This case has been written based on company visits of Vlerick Business School and University of St. Gallen at Interpolis. The authors have conducted field reseach, reviews and interviews with representatives from Interpolis (for which they like to thank Adriaan van Engelen, Gerard van Laarhoven and Arné van den Boom). This has been combined with an earlier case-study on Interpolis by J. op ‘t Hoog and G. Haan which has been published in Kemperman, J., Geelhoed, J., Op ’t Hoog, J. (2015) Briljante Businessmodellen in Finance, Academic Service, Den Haag.

Copyright © 2016 Vlerick Business School, Belgium. No part of this publication may be copied, stored, transmitted, reproduced or distributed in any form or medium whatsoever without the permission of the copyright owner.

CASE 2016-05-C

INTERPOLIS: BECOMING THE MOST TRANSPARENT AND

TRUSTWORTHY INSURANCE COMPANY

CASE

KURT VERWEIRE, JEROEN KEMPERMAN, JENNIFER OP ‘T HOOG,

PETER MAAS

Tilburg (the Netherlands), March 2010. Gerard van Laarhoven, a senior manager at Interpolis, is

scrolling through his powerpoint presentation. Within ten minutes he has to present a new concept

to the Executive Committee that could mark a next step in Interpolis’ journey to be the most

transparent and trustworthy insurance company in the Netherlands. Together with his team, Gerard

has worked out a new prevention concept that can significantly transform the Dutch insurer.

The main idea behind this new concept is that insurance is not the only solution to managing your

risks. Interpolis will now emphasize prevention as the main solution to risk management with the

slogan: “To prevent is better than to insure.” With the new concept, the company will go beyond

regular prevention but also open prevention shops and advise its customers not to insure everything.

Gerard actually wants to convince his Executive Committee that Interpolis should actively contact

customers to reduce their insurance coverage. This might have a significant negative impact on

Interpolis’ premium volume, which is the main source of revenues for the Dutch insurer. But if the

company wants to stick to its promise of being crystal clear and trustworthy, it has to put the interests

of the customers first. This is what customer centricity is all about. And this is going back to the roots

of the company…

Distributed by The Case Centre North America Rest of the worldwww.thecasecentre.org t +1 781 239 5884 t +44 (0)1234 750903All rights reserved e info.usa@thecasecentre.org e info@thecasecentre.orgcase centre

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CASE 2016-05-C

The roots of Interpolis

Like many insurance companies Interpolis has a mutual background. Mutual

insurance companies are owned by their policyholders and their purpose is to

manage their risks in the best possible way. Interpolis’ roots can be traced back to

the Catholic agricultural cooperatives. Back in the 1950-60s, farmers in the south

of the Netherlands are organized into Catholic farmers’ unions, who all set up their

own cooperative institutions – banks, a pension fund and insurance companies, which were originally

mutual fire insurance companies. In 1969 the mutual insurance associations, the farmers’ associations

and the life insurer merge and create Interpolis. In the subsequent years, Interpolis acquires other

insurance companies – Hagelunie (1972), Twaalf Gewesten (1985) and Sterpolis (1993) – and expands

its product range into non-life insurance.

In 1990 follows a merger with Rabobank, one of the leading banks in the Netherlands. This bank also

has its roots in the agricultural business and is the natural partner for Interpolis to form a stronger

financial group.

At that time, Interpolis has lost most of the cooperative spirit and has become a big organization

focusing on managing insurance policies rather than serving customers’ needs. The financial results

are bad and the company is in dire straits. Each week, the company loses 45.000 Euro in car insurance

alone. Both the customers and its shareholder, Rabobank, are dissatisfied with the cooperation and

realize something has to happen. In 1993, Rabobank sends director Jan Vullings to Interpolis and

together with colleague Piet van Schijndel they formulate a clear ambition to get the company back

on track. Rabobank sets the following targets: (1) Reduce the costs with 30-50 percent, (2) reduce the

claims with 10 percent, and (3) increase the satisfaction of the employees, the customers, and the

shareholder.

