Liz Green:

Welcome everybody to ICMIF’s second in our series of CEO panel webinars. We are very lucky today to be having at our head office three of our executive committee here, and we are thrilled as well that they participated in the last webinar. So thank you for returning and thank you for putting your trust in us once again. First of all, I think there’s some introductions in order. So first of all, I’d like to welcome our previous chair and also the CEO of P&V Group, Hilde Vernaillen. Welcome.

I’d also like to welcome Robert Otto, member of the Executive Board at Achmea in the Netherlands.

Robert Otto:

Thank you.

Liz Green:

Nice to meet you again. And last but not least, we’ve got Nick Turner here, who’s the Group Chief Executive at NFU Mutual in the UK.

Nick Turner:

Thank you.

Liz Green:

Yes, wonderful to have you all here. So today we are going to once again explore what’s uppermost on our esteemed CEO’s minds at the moment. What’s keeping you awake at night? What’s energizing you at the moment while you lead your wonderful values led and purpose led organizations. So let’s get into it, shall we? So let’s start about one of our main topics, something that we all like to talk about, which is our mutuality. So guys, how do you feel that mutuality is an enabler for you and your current growth strategy? And if I may, I’m going to start ladies first with Hilde.

Hilde Vernaillen:

All right. Well, I probably will tell you something I told so many times already, but it’s all about the purpose of, it’s about why we are doing things. So what we want to do is protect as many people as we can by insurance coverage, being inclusive in insurance. That’s what mutuality is about. And we were start up like that back in the beginning of the 20th century and it’s still the case today. And I do think it’s more relevant than ever today, trying to be inclusive and protect as many people as we can.

Liz Green:

Yeah. Thank you, Hilde. And how does that sit with you, Robert and Nick? How do you feel about what Hilde said? Does it resonate?

Robert Otto:

No, it does. Absolutely. And maybe next to that, if you look at the core of, I think our group’s clients are really in the center of it, and of course everybody, I guess also other kind of companies are saying this. So where can you see some, let’s say proof of this? And I guess at least when I speak about Achmea, if you see the ratings that we get from our clients, for example, they’re really among the highest in the industry, if not highest. And also if I look for myself how being a cooperative is reflected in how we steer the business, it’s really a multi-stakeholder company. So it’s not only about the financial. If we take a decision, then if we take a decision, we look at what’s the impact on society, on our clients, for the employees, and then also of course financial. So that’s also how personally very much feel.

Liz Green:

And Nick, you’re no stranger to awards and credits at NFU Mutual. Does any of that resonate with you?

Nick Turner:

It definitely does. I mean, I think the… so, absolutely the purpose and is at the core and that is absolutely something that really resonates in the way that we deliver as an organization. But I wanted to take a slightly different lens, which is to think about the structure of mutuality. And it’s a timely question because we ask ourselves annually and this month the paper comes to the board, does mutuality hinder our plans in any way, shape or form, or does it enable them? It’s that annual question that we ask as a good discipline to make sure that our strategy is powered by the structure of mutuality, which of course is member owned.

And the paper, as you would expect, has a ringing endorsement for our structure because we believe that it’s absolutely in our member’s interest to remain mutual. And it provides some very practical differences to proprietary companies. So for example, we can think a lot longer term and take decisions that are in member interests without having to balance those against the needs of shareholders. So we have a simplifying sort of reason to get up in the morning and make decisions. So that combination of real clarity of who we’re here to serve and a longer term nature of our decision-making processes gives us, in my opinion, a fundamental differentiator over other structures.

Robert Otto:

Now I can really see it very, let’s say recent example in our case, 2022 has been I guess, a challenging year for insurance companies, also for us. And if you look at it a little bit deeper, you see that operationally we’re actually doing very well. So what really, let’s say the wind is blowing against us is coming from the financial markets. I guess in another environment, if you’re, let’s say financially you’re not meeting your budget, you would have a tough discussion.

Also when it comes to your plans. But we said, “Well guys, if we’re doing operationally what we plan to do, then we continue to do it. So we’re not going to have massive cost-cutting. We continue to invest in innovation because we have a good story to tell. It’s about long term.”

