What happens when a French Revolution storms the UK? Chris Wheal finds out how Groupama will manage its structure, service and information in the face of international growth....
If Groupama is to be believed, we are about to witness a second French revolution. But don't worry, nobody will be guillotined. In fact, the French insurer insists nobody has lost their head at all. It is all part of a rational rethink, reorganisation and re-branding exercise for its international business. And for Groupama, international means the UK.
This time, they are not waiting for July 14. From today, June 1, Groupama insists it will be storming the UK consumer equivalent of the Bastille. It will free consumers from the prison sentence of product-led insurance policies and will offer them whatever protection they seek. No longer will they be bound by annual renewals. There will be no need to complete new direct debit forms. A household policy will cover maintenance and decoration and a motor policy will cover regular servicing and wear and tear repairs. Groupama will even proactively contact its customers to remind them when maintenance is due and arrange for the work to be done, including providing replacement vehicles dropped off at the customer's door. Similar transformations are planned for commercial lines customers too.
No revolution would be complete without a slogan and Groupama's revolutionary zeal comes from a new mission statement: "We aim to be a highly focused, disciplined and respected insurer that is the preferred provider of insurance solutions for customers."
And it has backed that up with a simple manifesto that it calls its four cornerstones. These are: customer focus – to ensure an absolute commitment to meeting the needs of the customer; efficiency – to deliver the very best service to customers as quickly and cost-effectively as possible; knowledge management – to make use of the information available to the group so as to develop a business rich in knowledge; people – to develop and empower the workforce for mutual benefit.
This revolution's Marat, Danton and Brissot are Groupama chief executive Tony Lancaster and joint managing directors Tim Ablett and Stephen Hartigan. "Our industry is undergoing massive change and Groupama will not be immune. We need to be prepared and to ensure that our business adopts the customer focus necessary to ensure success. We see it as essential to build new and different insurance solutions to meet these rapidly changing needs. We will be working with our partners to ensure that we deliver," Lancaster says.
How the revolution will work
Buildings will be razed to the ground. "We're moving into Minster Court and this building is being demolished," says Hartigan, sitting in Gan House, near Monument. And old business structures are being torn apart too. The company will be run in two halves. Ablett will take control of personal lines while Hartigan will look after commercial. "We've been very careful not to create two towers. There is some friendly rivalry but a lot of understanding of each other's business and there are projects based on our four cornerstones that cut across the whole business," says Hartigan.
Within that regime, the old Gan will become Groupama Insurance Company and the old Lombard will become Groupama General Insurance Company. The firm's London market marine business will switch to a UK office of Groupama Navigation et Transport and the parent company's reinsurance operation Sorema will open a London office too to run the UK reinsurance business.
But the test of the revolution's lasting effect will be the way the company proposes to run. It wants to get away from commodity products in both personal and commercial lines. And it wants to tailor products and cover to suit each customer and to make changing cover and adding new cover to the package as simple as possible. "We have to keep raising the standards," says Ablett. "An athlete doesn't suddenly jump over a seven-foot bar. He trains, he practises and he starts by jumping a five-foot five bar first and then raises the bar. What we have to do is constantly raise the bar."
Groupama insists the revolution will be populist. "We've been doing market research, broker research, customer research and internal brain-storming. We're working out how the customer of tomorrow is going to come to us," says Ablett. "And it embraces the broker and the corporate partner or affinity group as customers," chips in Hartigan. Already that research has thrown up some challenging information. "The way the customers will come to us will change and what the end user wants is often different to what the broker tells us they want," says Ablett.
But understanding brokers is a skill in itself, Hartigan insists. And that is why Groupama's idea of service standards will not be a simple list of times and dates by which it will do specific tasks. "We will be setting relevant service standards and that does not mean fixing set times for different communications. Does the broker want us to quote straight away or at the last minute? Does he want us to quote to win the business or just to set a benchmark? There are a lot of games people play and we have to appreciate that," he says.
The company also insists that its revolution means better understanding its own information. It wants to ensure that each snippet of information is assessed and then used and shared appropriately so that the whole company can benefit. "Over the years we've got very good at providing management information. We have developed huge amounts of data, but I now have so much management information in my office that I don't know what to do with it," says Ablett. The plan is to better filter information and then spread it throughout the company, both vertically, and horizontally.
There should be a few fireworks along the way. Groupama is on the look-out for some purchases to expand, especially into areas where there are gaps in its coverage. But the company insists it will not be buying anything just to increase in size – it has already looked at a few propositions and turned them down.
"We will be putting profit before growth. The top line is not important. We want consistent, moderate growth in returns on equity across insurance cycles," Hartigan says. He likens the UK business to a casse regionale, the 23 regional grouping of Groupama's 10,000 local mutuals in France.
And that is a key to the Groupama revolution. "We want to be international but not in the same way as others understand international. It doesn't mean servicing giant global companies; it means being significant indigenous players," Hartigan says.
Allons enfants de la Patrie, le jour de Gloire est arrive.