Vullings and Van Schijndel realize that those goals require a radical transformation. They have to make

a giant leap to become future proof and they want to do this is such a way that the mutual roots of

the company are not destroyed but reinvented. As part of the change programme ‘Solid & Certain’ (in

Dutch: ‘Vast en Zeker’) the company plans to reduce its workforce from 2.400 to 1.800 employees.

But Piet van Schijndel admits this is not enough:

We have reduced the number of employees and our company reduced in size. Our profitability has increased,

but our fundamental problems remain the same: our customers are very unhappy with our way of working.

Why did we end up in this situation? We have realized this is not just us, this is an industry-wide problem. The

insurance industry has a totally wrong image of society. We don’t trust each other. The industry is based on

checks, audits and controls. Insurers see and treat their customers as crooks. But we wonder: What if we build

an insurance company where trust is the main pillar in the relationship that the company has with its

customers? What if we assume that customers can be trusted? Can this be the basis for a new insurance

concept, a true company transformation?

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CASE 2016-05-C

Interpolis: A crystal clear promise to the customer

In 1995, Interpolis starts with a radical transformation program that will direct the company towards

a different strategic track. Interpolis’ strategy will be based on openness, clarity, and mutual trust. The

company’s guiding principle becomes: “Give trust to gain trust.” Insurance is made ‘crystal clear’ and

it’s Interpolis’ ambition to be the first company to make insurance plain simple through simple

communication and relevant solutions. Interpolis states that it will always stick to its promises – “a

promise is a promise” – and will be open and honest: customers will know precisely where they stand

and will encounter no (negative) surprises after reporting a claim. This is a big statement in the

insurance industry; this is customer centricity avant-la-lettre.

The transformation program consists of three pillars: (1) direct claims settlement, (2) direct insurance

policy subscription (‘on your doormat within 24 hours’), and (3) the introduction of package policies

(All-in-One-Policy and Company Compact Policy). Interpolis develops new products that are clear and

simple. Policy conditions are easy to understand and should be summarized in one or two pages. The

small letters in the policies are skipped, and the company starts to standardize and simplify its

products.

The insurer also changes its claims handling process. Before the transformation this process is

characterized by aloofness, formal written communication and a pile of rules - a typical insurance

practice in the 1990s. For instance, when a customer calls to report a damaged ski, the insurance

company’s intermediary asks the customer to send the broken ski as proof. The result is an Interpolis

vault full of customer property and a growing sense of mutual distrust. With the new strategy,

Interpolis will now say: “You can leave the receipts at home. We believe your story.” Employees will

no longer argue with the customers but show empathy and a positive attitude to solve the customer’s

problems. Attention is paid to having a real warm contact and ensuring that the company puts the

right person on the phone who can help as fast as possible. And the company immediately pays out

the regular claims after hearing the customer’s story during a telephone conversation.

All this starts on a small scale: five Interpolis employees in the back office try out the concept within

one of the 700 local Rabobanks, who are the key distribution channel of Interpolis. There is no business

case, there is only a deeply rooted belief that this can work in practice. From the beginning, customers

react very positively, so the management team decides to roll out the project to all local banks. At the

end of 1996, more than 100 local Rabobanks have subscribed to the new insurance service concept.

During the next year, the other local Rabobanks all adopt the new insurance program. With the rollout

to the other local banks, Interpolis gradually improves its knowledge and skills to be a truly transparent

and trustworthy insurance company for its customers as well as for its distribution partner.

While Jan Vullings, Piet van Schijndel and their colleagues face an enormous challenge, they can build

upon a unique position in the market due to their strong ties with the Rabobank. Like in many mature

insurance markets the sales of insurance products via bank branches is important in The Netherlands

and Rabobank is by far the largest insurance intermediary in the country. Interpolis is the main supplier

of Rabobank’s insurance products and this offers the basis for a true insurance and banking

partnership. At that moment, Interpolis holds a significant pension and life insurance portfolio and

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CASE 2016-05-C

also has become the market leader in property and casualty insurance. The company also offers

occupational health and healthcare insurance. Interpolis serves private individuals and business

customers, both SMEs and large corporate customers. Apart from a few large competitors, such as

Nationale Nederlanden and Delta Lloyd, the main competitors are smaller players with a limited range

of insurance products or serving particular customer segments. In contrast, Interpolis offers a broad

range of insurance products, and most customers have a mix of these products.