Nick Turner:

Long term. Absolutely.

Robert Otto:

Yeah, absolutely. Yeah.

Hilde Vernaillen:

I fully agree with that. We also look back at a very good year to ’22 because we just grow clients and it’s persons first and financials. You need financials, you need good financials to make sure you can protect more people in the future and that you can still be there in the future, but it’s there because you need it. It’s not a purpose as such, so it is completely different.

Nick Turner:

No, you’re not managing. I mean, one of our non-execs described it as managing to service and capital strength as opposed to profitability in any particular short-term period. I mean, obviously we all need to make a profit over an amount of times a good commercial discipline, but in the short term, that’s not the focus. And we’ve seen certainly in the financial conditions that you’re describing, Robert, we’ve seen some proprietary insurers in the UK see their share prices drop quite significantly. And that becomes a complete focus for their board around managing all those stakeholders. It’s deeply uninteresting for us.

Nick Turner:

It’s just around how well we’ve served our members over the year or growing the membership.

Liz Green:

So it may well be a sort of add on to where we’ve gone with this discussion, but where specifically do you think mutuality makes the maximum difference in your organization? I suppose where I’m going with this is thinking about from different stakeholders. So for employees, from external opinion formers, where is it that it really makes a tangible difference that people took feedback to you? Nick?

Nick Turner:

Yeah, I mean I think, well there’s from a tangible, in our business, we have a thing called mutual bonus, which is literally profits and income that we generate from our capital reserve is returned to members through a reduction in their premium very simply. And at the moment, if you’ve been with us for five years, that equates to 13-and-a-half percent off your renewing premium. So that’s tangible. But your question around or how does that affect the members, sorry, the staff that are serving the membership, again, that clarifying reason to come to work is so clear. I’m here to pay members’ claims, steward our business for the future generations to come and just deliver a fantastic insurance experience to people.

Liz Green:

Yeah, fantastic. Now, from what I know of your two organizations, that’s quite a similar story. Can you bring that to life for Achmea, for example?

Robert Otto:

Yeah, yeah. And since you were asking about various staples, let me take another group, let me take the employees. Being a mutual, I think we have a little bit different approach towards what we want to be for our employees than other companies, and I’ll give you some tangible examples. We’re actually the first one in the market to go back to working a week of 34 hours, basically to create space for better work-life balance, but also for our employees, for example, to take care of elderly people, for example, parents and these kind of things. We stopped two, three years ago, the annual appraisal. It was actually a negative experience for everybody involved. And so now it’s not an appraisal. What went wrong last year was basically it’s a conversation about your development.
And maybe a third example this year, we were actually just talking about it over lunch, we introduced a climate. Now we give all our employees 2,500 euros to spend on climate related investments. For example, electric bike, solar panels. So it’s not something they can spend to go out for dinner, but they have to spend on something that’s good for the environment. But it also reduces, let’s say, hopefully the bill of transport or energy or whatever.

Liz Green:

Fantastic. Way to go on that one.

Robert Otto:

And actually we got quite a lot of interest for this from other companies in the Dutch market.

Liz Green:

That’s amazing. And Hilde?

Hilde Vernaillen:

I really like the examples. I could take those back. We also have big discussions on appraisals and how to go forward with that because yeah, agree. That’s not a good conversation.

But yes, we do invest a lot on engagement of the staff members and we measure them. And you can see it’s a real difference with… We tend to have discussions with people coming from other companies to ours after one or two years and it’s just like, it’s completely different.

We do respect each other. There are no political games between people. We help each other over different departments. But you can only feel it when you are in the company. So now we use testimonials to recruit as well because we have a very tough market to recruit for the moment. And so we use testimonials of people. It’s working very well because you just love it.

Liz Green:

That’s a perfect segue actually into another part of the question, which is about obviously talent and how you can leverage mutuality to help get the right talent. Have you got any, we’ve got a wonderful story there from Hilde. Have you got any good stories about how you’ve managed woo that, those young talents? Or it doesn’t have to be young as long as it’s talent that comes in?

