If CEO Gert De Winter has his way, Baloise will be a technology-driven finance company within four years. He tells finews.com what 2021 will bring the pandemic-stricken insurance industry – and why he prefers asking to answering questions.
Gert De Winter, corona made streaming junkies of many of us – what about you?
My daughters are fans of Netflix, but I am not a big TV viewer – I still spend a lot of time at work. But you are probably referring to the fact that our new company strategy, «Simply Safe: Season 2» sounds like a TV series.
Exactly – it also sounds like repetition. Was that intentional?
We're building on what helped us advance in the last few years – hence Season 2 and not 2.0. We've laid the foundation, now we want to deepen and accelerate the approach over the coming four years.
Can you take us through the trailer?
The philosophy is pretty simple or even naive: switched-on, motivated employees lead to satisfied clients and thus to success for all our stakeholders.
«Companies need to know the direction of travel»
So we want to be in the top five percent of best employers in Europe, win 1.5 million new clients, and generate 25 percent more cash for shareholders by 2025. We're also focusing in our core business, diversifying into new areas, and transforming the entire company.
One pandemic year into it, how realistic is your four-year plan?
I get that question a lot. The strategic direction was set out at the beginning of this year – before the pandemic. I still find it valid. Of course you can't plan every detail and need to stay flexible, but a company needs to know its direction of travel. That is even more true in this pandemic than before, I find. The crisis accelerated our strategy.
Switzerland unleashed a battery of corona measures, which at times caused confusion. Are you baking another widespread lockdown in Europe into Baloise's planning?
We're factoring it in. At the start, we were dealing with clients while working from home and took responsibility for things like company interruptions and risks we had insured. Thanks to this experience, I'd expect a second wave to hit us less severely than the initial one. Developments further out are harder to forecast, and I have mixed feelings when I think about it.
Why?
There were and still are too many favorable reports from the business. I'm a little more cautious and not particularly optimistic. I don't think we've seen the full economic fallout yet.
«You cannot insure against a pandemic»
Insurance is closely tied to the wider economic situation. If small and mid-sized companies come under pressure, it will hit insurers as well.
How was business for Baloise towards the back-end of 2020?
The fourth-quarter business was fairly normal. We see that more complicated solutions – like pension plans, which require a lot of advisory – are a little more difficult to bed down because we can't communicate as easily as we used to.
Insurance not only shoulders a big chunk of the pandemic's cost but it is also being pilloried for refusing to pay some damage claims. Did the industry underestimate the effect of these decisions?
I can't speak for our peers, but Baloise took responsibility and paid out in most cases. Fundamentally, you cannot insure against a pandemic. Insurers operate under a solidarity principle: the vast bulk pays the damages for a few.
«Our core business is insurance – and it still will be in 2030»
The coronavirus is hitting the whole world, and disrupting this principle. As a result, we don't offer any epidemic or pandemic policies anymore. The industry is discussing a Covid pool mechanism instead.
How soon would a pool happen?
Suggestions have been submitted to Switzerland's insurance association and discussed with the government. Nothing has been decided yet.
The pandemic fosters a feeling of uncertainty. Isn't that ultimately favorable for your business?
We certainly live in an era of heightened awareness of risk. I'm not sure if that translates to more premiums.
Baloise is increasingly moving away from the traditional insurance image. Your goal is to become a technology-driven provider of financial services and a key player in an ecosystem of home and mobility. Will Baloise be unrecognizable as an insurer in four years?
Our core business is insurance – and will be in 2030 too. We want to win another 10 billion Swiss francs in banking and asset management.
«While Tesla writes policies, Baloise expands in mobility»
The third pillar – which is new – are ecosystems, which are also closely related to insurance. It's more of an evolution...
Towards...?
Today's insurance business is too complex for our clients, and standardized solutions like automotive policies are increasingly going digital. By contrast, personal advice like in pension planning is becoming more important. Striking the right balance between digital and personal is going to be a key challenge in the coming years.
Won't big tech steal a march on you by starting to write insurance policies?
An ecosystem attempts to link services and make life easier for clients. About three to a maximum of ten of these ecosystems, per country, will thrive. We started early and tried to establish a spot. We're entering new segments thanks to these links. While Tesla is providing insurance, Baloise is expanding in mobility.