In the Netherlands, the most important distribution channel for insurance are independent brokers

who sell products from various insurance companies. In reality, this combination of products often

means that some risks are not properly covered while other risks are overinsured. Interpolis, through

its alliance with Rabobank, can offer more integrated insurance solutions to its customers.

Implications for the organization on the delivery and operations

What does is take to live up to all these promises and to deliver a value proposition of trust and

transparency? The top management team of Interpolis realizes that ‘being crystal clear’ requires a

company-wide transformation that affects all business lines and functions.

New product development. Interpolis starts to offer integrated non-life insurance packages to its

retail and business customers: the ’All-in-One Policy‘ in 1997 caters to the needs of the retail

customers while the ’Compact Corporate Policy‘, which was launched in 1998, serves the needs of the

business customers. Both policies are comprehensive insurance policies: customers who buy various

insurance products get a discount up to a maximum of 12 percent. At the same time, customers save

time as the buying process and the administration of such an integrated policy is smoother and less

complicated.

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CASE 2016-05-C

Exhibit 1 – The All-in-One Policy

Communication with customers. Interpolis also drastically improves the way it communicates with its

customers. The company develops a clear marketing strategy and a lot of attention is paid to building

a consistent brand. Since the end of the 1990s, the main message in the commercials is to make

insurance crystal clear. Interpolis makes tangible what is slippery. Crystal clear solutions are the core

theme in every marketing message. The company is very clear what this means:

“You can leave your receipts at home, we believe you.”

“One telephone call and you know exactly where you stand.”

Over the years, the meaning of crystal clear deepens and expands. From 2005, the theme changes to:

“Interpolis is the first insurance company that understands money doesn’t solve everything.” This

means that Interpolis offers extra services to make the claims process even more easy and less

cumbersome. Interpolis offers the customer several options when they face a claim:

Pay: “Buy a new one right away, the money is on its way.”

Repair: “We send ‘Interpolis guys’ because money doesn’t solve everything.”

Replace: “Our webshop offers many replacement products.”

These marketing campaigns work very well. Interpolis experiences an explosive growth of brand

awareness and wins several prizes for its marketing campaigns.

There have, however, been times when the choice to be crystal clear led to painful product decisions.

Near the turn of the millennium, Interpolis – like many of its competitors – sold unit-linked insurance

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6

CASE 2016-05-C

plans. A unit-linked insurance plan is a product that unlike a pure insurance policy combines a life

insurance with an investment product. In the Netherlands, those products were mainly used to save

for the repayment of a mortgage. In hindsight, this wasn’t a very transparent product and definitely

not beneficial for customers at the moment that stock prices rose less than anticipated. Interpolis was

one of the first companies to stop selling this product and to start making arrangements with its

customers.

Overall, this delivery model works well, as is demonstrated in Exhibit 2, which shows the evolution of

the commissions for Rabobank for selling Interpolis insurance products.

Exhibit 2 – Rabobank commission revenues from Interpolis (non-life)

Operations and administration. Interpolis not only changes its communication and delivery model, it

also changes its complete back office processes in operations and administration departments. A value

proposition like “You can leave your receipts at home, we believe you” has huge repercussions for the

back office of the organization. It requires a streamlined organization, where processes are well-

defined and aligned. So the company decides to redesign its processes and maps out customer

journeys, which describe the processes that a consumer is likely to go through when buying an

insurance product or settling a claim. Employees are actively involved in this process. The overall goal

is to simplify products and make processes more efficient – faster, cheaper, and better – so that

customer satisfaction increases. Doing things the first time right avoids discussions and

misunderstanding with customers.

