hmea_ BY FRENKE BOLT Transforming the insurance industry the Achmea way (ON A SUNNY day in February 2014, Ellen Faber, Chris Schonewille and Milojé Stevanovie, CEO and board members of Achmea Non-life, watched the new Ol- ympic 1500m speed skating Champion, Sven Kramer, ‘celebrate his victory. They smiled, feeling the euphoria Of the winner as if it was their own victory. “This mo- ‘ment reminds us of the Great Place to Work festival last week, where Achmea Non-life received the first price in the category Great Place to Work for companies larger than 500 employees. That was such an amazing mo ‘ment”, says Faber with a twinkle in her eyes. For Faber Schonewille and Stevanovic, that ttle was the erown on the hard work of the past $ years, in which they and their teams transformed Achmea Non-life into a state of the art insurer. One of the underlying success factors was the transformation of the existing IT-organization into a Business Change Enabler called Business Change & IT (BC&IT), initiated by Stevanovie. Stevanovic, Director Business Change & IT, is a very ambitious man. He wanted to win, and now he and his high performance team had won. Admittedly the success of the company has even surpassed his expectations. It seems like all the pieces have really fallen into place Since the fall of 2013, Achmea has been financially outperforming her competitors. Benchmarks indicate that Achmea has the lowest average costs per product, 88 well as the highest turnover and profit of all non-life insurers, The customer satisfaction ratings have stead ily improved since the beginning of the transformation hbrorg | June 2009 | Harvard Business Reviewi ' | i | | to an all time high of 8.9 last January Achmea Non-life also won the gold medal in the “Great Place to Work” competition. This showed that Achmea is not only a company that consists of change enabling employees who have made the insurer a world class. per- former, but that it also did an outstand- ing good job in selecting, developing and retaining the best employees and in creating a challenging and inspiring place to work took quite a transformation to reach, this enormous peak. It all started 6 years ago, when Faber was announced CEO of Achmea Nom-life. Launching a huge change program called Hartend (Hearts4), Faber wanted the onganiza tion to make a radical shift to become a state ofthe art insurer. At the beginning of the Harten4. program, Stevanovie Joined the board to take the lead in transforming the IT organization 10 enable the desired change. Together with Faber, Schonewille and. their Non-life colleagues within the other distribution channels Rob Coolen en ‘Ton Zumbrink, Stevanovic developed ‘an ambitious plan to become the great- est non-life insurer in the Netherlands. ‘They were inspired by a documentary showed by Netwerk, a Dutch news program, called De Wetten van het Winnen (The Laws of Winning), that ‘was aired on television in the lead up ‘o the Olympic Games in Beijing 2008. Stevanovic dreamt of a big tumaround in the chaos of TT-systems that had troubled the effectiveness of the Ach- mea Non-life operations. While an ambitious plan formed in his head, he decided that he wanted to lead the nee essary transformation, Company Background In 2009 Achmea was a large, leading organization in the insurance industry in the Netherlands. The company con- sisted of several “product divisions’, which developed different types of products, and several ‘channel di sions’, which handled the sale of the products to customers. Non-life was Vision BC&IT Pere Smt Rieu ree ora ie ete ys er nee penne eed pa er) aor ieee pee ESSeN eines erry Srey Strategic Value Vision BC&IT foreone eta oer erry Se eed coethnics Cee cs Perea ce marketing teeta rieeperen ries aes) ran) pen syste trestenee eet fone of the main markets Achmea was operating in. Since the development and the sale of non-life products were spread over more than one division, the board of Achmea decided to create a special domain for this market: Do main Now-life. Since Achmea Non-ife hhandled most of the non-life transac tions within Aechmea, it was in charge Harvard Business Review | hbrorg | June 2009 (of making this domain a big success. Over the past several decades, compa- nies have been aequired by or merged with Achmea. Because most of the acquired brands performed well, they were kept intact, As a result they kept their own names, their own employ- ces, their own systems and their own cultures. It also meant that there wereno large scale redundancies and that it impossible to integrate different cli= Stevanovie explained of the BC&IT customers were sill served by the ent bases and therefore the different management team selection. Having