Cooperation and ecosystem-thinking is in the veins of mutual insurers

Cooperation and ecosystem-thinking is in the veins of mutual insurers

Written by Roger Peverelli and Reggy de Feniks - Founders The DIA Community on 6 Feb, 2019

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“It’s in the DNA of mutual insurers to work together as members, but also with society and the organisations around us. Cooperation is in the veins of mutual insurers. That’s why they are perfectly positioned to play an important part in building ecosystems”, argues Joost Heideman, until recently CEO at Univé.

Univé is a medium sized insurance company in the Netherlands, established back in 1794. It is a mutual company that comprises of nine regional insurance companies and is amongst the largest and most trusted insurance companies in the Netherlands. Univé is highly involved in the Dutch ecosystem but in a very innovative way. In this interview Joost Heideman, until recently CEO at Univé, shares how Univé is cooperating to build ecosystems. Prior to taking the helm at Univé, Joost had several management and board positions at ING Group, both in the United States and in the Netherlands. Moreover, he was the chairman of the Platform of Mutual Insurers, a board member of the Dutch Association of Insurers and member of the international board of AMICE, the Association of Mutual Insurers and Insurance Cooperatives in Europe. Joost left Univé this January and is now active in connecting the insurtechs with established insurance carriers. Joost Heideman was one of the thought leaders who shared his vision at the 2018 edition of DIA Munich. Expect a similar level of keynote speakers at DIA Amsterdam 2019. DIA Amsterdam 2019 will take place on 25-27 June. Tickets are still available. Just click here to register.

As a mutual company, cooperation must be Univé’s DNA! Can you elaborate how that works out in practice?
Joost: “We always want to work together as members, but also with our society and the organisations around us. Being medium sized and solely based in the Netherlands Univé doesn’t have the deep pockets that some of the bigger firms do. So, by definition, we need to cooperate with others who cherish on the one hand the strong brand we have and put huge value in that, and, on the other, our members who are very committed to our brand. We would like to leverage their expertise and skills to build something together in terms of innovation. That is what I have been doing the last couple of years, to really bring us as traditional mutuals to the new age, by promoting and implementing innovation. And we need to do it with other companies, because that is far more effective than doing everything ourselves.”

If you look at it from a consumer perspective, there is an idea that insurers are moving from products to services, and, most probably, those services require ecosystems more than anything else. Is that also you experience?
Joost: “Yes, let me give you an example. Univé is very strong in home insurance, and always has been, it is our origin basically. Rather than only providing the insurance part though, we more and more aim to play our part in providing and maintaining a safe home experience. After all, by preventing damage, or at least reducing its consequences, we reduce the insurance risk and keep our premiums affordable. And more importantly, we save our customers a lot of trouble and avoid potentially traumatic experiences for them from happening.
Hence, we want to enter the space of prevention of burglary, for example, or water leakage or electrical damage. We want our customers to have a sense of safety at home, but also to connect them with other members in the neighbourhood.
By establishing a community of our customers with their neighbours, including those who are also members of Univé, we basically create a bigger sense of safety in which insurances are only a part of it. To be able to do that, we need to partner with many: with the neighbourhood, with our members, with installation companies, with handymen, with firms that offer sensors and alarm systems, etcetera. Here we can start to play a role in sort of establishing and influencing an ecosystem which we could never control or manage just by ourselves.”

When you read about ecosystems, the most obvious platforms that are always mentioned are mobility, home, and work. In our view, it is about all the different moments throughout the day. What are the platforms or ecosystems that you think will be the winning ones or the most important ones for the next decade?
Joost: “Your question really gets me thinking. We dream about ‘winning’ as insurance companies, but we might not be ‘winning’. Look at the emergence of the big tech firms, who obviously have a good play, but they also have some issues today. Thinking from a consumer’s perspective, relevance and trust are also very important. Who uses or manages their data, is something they care about and is increasingly relevant. But coming back to your question, of course my dream is for Univé to be the goose that will lay the golden eggs, but there are many other players in the field. Especially big tech firms such as Google and Amazon in the Home space, who are quickly building positions. But also  construction and utility companies in that same space; or car manufacturers in mobility.’