From then on, the company also reviews its most important processes, such as claims declaration, and

communication with customers, in order to identify process improvement opportunities. The

managers challenge the employees to do things faster, smarter, and better. For example, the time for

claims handling is reduced from 3-5 weeks to 10 minutes. Interpolis embraces the Lean Six Sigma

methodology, a methodology that relies on collaborative team efforts to improve process

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CASE 2016-05-C

performance by systematically removing waste. Interpolis uses customer feedback and process

methodologies, such as DMAIC (which stands for Define, Measure, Analyze, Improve, and Control), to

make processes more efficient and reduce lead times for the customer. The company spends a lot of

attention to communicate successes and to involve managers and employees in this process. In this

way, Interpolis is standardizing its processes and reducing exceptions for customers. The key to being

trustworthy and crystal clear is predictability of outcomes and simplification of products and processes

so that customers and employees know exactly what they to expect and what to do. The back office

people work in close collaboration with the employees in the Rabobank branches. They realize that

the Lean Six Sigma methodology helps them to simultaneously increase efficiency and value for the

customer.

Trust-based control and fraud management. Trust is an extremely important concept in Interpolis. It

allows the firm to manage the claim process in a fast, easy and hassle-free way. But trust doesn’t mean

blind trust. Interpolis knows that some customers will abuse this trust and for instance file higher

claims than justified. The insurer has, however, no idea how large this group will be. What is Interpolis’

reaction? How will they deal with such fraud? While most insurance companies use many formal

controls and procedures mostly involving experts in claims management, Interpolis relies on the claim

handler in the contact center. These claim handlers hear soon enough when somebody tries to commit

fraud: Is this story too beautiful to be true? Are people nervous when they were calling?

The top management of Interpolis believes this is a much more effective claims process than the

traditional paper process. Interpolis also communicates that it controls a small sample of its customers

afterwards. When the claims operator feels that something is wrong, the company investigates the

claim in greater detail. If fraud is proven, the customer immediately ends up on a black list and gets

kicked out. Again, Interpolis is crystal clear about this process.

HR management. With the transformation Interpolis formulates a New Employee Profile, and lets

many employees go. Interpolis spends a lot of time selecting the right employees: potential candidates

are tested whether they have the right competences and attitudes through an assessment, called ‘The

Close Up’. The company spends a lot of resources on training and competence development and on

providing a great work environment. New employees go through an extensive training program to

understand what crystal clear is all about. The company also gives a lot of coaching on the job, and

there is an atmosphere were employees can talk openly to their colleagues and managers when they

have questions or problems. All new employees go through a mandatory, extensive training that

incorporates a values assessment.

But Interpolis goes much further than that and revolutionizes how people work.

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CASE 2016-05-C

A change in culture

From the start of the transformation, Piet van Schijndel, Jan Vullings and the other members of the

top management team realize that being crystal clear requires more than appropriate systems and

processes; above all it requires a fundamental change in the behavior from all Interpolis employees,

and especially from the managers. Van Schijndel looks back and explains:

When we started the transformation, we realized we needed to work in a radically different way. In order to

alleviate the pain of the restructuring, we introduced our ‘New Way of Working’; this outlined how we wanted

to work together as a team and together with our customer. The starting point of our new culture was the

integrity of the people. You don’t need to manage top down. If you give trust to your people, you get trust in

return. If you distrust your people, you get back distrust. I don’t think people get lazy if they are not controlled

by their boss. Then we wondered how we could translate this philosophy in our organization’s culture.

Interpolis decides to tackle the cultural change in an integrated way and changes HR practices, IT and

communication systems, and the working environment. The goal is to create an open culture where

all employees can bring up ideas to improve work practices, which in turn improve the customer

experience. In 1996 the Executive Committee of Interpolis decides to use the new head office to

introduce a new way of working and to reenergize the organization and seek new ways to increase

customer centricity.

Prior to the transformation, the staff members of Interpolis were used to have their own desk. Now,

the Executive Committee decides to explore workplace sharing models and looks for ideas to bring

the principles of flexible working, trust and accountability to the workplace. In fact, flexibility and

freedom are the focus of the whole office and business system design, which in turn stimulate the

culture of openness and trust. Interpolis finds out that 30 percent of the office space is not used in a

conventional office setting – in other words 3 out of 10 days the desk is not used. They also discover

that cubicles are good for concentration and that open spaces are good for communication and

cooperation. They examine the work processes and decide to change the physical way people work.

Utilizing the ‘Flexible Office Concept,’ Interpolis revolutionizes the way office space is assigned and

used. Each day, or even moment of the day, the employees select a place to work that best fits the

activity or task to be performed.

