought back staff fairly early – from mid-May to July.

Not everyone in the company was happy about that! I felt it was important to do it because we had to manage an important project in digital transformation and both Vaudoise and external staff had to get to know each other well. From July, employees came back four days per week. It also coincided with the summer holidays and it was a relief for most employees to see their colleagues again – knowing that the situation would change again in autumn. In the long run, it’s not ideal to manage a company entirely virtually.

Vaudoise’s business is very personalized and face-to-face. How did the first lock-down in Switzerland affect you?

In March, business volume dropped about 50 percent to 60 percent. Not only was our staff working from home, but everything in Switzerland was closed. We saw people deferring decisions – like to insure their vehicles – early on, but business caught up in June and July. We’re on track for roughly the same level of business volume as 2019.

How has the pandemic changed your 2021 projections?

Yes, we had less new business – but also fewer policy cancellations. Towards year-end we normally project growth in premiums of between 1.5 percent and 2 percent annually and we will achieve this goal in 2020. In September, we've budgeted an increase of only 0.5 percent for 2021, but now we've planned a higher figure for next year.

Your business is highly sensitive to the health of small- and mid-sized businesses. How badly will expected insolvencies here next year hurt you?

The key point for us is when the confederation and cantons turn off the tap for SME financial supports. A wave of bankruptcies following a credit cut-off would be more difficult for us. Our results also depend on markets and the general economic situation. We’ve slightly lifted the share of stocks in our asset allocation as a result of low or negative interest rates. Our equity exposure is hedged against a 20 percent crash and our own funds are above average.

What about cutting your spending, or structural measures?

It's not an option. Insurance in general is quite resilient. We’re also in an investment process to change our digital solutions in non-life insurance, as well as for the other lines of business.

You’re spending 100 million francs over three to five years on digitalization. What specifically are you doing?

We’ve been upgrading to a new platform provided by Guidewire (a U.S.-based technology firm) for our non-life products. In parallel, we’re working on a unique client experience and changing our internal architecture to be more agile.

Does this mean you will shut some of the more than 100 Vaudoise agencies in Switzerland?

No. Our strategy is one of proximity. The technology will help our sales force do their job. We have an omnichannel strategy. Therefore, we want to have the same product, at the same price, wherever they choose to buy it – online, through a broker, or via a partner.

You partner with other insurers, Swiss Life, for example. What about bancassurance – has the idea’s time come?

Thanks to technology helping collaboration, yes. The first time around, banks and insurers tried to merge – the results were suboptimal. Today the trend is more about collaboration.

What else has changed? UBS works with Swiss Re, Credit Suisse with Zurich.

I think we’ve also gotten better at understanding how our customers think. For example, someone who takes out a mortgage will probably ask themself what happens if they cannot make their payments. Do they need life insurance or a policy to cover a disability? It’s very important to have the right contact with a «warm» lead at that very moment. Banks and insurers can work together - it's a mix of user experience and technology.

Where are you in collaborating with banks?

We have some contact with banks and are studying the potential, but it’s too early to talk about it.

Jean-Daniel Laffely took the CEO job at Vaudoise in May. Previously be was finance chief at the Swiss insurer, which he joined in 2006 as head of risk. The 55-year-old Swiss native studied economics at the University of Lausanne. Vaudoise is both mutually-owned as well as publicly listed in Switzerland.