Nick Turner:

I think from my perspective, I think there’s a couple of things that I would mention. I mean, we subscribe to the Gallup Engagement Survey, which is the global survey. And for the eighth year running, we’ve been in the 99th percentile of companies, which is the top 1%, which gives you an indication of how engaged people are in this mission that we have. So if you’ve got in our business, 4,300 people on the payroll, another 2,700 out in the agency network, all focused on a really powerful and exciting energizing mission, why wouldn’t you want to be part of that?

It’s really clear. And then the other aspect I think of insurance is we have what I would call craftspeople, people who do actuarial work or accountancy work. And it can be quite frustrating to work in proprietary companies where you’ve got shifting strategies quite often, shifting management quite often. The long-term nature of what we do I think attracts craftspeople. And when I’m talking to people who are coming to work for us, I say, “If you want to do the best work of your life, we will give you the room to do that. So, you’ve trained hard to be an actuary or an insurance professional or an accountant or a risk professional. Come here and take everything that you’ve learned and deploy it in the most effective environment that you can, a mutual environment. And you’ve worked hard, you want to make a difference. So come here and make a difference.”

Liz Green:

Wow. I love that. The idea of realizing a craftsman’s vision and using that for attention. How about you, Robert? Does that resonate?

Robert Otto:

Yeah, it’s actually a very interesting and important question because I do believe, actually I’m convinced we also belong to the top, let’s say companies when it comes to being the best employer. Actually, if I’m not mistaken, we’re the top 10 in our market space. But if I’m honest, what’s really being reflected is of course is we are very much client folks. People see it, it’s sympathetic, it’s purpose led. These are things that people see. We are the number one health insurance company, which also gives it the social profile. But if I would ask over if, I would not ask, but yeah, if I would ask, “Why do you want to work? Why are you working for Achmea?” The word “cooperative” or “mutual” will not be in there. So it’s all the things that we are that people will name but not mutuality.

And to be really honest, what I also see a lot when colleagues are working for us a little bit longer, they’re even more enthusiastic than when they started because then they learn what it really means.

So it’s some sort of a frustration that who we are is very difficult to get into the heads of, well those who are not a client yet or not an employee yet.

Hilde Vernaillen:

No, you need to feel it from the inside.

Robert Otto:

Because I think you even grow faster.

Hilde Vernaillen:

You need to feel it from the inside actually.

Nick Turner:

Yeah, I agree.

Robert Otto:

Yeah, but it’s really challenge how to get that out more.

Liz Green:

So a few careers back, I worked for Swiss Life and we called it the Swiss Life feeling.

And it was exactly that because it was so difficult to grab, but it was a feeling. And once you’ve got that, and that’s why we were used to use recommendations from staff as well to explain it. But it sounds like the testimonials ideas going really well.

Liz Green:

Well, we all know that with every upside there’s always a potential downside. So from your experience, is there a downside to mutuality? Anybody want to kick off the discussion in mind?

Robert Otto:

Yeah, I wouldn’t mind to kick off because I really see one and that’s difficult for us and I’ll give very concrete example to raise funds basically to grow the company. And the way I look at it, if I look at the UP landscape around 7,000, we’re not only non-life 7,000 non-life share companies, well everybody knows that’s not going to last. It should be far less than this. And in the various markets we are active, I basically see, experience that part of the growth of competitions coming from the M&As that they can do it. We also have this ambition, but our pockets are not as deep as companies which can raise money also in different ways. So the question I would have, and for now I see it as a hindering factor, is how in a consolidating world where mutuals have always been more focused on a country, how are we going to compete if you do not have that benefit?

Liz Green:

Would anybody like to respond?

Hilde Vernaillen:

Oh, this is discussions we have for a while actually, also with the regulator at all levels. I’m not quite sure we don’t have access to capital when you really need it, but we need to do it differently. So I really believe in partnerships between mutuals over borders to make sure we can help each other to grow in their own market, which could be an interesting way of looking at it, but it’s not easy.
It’s not easy. Yeah, maybe first go on that topic and then I come back to another-

Nick Turner:

Another hindering factor.

Just to give you a different, I mean we are very capitally strong so we don’t have a challenge of raising capital for what we want to do. Our strategy is well underpinned. But I think that it’s like every strength has an overplayed strength becomes a weakness. And one of our challenges around thinking long term is that you put a pin in the future and you become not as agile as you need to be in the short term.

