You have to be aware of all risks in doing business. It is not about ticking boxes in checklists, says Baloise CEO Gert De Winter in an interview with finews.com. Risk management is not just a question of compliance – but one of culture.


Gert De Winter, is working from home coming to an end?

I think so. People want to go back to the office and meet colleagues, have coffee breaks, and talk with each other again. Working from home was important but does it work 100 percent in the long term? Work and private lives start getting mixed up. Aren't they better separated? Sometimes I think the whole thing is a contradiction.

When?

When you want to create something from scratch. Doing that digitally is hard. You have to meet, think about things together, and be able to to «co-create». Culture is extremely important to us and I even think it is a competitive advantage. But culture gets diluted when you don't meet. You only say something at a Zoom meeting when you get asked or you have something to say. That is not enough.

«Pandemics used to be science fiction»

As an example, our leadership team had a complicated problem to solve. We didn't make any progress because we were not sitting next to each other physically. We couldn't see each other's reactions. It wasn't good. That is why I think in future there is going to be a combination of methods when it comes to exchanging ideas and communicate. But, at this first juncture, I certainly think that people want to go back to the office.

Are we more safety-minded because of the pandemic?

Absolutely. The consciousness of risks has increased. Pandemics used to be science fiction. Suddenly it became reality. But companies and families are more aware of dangers now, even in areas such as cyber-risk. The need for security has risen enormously.

Before all this happened, was the possibility of a pandemic a concern for Baloise?

Yes, we always rated the possibility of a pandemic as high risk although we thought the probability of one happening was low. Now we know the probability is much higher than we thought.

Why is business culture so important to you as CEO?

Our fundamental philosophy is «Simply safe». The strategy is extremely simple. Our 8,000 employees are the Alpha and Omega. It all starts with them and ends with them. Satisfied employees mean satisfied clients, which brings growth and success. That is why culture is so important.

«The fact is that I have two passions»

If our employees show up for work with a smile, then the chances that we will provide excellent service to clients is high. You can copy products and processes. Efficiency, even innovation. But culture you have to create yourself.

How are difficult issues such as job cuts handled by culture?

You have to be transparent. That is part of managing a company. You naturally want to be a top employer as part of your culture. But you also have to rationally and analytically evaluate where there are savings. You have to cut and become more efficient, digitalize. None of these things are a contraction in becoming the best employer possible. It is more about putting all the cards on the table and becoming more efficient, where and when possible.

How did you develop this perspective?

I don't know when exactly. The fact is that I have two passions. Technology and IT on one side and people and culture on the other. Some people tell me sometimes that is counterintuitive, being analytically rational on the one hand and personable on the other.

«We weren't growing anymore. Why was that?»

When we introduced our «Simply safe» strategy in 2014-15, we found out that we were operationally excellent but that we weren't growing anymore. Why was that? An inter-disciplinary team looked at around 20 companies here and abroad. We wanted to find out what their secret was. In the end, it was culture. Everything depends on that – employees, clients, success.

It might seem naive but it is really logical. It was clear to us that we could make a difference with culture. But we had to do it ourselves. No one else could.

How does that compare with banking?

It is hard to say. Insurances have to think extremely long-term. We have liabilities that stretch 30, 40 years out. We almost have to think sustainably. Banks have to contend with far more short-term implications.

Aren't banking employees more driven by financial incentives than insurance?

It is possible. I can't really talk about other companies. But sometimes I read in the media things and think ‹that can't be true›. I think it is dangerous to be too motivated by short-term profit.

That seems to be Credit Suisse's problem in the last few months.

I do not know the background. Risk management is not just a question of compliance – but one of culture.

Could you explain that?

You have to be aware of all risks in doing business. You have to be conscious of ethics. It is not about ticking boxes in checklists. You have to be aware of the risks and always keep in mind that something could go wrong.

«It is irrelevant for clients whether you are a bank or an insurance»

You have to be conscious about risk, and that is part of our culture and not a compliance process. Baloise has a highly conscious risk culture. Maybe that is not the same in other companies because they are too dependent on processes.

How can «bankassurance» even work given the difference between banks and insurances?

It works for us – with Soba Bank, together with Baloise Asset Management and the insurance business. It is irrelevant for clients whether you are a bank or insurance. The main things are that safety, finances, health, retirement and assets are covered. I see an advantage with «bankassurance» in our case because all companies are part of the same group and they have the same culture.

Are we at the start of a new «bankassurance» trend?

I see a trend going in that direction because insurers are looking for more client contact. Banks are continuously in touch with clients and we are investing in that kind of environment.

When will the insurance sector be disrupted?

I do not believe in disruption, but more of a fast-paced evolution. You frequently hear that start-ups are going to turn the business on its head. I don't believe that.

«We underestimated that at the start»

We are seeing a perfect combination of traditional insurers and start-ups. The latter brings passion, technology and talent. We contribute experience, clients, brand, culture – and data. If you can combine the two, you get a unique symbiosis.

Doesn't Baloise have to grow its asset management arm to reach critical mass?

We decided to provide third-party client services about four years ago. Our target was 5 billion Swiss francs in client assets by the end of 2021 ($5.57 billion). It takes time to be successful. You need the right products, track record, good distribution and excellent connections to retirement funds. We underestimated that at the start. But we are on track now and now we are targeting $11.15 billion by 2025.

You have reached the 5 billion target?

Not yet, but we still have six months.

Baloise's profit fell by half in 2020. Do you find that disappointing?

No, the result was a robust one.

Despite the decline?

When you compare 2019 with 2020, you have three key influencing factors. In 2019 we had an extraordinary tax impact of that we didn't have in 2020. We also paid out $200 million in damages because of the COVID-19 pandemic, fully supporting our clients in a difficult period. That is like having 10 to 15 disastrous winter storms at once. It was the largest insurance event in the history of Baloise.

«I think it is logical to be restrained about bonuses»

Then, third, you had the volatility in equity markets. Even though European markets recovered, they were still down 5 percent at the end of the year

Even though you yourself earned less?

We fared pretty well in comparison to other companies. Still, I think it is logical to be restrained about bonuses. No one lives in isolation.

Blackrock is the largest investor in Baloise. Have you met Larry Fink?

I haven't unfortunately. I have never met him but would very much appreciate having the opportunity to do so. Blackrock is our largest shareholder when you add the different funds together, as is the case with other SMI listed companies.

Do you invest in Baloise products?

Yes, I am a loyal Baloise client.

Do you have a life insurance?

Of course. Both in insurance and banking terms I am a Baloise client.


Gert De Winter has been CEO of the Baloise Gruppe since 2016. The 55-year-old Belgian started his career as a consultant in 1988, eventually becoming a partner at Accenture in Brussels. He joined Baloise unit Mercator in 2005 as head of IT and human resources. He headed Baloise Insurance as CEO between 2009 and 2015, which was the entity resulting from the merger of Mercator, Nateus und Avero. He is also a board member of the Basel City and Basel Land Chamber of Commerce.