original, familiar brands. At that ime brands could not make opimal use of the management team selled, they in ‘Achmea Non-life was avery large and each other's resources tiated a vision and strategy process in impressive player in the market. They _* Economies of scale were negatively which they wanted to lay the organi- possessed about 22% of the non-life affected by the companies diversity as zation’s foundation, aligned with the Market shae, had a decent customer well ‘Achmea Non-lfe’s vison and strategy. satisfaction rating, and their employee © Clients were asking for more trans-Stevanovie invited &Samhoud con- satisfaction was well above average. parency, which was complicatedby the sultans, also involved in the overall Besides that, some of the brands had disparity in the systems change program Harten, to facilitate been very successful in marketing as Eventhough most employees did not the process of formulating an inspiring was shown bythe many prizes thal they yet fel the sense of urgency, the Board and challenging vision and strategy tad won with their humorous commer- of Achmea Non-lfe could no longer &Samhoud facilitated several work- cials, Since the numbers seemed sats- deny their suffocated situation. They shops in which first the management fying and the marketing prizes made people proud, nobody expected that beneath this sunny surface a troubling and threatening situation lurked. The use of these models. helped Although at first glance the numbers aoe were satisfying, other gues told a us to focus on our core capabilities very different and indeed alarming - ep story, Tumover and profits had de- and to choose the right direction clined drastically over the past year. Worse sil the turnover in 2008 had declined, mainly asa consequence of the credit crisis that was troubling the financial work, while costs had gone initatedthe Hartené program io enable team and later a selection of employees up. This meant that the profits of the the desired tum around. This meant a and several important customers were last couple of years had turned into a teambuilding program for the board, — challenged o help formulate this vision substantial loss in 2008. And it ooked developing a winning vision and strat- and strategy. Joris de Brljne, Manager lke the recession had not yet ceased. egy forthe different brands of Achmea BCAIT: “We used Jim Collins’ vi- On the contrary, costs were still rising, Non-life, teambuilding and leadership sion model to define our mission, our while the client base was more or less development for all managers and op- so called “Big Hairy Audacious Goal’ stable, which resulted in an ever de- timizing the internal processes. This and our most important values, quali- clining profit. all was initiated while maintaining the ties and assets, just like it was done for For Achmea Non-life it was hard to running business. Stevanovie was in Achmea Non-life. Jim Hesket’s strate- compete with cheap newcomers, who charge of the optimization of the in- gic value vision helped us to define our were basically buying market share by ternal processes, which among others target market, our value proposition offering products and services below meant transforming the (T-organiza- and our operational and channel strat- cost price. There seemed to be only tion into a real Business Change Ena- egy. The use of these models helped us ‘one solution: Achmea Non-life had to bler that could help Achmea Non-life to focus on our core capabilities and to reduce her costs to be able to compete once again become a winning player in choose the right direction. By involv- inthis tough market, One of the main the market. BC&IT was born ing not only the managers, but also factors in the cost structure was the employees and customers in this proc- abundance of systems that the compa- Business Change and IT ess, we came toa more clearly defined ny still had running. This complexity An inspiring vision and a vision and strategy. Moreover, we cre- caused several problems: {focused strategy ated a fot of commitment to the vision mployees had to learn fo work with “The first thing we did was to make and strategy simply by letting them different systems, which brought down sure we had a winning management have their say. their efficiency, whilst also causing a team. We knew the game we were Eric Sluis, president of the Achmea Tot of frustrations by having to con- about to play would be exciting and IT department: “BC&IT used to focus stantly change systems, very tough, which meant we had to on daily operations and execution. We © The lack of uniform systems made have the right people on the field”, wanted to change their focus towards @ hbrorg | June 2009 | Harvard Business Review