Or in fact that you don’t, it’s more of a risk than a downside which is, you don’t tack, you don’t change course in the light of changing conditions. So we try and be alive to that risk, but that’s the overplayed strength of mutuality that you can set your plans in too solidly and not respond to a changing environment.

Liz Green:

Yeah, I can see that as a sort of unconscious bias towards the long-term vision.

Hilde Vernaillen:

Maybe adding to that’s sort long-term vision is indeed, it’s more complex to lead for the long term than on short-term revenue and capital. You need leaders that can balance their effort over all stakeholders all the time. So I tend to say we need better leaders than the rest of the industry. And I think we have.

But it is a challenge and it is a challenge to attract new people and make sure they really understand the model.

Liz Green:

Yeah, it’s about leadership.

Hilde Vernaillen:

That would be a challenge for me as well.

Liz Green:

And it goes back to attracting through your brand and through your campaigns and what you do as well as what you say to get that talent to be part of your organization. Fascinating. But we must move on because we have quite a lot I’d love to explore with you while I have you.

The next topic is around something which is in every CEO’s mind at the moment, which is business transformation, transforming your organizations to make sure along with the rest of the industry that you’re keeping up. So tell me about your journey at the moment. What type of transformation are you going through at the moment and how’s your organization adapting to this constant change it feels like in some organizations, I suppose? Who would like to kick off on that one?

Nick Turner:

Okay. So we thought, I’m sure everyone does, but we thought very long and hard around what kind of organization we wanted to build over the long term. Sort of falling on from the theme of earlier. And that we developed a target operating model based on nine different lenses of how our business should look and feel in the long term. And that translated back into what we describe as a capability roadmap. So what we’ll be able to do in each year as we build our infrastructure and they’re like circling airplanes that we know roughly what we’ve got to build over the next seven, eight years actually. And then obviously you get more granular as you get closer to the now.

Nick Turner:

And then you prioritize aggressively and then commit money in a fact that you know the sequencing with which you need to develop. That translates practically now. We’re in the middle of a massive transformation in replacing our policy administration system, which anybody who’s done that before will wonder why I’ve still got some color in my hair, but it’s going okay. It’s going very well, but it is all encompassing.

Nick Turner:

And so that takes up about, that and linked with the digitization of our customer interface is probably about 40% of our change stack right now. So yeah, that’s what’s going on in our business at the moment.

Robert Otto:

Great.

Liz Green:

How about you?

Robert Otto:

Oh you know, you still have hair.

Yes, that’s the important difference. No, it’s very specific for our company, which over years has been growing also because a lot of cooperatives basically joined the club and we’re really making it far more one Achmea than it has ever been. So there’s one purpose all over the group and we really want to make an impact in society. So we’ve chosen a few, instead of everybody choosing its own field, we’ve chosen a few in which the whole group basically is investing really to help society taking next step.

Next to that is really specific, more generic. It’s about, indeed, and we basically finished this, bringing all these offices into a single one for non-life, for health and for life, which we did. Digitalization and not only for ourselves but also the whole value chain. Simplification. Another topic we all talked about HR. We are looking at a shortage of employees, although we’ve been shrinking because our clients are doing more themselves digital.

Robert Otto:

But still we’re looking at a century of having a shortage of hands that’s going to hit society but also our businesses. It’s going to last for very long, long time. So we also look at how can we be even more an employer of choice and what can we do for that? These are some of the big ones.

Hilde Vernaillen:

Quite similar things I would say.

A lot of IT big transformations and the full value chain digitalization in the front, at the beginning and at the end. Make sure we do build an IT infrastructure that is future-proof, which is not easy. Trying to convince ourselves that we won’t need this kind of big transformations anymore in the future. Being very open to the world with our core systems, which is not easy. It’s also about the governance around IT transformation, using agile methodology. But we try to do better than that and try to really have business and IT working together. But it’s a huge, huge transformation of the way of doing things. So that’s not an easy one. And then investing in people, I think a lot, a lot of investment in people, in leadership but also in self leadership. So we see leadership at all levels of the organization. Showing the example at the top, but having everybody, we call it the Employee 2.0 Project with okay, trying to have them all in this new world.