Interpolis wants to build trust with its employees and this permeates the structure and all the work

processes in the company. Team leaders at Interpolis work on the insight that if they trust their

associates, their colleagues work with a sense of freedom, responsibility, and reciprocal trust that

results in a higher performance. Work time is from 7:00am to 7:00pm and is flexed — team members

can choose to come in early and leave early or arrive later and stay later. In the final analysis, what

employees do and what they accomplish is what counts. Associates determine what constitutes an

average week of work, defined by mutually agreed upon results and they manage their own time and

resources accordingly.1

1 Meyer, C.K., Strong, R.B. & Geerts, J.A. (2014) “Eupsychian Management: Organizational Change, Behavior, Motivation, And Trust”, Journal of Business Case Studies, Vol. 10 (2), 165-173.

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CASE 2016-05-C

Interpolis invests a lot in the essential information technology that will enhance place-independent

communication and interaction. In the 1990s this is a radical decision. With state of the art

communication technology in place, employees are given the freedom to work from their home office

– about 2.500 associates work at home or telecommute several days each week – and experience the

same speed and ability to transfer information as they have in their office environment. Team

members find that they tend to use their home office for concentrated, thoughtful work. They use

other space in the office consistent with the decisions that needs to be made or the tasks at hand.2

Interpolis builds a truly great office space — a building that no longer resembles an office, but reflects

a new corporate mindset for management and employees. Top managers no longer have their own

floor but just pick a place like everybody else. A large amount of space is devoted to multi-purpose

uses for large meetings, relaxation, conferences, consulting, working, eating and meeting people, etc.,

with background music that is suitable to the activity in progress. Each ‘club house’ has its own

particular atmosphere. For instance, chairs with ‘big ears’ are used for small meetings with a few

people and provide an informal, comfortable, and cozy environment, free from outside noise, where

confidential matters can be discussed (see Exhibit 3 for some pictures of the Flexible Office Concept).

In the implementation the company initiates a process to make each person responsible for his/her

tasks and output. The top managers involve team members in the development process and

employees can participate in workshops on the use of flexible workspace. Employees are required to

take personal responsibility for their behavior and team leaders have to give them the needed job-

related autonomy to perform their jobs. Practices like this help Interpolis to become one of the most

innovative, customer-centric, and solutions-oriented insurance companies in the world.3

2 Ibid. 3 Leaders of Distinction (2012), “Case Interpolis”, http://www.leadersofdistinction.com.au/CASE-STUDIES/CASE-STUDY-INTERPOLIS/

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10

CA

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CASE 2016-05-C

Interpolis is a frontrunner with its New Way of Working: nearly every organization that considers to

implement the New Way of Working in the Netherlands looks at Interpolis as a role model and

inspirator. With its focus on great building design and simple business systems that support autonomy,

flexibility and freedom, individuals become the focal point rather than buildings or hierarchies, giving

the whole company a more human, trusting and compassionate feel. The office reflects the New Way

of Working; it offers a physical representation of the norms and values in the company. It enables and

shows an open culture with continuous dialogue between employees on how to improve as

organization:

“Mavericks are important in the organizational culture of Interpolis. When employees see where change is

required to increase speed or reduce cost, for example, or if they want to give voice to an issue such as

downsizing, they can present their ideas before a hearing board. As a result of incorporating employees into

the decision-making mix, the operational costs of Interpolis have declined, processes have been improved,

and efficiency increased. Hearing boards provide an open, transparent, non-threatening forum in which the

issue or change at hand can be laid on the table and discussed and analyzed. For instance, the following kinds

of questions might be asked: Why is a specific change required? Why are things done in a certain fashion?

What would be the end result or effect if a process or policy was altered or changed? We think this type of

open, non-threatening environment is necessary in establishing a trusting relationship.”4

The results so far

The company’s goal to become the most clear and trustworthy insurer does not go unnoticed in the

Dutch corporate world. A 2011 survey reveales that Interpolis is the most trusted insurer and

Rabobank the most trusted bank in the Netherlands.