Banks have also adopted ecosystem thinking, and bancassurance is back in fashion. Raiffeisen is working with Mobiliar, UBS with Zurich, and Credit Suisse with Axa. Besides owning regional bank Soba, is Baloise a wallflower?
We're very happy with our Swiss model and are expanding it organically – all banking services can be tapped in our agencies, so we're not looking for new partners. But we're also looking into partnerships in our other markets, like in Luxembourg with ING and with Bank van Breda in Belgium.
Baloise emphasizes new work models. Your digitization people as well as asset management already are fairly agile, and technology staff gets to help decide on new hires. When will your branch network go «agile»?
I'm not hugely fond of the term agile anymore because its use is now inflationary. To me it means directed by the client, working together, and transparency: these principles are lived in our agencies.
«I absolutely don't see giving up half of our office space»
We already let our Swiss clients decide how they want to interact with us in terms of distribution – digitally or personally. In Switzerland, we call this a multi-channel strategy. If you look at it that way, our «front office» already embodies fairly agile principles.
Did compulsory work-from-home arrangements help or hinder the workplace transformation at Baloise?
The crisis was definitely an accelerator. All of a sudden we had 98 percent of our staff working from home during the lockdown. Clients still wanted to be looked after, and projects needed to be attended to as well. We're building on that in designing our future working model, but we need to wait for the crisis to end before launching it.
Why?
There's no stability in crisis. To do the right thing and not make any mistakes, we should try and wait for the situation to normalize. Then we can test the concepts we've chosen and select which one works best.
What do these models look like?
We're thinking of a workflow that partly takes place away from the traditional office and is highly geared to own responsibility. Delivering good service to clients is our priority, and the teams need to function.
«I do have a «beer with Gert» event in my calendar for tonight»
The model also needs to consider individual needs. We want to strengthen and reinforce the things we experienced as very positive in the last nine months.
So you'll need less office space?
I absolutely don't see us closing out half of our office space. The crisis demonstrated how important social contact is. That's why we organized so-called office days where employees can still group together, exchange views, and brainstorm.
Baloise also observes a «beer with Gert» after-work event. What happened to this during the pandemic?
I have one in my calendar for tonight. We of course paused the format at the start of the crisis but kept getting more and more questions about it from employees in recent months. We started doing it again two weeks ago – virtually, with about ten people. I was skeptical that it would work, but it went very well.
Virtual beer?
So the interesting thing about it was that we would always organize it locally with teams – in Basel, Zurich, Lugano, or in Germany, Belgium, and Luxembourg.
«These employees tackle the far more relevant topics than I do»
But by doing it virtually we can open it up a bit and last time we had a mix of Swiss and German colleagues – so you can network within the group. Notably, the beer with Gert part of it is more anecdotal...
Meaning...?
It's just one of a raft of smaller initiatives which sum change our corporate culture. A variety of smaller elements will underpin our advancement into the top five percent of best employers in Europe by 2025, like ditching individual goals in favor of team-based ones, a very successful Swiss pilot project for staff to use ten percent of their working hours for continuing education, or our first «sparks» three years ago.
Sparks?
That's what we call the 300 to 400 employees within Baloise who are impeccably connected. They develop lateral initiatives instead of me and my team dictating everything from the top down. These colleagues have the best sense of what Baloise needs to tackle next, and from that perspective, they address much more relevant topics than I do.
Are you making yourself redundant?
A little bit. We'll still need C-suite executives in the future – but they'll have a different role. CEOs of tomorrow need to ask questions as opposed to delivering answers. They think more strategically and operationally will intervene less frequently. The strategic portion, aligned with the board, will take up about 40 percent of the future job – roughly 25 percent today. Executives should spend about 30 percent of their time on personnel development and culture, and only the remaining 30 percent on operational matters.
Speaking of beer, the new year is upon us. Your resolutions?
I'd have to think about it so thank you for the reminder. As CEO I resolve to chaperone the rollout of our strategy and support it as best I can.
Gert De Winter has been CEO of Baloise insurance company since 2016. The 54-year-old Belgian national began his career as a consultant, advancing to partner at Accenture in Brussels. He joined Mercator, a subsidiary of Baloise, in 2005 as head of IT and human resources and was CEO a combined entity of insurers Mercator, Nateus, and Avero from 2009 until 2015. He is part of the management of Basel's chamber of commerce.