Liz Green:

Exactly. And amazing leadership and inspiration I’m sure from, certainly from these three CEOs to keep their focus, which is so important. Now obviously we took out in our rear-view mirror hopefully the pandemic. Let’s hope.

Robert Otto:

Yeah, till the next one.

Liz Green:

But what were the learnings just while we’re thinking about transformation, what were the key learnings from the pandemic and how’s that helped you to build more resilience into your organization?

Robert Otto:

Yeah, well maybe shall I start?

Liz Green:

Please.

Robert Otto:

First of all, and not only the pandemic, but if you look at our annual or official often update of the way that we look at risks, we didn’t have, of course we had the pandemic in the scenarios but not the way that we’ve been experiencing it with COVID, but also the war to be honest, and inflation that we are now seeing. So from a risk perspective, it really helped us to think even more about so what risks are we not seeing?

It’s still a challenge of how do we bring it back to the models that we are running. But we are looking much wider at risks, far more concrete. We already had a culture of agile working and being able to work from home. So when we went in our first lockdown in the weekend, all 17,000 employees of Achmea, they could work from home. There was not an issue. But we brought it, let’s say, to the next level. So next level in the sense that you work where you are required to be for the work that you do. So if you need to think, you can do it in your home. If there’s teamwork required, you go to an office space, which more and more looks like a homey environment than an office space. So you see far more balance in working from home and working in our offices. But also things like more virtual also in the distance. So we’re not flying all the time as we didn’t it really often, but we’re doing it even less.

Liz Green:

Hilde?

Hilde Vernaillen:

Almost the same, I would say. Yeah, the needs to be very reactive on anything that can happen around you and maybe some just relating to the fact that we were seeing people all the time, they really need to connect with people. We do connect even more than before with people even if we don’t say, see them all the time. So that’s really learning through that period and then well, everybody at home then you needed to put a lot of effort in this, but that’s going on now, so. Really the need to connect to everybody.

Liz Green:

Connecting people is hugely important, I agree. And how about you, Nick?

Nick Turner:

Building on what’s already been said, but a few additional thoughts. So we learned that business continuity solutions don’t need, for example, we often had an empty office space in case an office blew up and we don’t have that anymore. So there’s some property savings. We’ve got to a settled position where property occupancy was running at about 40% and everyone seems happy, nothing’s breaking, the culture hasn’t disappeared and all those kind of good things. So that does give you property opportunities and collaboratively with our people, we’ve realized some of those property opportunities and we’ll continue to look at that. But also flexibility.

So we run desk booking now where people log onto the web and you basically got an office that is a blank canvas that people populate depending on who they want to work with and how they want to work. And it solves a lot of traditional office challenges that you have when you have a rigid way of working. So in other words, if you fall out with the person sitting next to you, desk book somewhere else. Suddenly what’s become a problem and a potential mental health risk just means move desks and do it yourself.

So there’s a bit of empowerment going on around the new flexibility that I was concerned people wouldn’t embrace and they really have. And I think the other couple of things, just to throw into the mix, we also learned that we could change faster than we thought and with less governance and nothing breaks. So we created a much smaller change team. And also the clarity of purpose meant that more people engage with what we needed to do. So we got through that. So we were challenging ourselves on our governance processes generally on changing. And so it’s left us more match fit I would say after the pandemic. The things that we were worried about in the new world are just making sure that the workplace is still balanced and fair to all parties, be that introverts, extroverts, men, women, all those kind of things. So we’re very alive to that.

We’re also alive to is mental health brewing in people that we don’t see? So how the well-being of people is now. And we’re also focusing more on things like inducting people. There’s more money going into the induction programs to make sure that if you don’t get as much cultural infection for want of a better word, from sitting around people, let’s make sure that we’re giving it to you in a more structured way. So that that’s really, it’s different. We know it’s different but not bad different. Lots of good things to see out of it.

