Management by Trust:

The Case of a Dutch

Insurance Company

Bruno Käslin

Peter Maas

Albert Graf

MBA FSI

Module 1

Interpolis Case

Nov. 9, 2012

Page 2

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Agenda

Market perception / expectation

Concept of trust

Research methodology

Case Study: Interpolis

Results

Managerial and research

implications

MBA FSI

Module 1

Interpolis Case

Nov. 9, 2012

Page 3

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MBA FSI

Module 1

Interpolis Case

Nov. 9, 2012

Page 4

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„Insurance companies are huge and clumsy

organisations who are just not there when

you need them.“

which means: one never knows

what to expect!

‘and if they help you they do it very slowly’

‘they are all the same’

‘you’re just a number’

‘no idea about what is covered’

‘they make huge profits, that are paid by us, the customers!’

‘you have to pay attention to the details!’

Market perception

MBA FSI

Module 1

Interpolis Case

Nov. 9, 2012

Page 5

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Market expectations

‘I want them to keep their promises!’

‘actively think together with me!’

‘concrete problem solving’

‘offer clarity, which enables me to

make the right choice’

‘tell me what‘s it about!’

‘they have to help me when I really need them‘ Trust is of

utmost

importance

in an

insurance-

client-

relationship

MBA FSI

Module 1

Interpolis Case

Nov. 9, 2012

Page 6

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The construct of trust Trust is defined as an accumulation of overall positive expectations which are commonly

shared among several relationship partners (individuals, groups or organisations) and

which is borne by the confidence, that no party will

take advantage of / capitalize on / exploit the other parties‘ vulnerability.

Competitors Insurance company

Clients

Employees

3

1

2

1 Culture of

trust

2 Experience-

based trust

3 Reputational

trust

4 General trust

Politics

Media

Shareholders

Social environment

4

Source: Hubschmid 2002

MBA FSI

Module 1

Interpolis Case

Nov. 9, 2012

Page 7

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Value creation through trust: three levels

Customer

Employee Company

Source: Irons 1992

Culture of trust

• History and future of organisation

• Success of organisation

• Organisation of work

• Style of leadership

• Politics of service

• Company culture

Reputational trust

• Positive image

• Reputation

• Third parties

• Branding

• Ongoing

communication

• Size

• Shared values

Experience-based trust

• Length of relationship

• Contact frequency

• At a personal level:

• Integrity

• Competence

• Expertise

• Openness

• Fairness

• Sympathy

• Affinity

• Reciprocity

• etc.

MBA FSI

Module 1

Interpolis Case

Nov. 9, 2012

Page 8

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Research Methodology: Case Study

Methodology:

Case Study Research (Eisenhard)

Qualitative methods including interviews, desk-research, company headquarter

visits

Goals:

What is the concept of trust in the insurance industry?

How should an insurance company proceed in raising the general level of trust?

How does a business profit from a higher level of trust?

Interpolis:

One of the largest and most innovative providers of insurance, old-age

provisions and staff availability services (reintegration, absenteeism,

occupational health and safety, etc.) in the Netherlands, also active in Ireland,

Luxembourg and Portugal

6,000 workers at Interpolis

Turnover of € 5 billion euros in 2003

Interpolis has been part of the Rabobank Group since 1990 and is a co-

operative membership institution

MBA FSI

Module 1

Interpolis Case

Nov. 9, 2012

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Interpolis: A Dutch Insurance Company

Trust-Level 1: Company and employees

– Corporate culture: The four „V“s:

• Vertrouwen (confidence, trust)

• Vrijheid (freedom)

• Verantwoordelijkheid (responsibility)

• Verbondenheid (solidarity)

– Building an inspiring „micro city“ environment: working,

conferencing, discussions, meeting people, relaxing and

eating

– Internal communication

– Employee selection

Customer

Employee Company

Employee Company

MBA FSI

Module 1

Interpolis Case

Nov. 9, 2012

Page 10

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MBA FSI

Module 1

Interpolis Case

Nov. 9, 2012

Page 11

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Interpolis: A Dutch Insurance Company

Trust-Level 2: Employees and customers

– Main goal: Creation of customer value

– Each customer is cared for by one of the Rabobank

branches

– Clear and open communication with clients

– All insurance policies are formulated not in an

incomprehensible judicial jargon but simply and clearly

– Claims-management:

• Goal: 1 day settlement

• No detailed checks

• Highly-sophisticated fraud-detecting systems

• Countrywide database for fraudster

Customer

Employee Company

Customer

Employee

MBA FSI

Module 1

Interpolis Case

Nov. 9, 2012

Page 12

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Interpolis: A Dutch Insurance Company

Trust-Level 3: Company and customers

– Branding: „Interpolis. Crystal clear“

– A very transparent range of products, e.g. the

all-in-one-policy

– Customers are seen as members and they are able to talk

about their needs and wishes, dislikes etc.

Customer

Employee Company

MBA FSI

Module 1

Interpolis Case

Nov. 9, 2012

Page 13

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Interpolis: Some impressions

The working environment

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Module 1

Interpolis Case

Nov. 9, 2012

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Results

Interpolis attributes a large part of its market success to the existence of a culture of trust

Ability to communicate actively with customers and employees:

Satisfied customers

Satisfied employees

A company culture has been developed, which promotes innovations, lowers costs and significantly contributes to a positive performance

30% more employees compared to traditional office

Not a restaurant with 1.500 seats

Less absence, less employee turnover

Steady growth

MBA FSI

Module 1

Interpolis Case

Nov. 9, 2012

Page 15

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Implications...

... for researchers A comprehensive research model on management by trust in

the insurance industry must consider different levels of trust: internal culture of trust, reputational trust, experience-based trust

Open and clear communication – among other factors – has a great impact on internal and external trust relations

Implications are limited: Case in the Dutch insurance industry

... for managers Trustworthy relationships sustainably enhance the company‘s

success and lowers costs of control

Insurance companies should not only care about trustworthy shareholder relationships but also cultivate an internal culture of trust and foster trustworthy relationships with clients

MBA FSI

Module 1

Interpolis Case

Nov. 9, 2012

Page 16

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Debriefing: Learnings from the Interpolis case

When you think back to yesterday’s visit...

Why did Interpolis embark on this change journey?

What operating model does Interpolis basically pursue (OpEx, customer intimacy, product leadership)? Why?

Which are the success factors of the Interpolis story?

Which aspects of the Interpolis case would you like to translate to your organisation? What could enable the success of such a transfer?

MBA FSI

Module 1

Interpolis Case

Nov. 9, 2012

Page 17

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Thank you for your attention!

Questions?