Could you provide an example?
Joost: “Sure. Univé is currently piloting an energy cooperative. Univé is founded by a small group of farmers in the Netherlands at the end of the 18th century. Today, we have about 15,000 farmers in our portfolio. Many of them still have issues with asbestos in their stables, barns or on their roofs. In compliance with Dutch regulation, all asbestos in buildings needs to be removed by 2025. As we see more often, it takes a while for this process to get traction. As we are insuring many of these barns and stables, we are very concerned about this issue as well. Univé therefore joined forces with some of these farmers to think about ways ‘to fix this together’. As a result, Univé now finds itself at the start of carrying out an initiative that removes asbestos from roofs and replaces them by solar panels. With an investment plan set up in cooperation with numerous partners, we are building the solid foundation to have these farmers generate solar energy that not only fulfils their own needs, but also will supply enough energy for other Univé households in the area. You’ll understand that the local element in generating this energy is very much appreciated by both the provider and its user in the region. This way, we are establishing an energy community, or cooperative, of supply and demand while taking care of this big asbestos issue at the same time. Of course, we work with energy installation companies to make this happen. However, we are directing and organising the whole set of parties involved, who all have an interest in a piece of the total cake. Nobody is after the whole cake, and I think that is an important notion. There can often be someone who wants to get the whole cake, but then it is much more difficult to get traction and good, reliable cooperation. But in this example, it is clear that everybody has its own stake in it. And for all I know, in a couple of years we may have transformed some 15,000 farmers in this important asbestos and energy transition and who knows what more!”

It’s very interesting you did not once mention the word insurance in your explanation of the concept.
Joost: “No, indeed! It is very indicative of where we are heading. We have 1.5 million members that we are proud of, and who are in large part proud of us. We want to be, and stay, relevant for them, also in new spaces. And this energy example is clearly a new space. Of course, potentially, it is also a good new source of income for us, because in these new concepts and business models there is new margin to be made. Equally important, from a regulatory perspective; it will not have the same capital treatment. So, it is a nice and attractive margin compared to that of insurance premiums.”

Quite an extraordinary way of ecosystem-thinking, that also opens up new streams and new business models. Univé has taken some very interesting initiatives. Can you share a bit about how you, as a mutual, are exploring this phase and getting the most out of it?
Joost: “Yes, interestingly enough, a recent study from A.M. Best, the US-based rating agency, had a headline: ‘Why insurtechs and small mutual P&C insurers may need each other’. The mutuals might be a forgotten segment for insurtechs because they work alongside firms with deeper pockets. But in these small to medium sized mutual companies there are tons of experience in insurance from the past, but just a little less in terms of innovation and technology. I think we as mutual companies are very much open to working together with insurtechs.”

So, what you are saying is that there is a clear need and demand for smaller, medium sized insurers, especially mutual ones, to work with insurtechs? 
Joost: “Definitely. I would certainly recommend insurtechs to go out and look for these mutuals, because they would be happy to invite them over. We have done so at Univé, and we are working together with a few of them now. Typically, one can work well with people who see the world in the same way. And that is what we are looking for. We have a specific kind of DNA. We really care about our members, not customers, but members. We aim to improve and ease their lives. Insurtechs have a similar purpose, which is why they have a lot in common with us. We are looking for technology skills, but also for a match in terms of purpose and how you want to change the world. For us, that is really the differentiator.”

What would be the key success factor going through all your experience in developing and nurturing ecosystems to share with our readers?
Joost: “In my view, change in leadership among insurance companies is very much required to make all of this happen. We need to recognize this and do it differently. Transformation in leadership thinking is of key importance to make any of this happen.”

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