Robert Otto:

Well, I have to say this induction period, I’m not sure how the experience is on yours, especially younger generation or new entrance. For them it has been difficult, it’s getting better, but they really need to, when they come, they like to come to the office and when they get there, they need to learn from the colleagues, they need to become part of a team, they need to learn a culture. And for them it’s really been a challenge. So whenever I’m at a meeting of, let’s say, young Achmea, that’s the number one issue that they raise to me.

Hilde Vernaillen:

Yeah, but not only young people, I would say. We had that difficulty with all people that we hired during that period of COVID because they’ve felt like they’re lost. So now it’s okay now, but it was really an issue in the beginning.

Liz Green:

I think when people, whether they’re young or whatever age, and they come into an organization, often they’re coming in as well to expand their social network as well. We’re working for purpose led organizations where you believe in it and you want to hang around with like-minded people. And I think I really hear this and I can imagine somebody certainly when they’re coming into either returning to work after maternity or whatever break and not being able to have that experience that you are expecting a social side, that’s something. So it sounds like you’re working really hard on that. It’s not easy, I know.

Talking about another not so easy challenge ahead. So I talked about the rear-view mirror being COVID and hopefully the pandemic, but ahead of us we’re looking now to the sustainability development goals in 2030. And I know it’s important to our members, it’s certainly important to ICMIF. I’m very curious to know how sustainability or indeed ESG is driving your strategies or is involved in your strategies. Who would like to go first? Maybe Hilde?

Hilde Vernaillen:

Okay. So yeah, it’s all over, I must say. So it’s an investment is in our product. So we now need to have a kind of checklist on sustainability on every new product or even little change in the product we have, they need to go through that sustainability questionnaire, otherwise we don’t raise that product. It’s in the way we are running the business operationally. So it’s really all over. And it’s not easy because our ambitions are so high and we just see small movement forward.
So it’s really a journey. An ambitious journey but we will be there.

Liz Green:

Fantastic. It’s great that you’ve got the commitment. How about from you gentleman, from your organization’s perspective?

Robert Otto:

Yeah, well it’s of course, it’s indeed I think it’s in the heart of what we do, has always been. But now we basically raise the bar in terms of our strategy and also by the way, compliments for the work that your office has been doing because that’s also a big part of the inspiration. We have set ourselves target for 230 to be net zero as organization, 240 for our investments, 250 for our client base. And on this journey we are facing quite some dilemmas for, first of all, if you set an ambition and you make it very concrete, you better live up to it. And then you get into discussions like if we want to have on average the house that we provide with a mortgage, with the energy label A. With the size of our group, we basically say the whole country should be on average on A. Or are we going to not ensure diesel cars anymore?

And if we do, then that’s good for the E, but it hits the S because typically people with a lower wallet or a smaller wallet, they drive, they still driving the diesel cars. So how are you going to deal with that?

So it’s these type of discussion that we have, which I think is really good to have. And in our case, there’s also an international dimension. For example, if we’re not going to invest anymore or insure old energy type of industries, then how are we going to deal with our operations in Turkey where the country is not as far as the Neth-, maybe far is not the right word, but it’s structured in a different way. How are you going to deal with that? Is it going to be a group policy or are you going to differentiate per country? So it’s these type of discussions which we have, but I think they’re very relevant and this is what’s all about.

Liz Green:

Wonderful. And I’d imagine they’d come back to your purpose as well.

Robert Otto:

Yeah.

Hilde Vernaillen:

And it’s also a question of consistency between the different arms of your business. We have a lot of discussions between investments and underwriting.

Robert Otto:

Yeah, exactly.

Hilde Vernaillen:

Because I try to do very good on the investment side, avoiding to invest in fossil industry for instance, and then in the underwriting. So they challenge each other all the time.

Robert Otto:

Yeah, we have exactly the same thing.

Liz Green:

Wonderful. Nick?

Nick Turner:

I mean, obviously we’ve got the environmental goals that everyone else has. The net zero by 2050 and a number of staging posts. And for an insurance company, I mean we’re not on the highest list of emitters. There’s industries, much more industries than us produce a lot more greenhouse gases and probably our data centers are the thing that is probably is the most polluting and we can work with all those sort of solutions. But I think the thing I was going to pick up was looking at some of the S and the G and some of the other areas that perhaps don’t get quite so much attention. I mean, when you really delve down into what constitutes under the E, under the S and under the G, you do find some interesting nuggets and for example, things like working out what our biodiversity strategy is.

Nick Turner:

What kind of things are we growing on our property sites and do we create environments for insects and pollinating insects and birds and have we got the right number of trees and is our soil capturing enough carbon dioxide and can we also encourage many of our customers or help our customers in some way to better understand how to steward their sort of assets as well?

So there’s a lot of layers of education and curiosity that you can delve down into in some of these subsets of under the ES and G, which I think has, I mean, if it’s done nothing else, raising the awareness and understanding of what you need to do to take action to look after the planet and society, I think it’s been a really, really useful exercise. I’m still learning, definitely.

Liz Green:

Yeah. Exactly. And so just thinking about accountability here and your various stakeholders, whether it’s employees or it’s your members or other partners, how much accountability do you feel from those different stakeholder groups? Do they call you up and call you on your sustainability credentials or do you have a dialogue?

Nick Turner:

Well, I mean definitely I think… So I should probably confess that I occasionally use the Costa disposable coffee cups. And I reckon when I do that it’s usually because I’ve left my permanent cup upstairs and I need a coffee. But I’ll rarely get back to my desk without someone coaching me on how to be less of an old man and be a bit more greener and think a bit more environmentally. So you get feedback in the moment from all layers of your organization that actually you need to think about how we behave, how we operate because everybody feels it. And our customers are talking about it. I mean, we have half our customer base is farming and they sell their produce to supermarkets. And for example in the UK, Morrisons, which is one of the British supermarkets has said that the farming community needs to form part of their net zero ambition by 2030.

And you think, “My goodness, 2030 is just, feels like an impossible.” But you can imagine the pressure that supermarkets are pushing down onto the farmers and the farmers in insure with NFU Mutual and they will be looking to us to say, “What part are you playing in our carbon footprint?” So you absolutely get pressure from members, from staff, from your own family, from society. And so I think it’s a really good thing to have front and central of the way you operate.

Liz Green:

Yeah, exactly. And I’d imagine it’s a similar story in your organizations?

Hilde Vernaillen:

Yeah, a lot of pressure as well. And you have also the effect of the European regulation. So a lot of industries and companies asking themselves if they will still find a bank that is providing services to them tomorrow, providing credit. And same for insurance. So it’s a lot of pressure and must say not always in a positive way because sometimes it’s a bit too much like-

Nick Turner:

It damages the S.

Hilde Vernaillen:

Yeah, it damages the S and too much at once to absorb by all those industries, especially for the farmers. I think it’s a very tough one.

Robert Otto:

That’s a very tough one, yeah. I recognize all of it. Maybe to add a few examples because I’m going to repeat what you just said. Recently we had, and I was there on behalf of Achmea, we had a group of our clients together with one of their children between age 16 to 24. It was about this topic, it was a very good interactive discussion. And of course the children were asked for their opinion and the parents and also my daughter was asked, and she said, “Well, I’m eating more and more vegetarian but my dad, he don’t want it.”

So I was basically put on the spot. So that’s a very concrete type of pressure. But also very much interesting I have to say. And what we did ourselves, let’s say also too, it’s not the pressure born at ambition, but we’ve put very concrete goals that we want to achieve also as part of our plan. And we published it. And it’s quite difficult then to formulate what exactly you’re going to do by year X, but we did.

So at least there’s a first attempt and it’s together with our annual results. Our view on sustainability, our plan, and also the KPIs has been put into the public, shall to say. So that was also a major step.

Liz Green:

Great on accountability. Wonderful. Well, as time seems to be against us, I’m going to finish off with our last big question and we want to talk about the biggest challenges that are facing the whole industry. So what is it in your opinion that is your number one thing that’s keeping you awake at the moment at night? Hopefully nothing’s keeping you awake, but if it’s on your mind before we go to bed, do share. And also let’s think about this global network we have at ICMIF. How do you think that our global network can start to solve some of these problems by collaborating and working better together? Who’d like to kick us off?

Nick Turner:

Well, I do three things, which I suspect I’m putting words in your mouths as well. The three things that are in my mind at the moment are inflation, which of course is claims costs rising, staff costs rising, expenses rising, and you’ve got to put the revenues up. So rate goes through the book and of course that affects members who are having their own struggle with cost of living. So that’s number one.

Number two is volatility. So the market, the world has become a more volatile place and the volatile nature of the world means that investments have different fortunes and different fortunes translates into a stock market that’s, I mean this year it’s gone up 10%, down 10%, and we’re only as we at the end of March. So that’s huge volatility and trying to manage insurance risks against such a moving target is going to be a challenge for insurance companies everywhere.

And the last one, maybe this is the UK alone, but I doubt it just all of those pressures come to bear on a general dissatisfaction with the political environment within which we operate. And so politicians and governments get, certainly in democracies, a lot shorter chain before they’re voted out or changed. And as we’ve seen any number of prime ministers and chancellors over the last couple of years in the UK alone, which is the kind of instability that we rarely see, but that uncertainty of what’s going to be happening in four or five years translates back into a challenge for us as a long-term business. If you are trying to make investments for the long term, you need to be able to see stability. So actually in that turmoil, being confident about your future becomes slightly more difficult.

Liz Green:

Indeed, yes, I can resonate. How’s that feeling over in Belgium? Is it similar?

Hilde Vernaillen:

I can only agree. It’s very similar. Maybe because of all those reasons. I would summarize it as they need to close the gap, close the protection gap. We’re still not there. A lot of new risks coming up and the total incapacity of governments to give right answers to that. So I think it’s a real huge challenge for the industry. And then keeping insurance affordable for people because of inflation, but not only also because of new risks coming up with people. Sometimes they don’t have any left to pay school books for the kids, so they’re not going to pay insurance in the future if we are not finding other solutions. So keeping insurance affordable.

Liz Green:

Yeah. How about you, Robert?

Robert Otto:

Yeah, well I have to say I’m very much aligned. Maybe I would put number three on number one especially also internationally it’s geopolitical and also countries basically focusing on their own interests more and more. That’s really not a good way to go I think, but it’s not going to be gone soon. Then next to the affordability, we are the number one health insurance company as well. So also maintaining the healthcare systems that we have, which are already under pressure. If I see that some people who, for example, need psychological help can’t be helped, and they have to wait for a long time because we simply don’t have the staff to provide the support, these kind of things, it’s really worrisome. And maybe one other thing, it’s topic with which I also started, that’s the consolidation, which I see in every country and it’s also going to be internationally.

And I fully agree, we have to look as cooperative for other ways to find an answer to that question and we will. But it’s more complicated. But it’s absolutely also something I’m thinking about a lot because I basically see, especially in the European Union, it’s converging to more every year. It’s stepping towards, it’s going slow.

Going towards a single market and it’s asset management or financing of mortgages or search, Google, maybe ChatGPT sometime from now. It’s an international, more and more international game embedded insurance. If you do not have an international footprint, you’re not going to be a partner for an international manufacturer of cars to build insurance inside. But it is a trend that we see. So how are we going together, going to find an answer to that? That’s certainly also one that’s on my mind.

Liz Green:

Good. Well, I hope that we’ve got some ideas here starting to come, how you’re going to be able to leverage our global network at ICMIF. Certainly our vision to move forward is we want to make this a more resilient, safer world for everybody. I believe that we’ve all got the will, and as curators of your information and your visions and your materials, it’s our job I think at ICMIF to try and find a way to create opportunities to try and solve some of these world’s biggest problems. And I agree wholeheartedly about the protection gap. I think that that’s a big one that we could work together to solve. So I don’t think that we have the answers today.

Nick Turner:

Not today.

Liz Green:

But luckily, we do have three more of these sessions planned this year. So we’ll continue this discussion and see if we can start to come to some solutions. But I fear that we’re now at the end of our segment. So all I want to do is to thank Hilde and to Robert and Nick for a really, really great, honest, energizing, and passionate discussion. And we look forward to bringing more of these discussions to ICMIF members in the next quarter. So thank you, guys. Thank you for your time.

Robert Otto:

Thank you very much.

Hilde Vernaillen:

Thank you.

Liz Green:

And I hope everybody has a great day. Thank you.

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