Exhibit 4 – Successful branding

4 Meyer, C.K., Strong, R.B. & Geerts, J.A. (2014) “Eupsychian Management: Organizational Change, Behavior, Motivation, And Trust”, Journal of Business Case Studies, Vol. 10 (2), p. 168.

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CASE 2016-05-C

The transformation of the strategy and culture of Interpolis has led to better financial and commercial

results since 1996. This can be deducted from the financial results, presented in Exhibits 6a and 6b.

In addition to the financial figures, Interpolis increases its market share and customer satisfaction

scores:

Increased market share: the number of private customers with an ‘All-in-One Policy‘ rise from

500.000 in 1994 to 600.000 in 1997 to 900.000 in 1999, and to 1,6 million customers in 2013.

Customer satisfaction increases as well: on a scale from 1-10, the score improved from a 6+

(before the change) to a 7,5 in 1996 and has been at an 8 since 1999.

The commercial success leads to a growth in the size of the organization, as can be deducted from

Exhibits 6a and 6b, and becomes one of the most preferred employers in the insurance industry (see

Exhibit 5). The employee satisfaction scores have risen significantly over the years.5

Exhibit 5 – Employee satisfaction ranking in the Dutch financial services industry

5 Kemperman, J., Geelhoed, J., Op ’t Hoog, J. (2015) Briljante Businessmodellen in Finance, Academic Service, Den Haag.

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316-0256-1

14

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316-0256-1

15

CASE 2016-05-C

The growth of Interpolis since 1996 proves to be sustainable. When Jan Vullings retires in 1998 and

Piet van Schijndel returns to Rabobank in 2002, many industry observers wonder whether Interpolis

will be able to continue its growth trajectory. But the company continues to grow and expands market

share in the Dutch insurance market.

In 2005 Rabobank intensifies its relations with Achmea, one of the largest Dutch insurance groups.

Interpolis becomes a subsidiary of Achmea while Rabobank becomes shareholder in the insurance

corporation. It is interesting to notice that the Achmea Corporation has incorporated the theme of

becoming the most trusted insurance company as overarching goal for the whole group. For example,

this is what is stated in the Annual Report of Achmea of 2013:

“Our ambition is to become the most trusted insurer for our customers. Customers must be able to rely on us

being ready to act when they need us. We aim to be accessible via a broad range of brands and distribution

channels. We see it as our duty to act in a responsible and forward-looking manner. We want to do so in a

variety of ways, for example by providing products and services which have added value for society, by

investing responsibly and applying customer centricity to our strategies and actions.”6

Crystal clear updated

It is November 2010. In line with the culture of continuous improvement, the Executive Committee

has asked a work team, under the supervision of Gerard van Laarhoven, to explore how the concept

of crystal clear could be further updated and upgraded. The team knows that this assignment will have

a significant impact on the entire organization.

The team has developed a controversial new insurance concept. The main idea is that insurance is

only a part of the solution to managing risks. Instead of insuring everything Interpolis will emphasize

prevention as the main solution to risk management and the company’s tag line will become: “To

prevent is better than to insure.” Interpolis will be there for its customers when they really need it.

Not just by being and staying transparent but by offering new solutions, so that people can be in

control of their own risks. That means that Interpolis wants its customers not to uncritically insure

everything, but to use their common sense.

The focus will shift to risk advice and prevention as an alternative for insurance. Interpolis will develop

the ‘Insurance check’ to help consumers know what to insure and what not. The company will also

launch a portal, called the ‘Online Prevention Shop’, to sell prevention solutions, such as security keys,

caravan mirrors, and so on.

For the corporate customers, the team proposes the ‘Rabo RisiGo’ product. With this product

corporate customers get personal advice on their business risks and on potential solutions. Interpolis

provide a report with a list of the most important operational risks, and the most appropriate

prevention and insurance solutions for the customer.

6 Achmea, Annual Report 2013, p.12.

316-0256-1

16

CASE 2016-05-C

Exhibit 7 – Interpolis’ new insurance concept

Gerard van Laarhoven and his team realize this goes beyond prevention. It could imply that Interpolis

faces a reduction in premium income. But Gerard believes that this is a consequence of the new

strategic direction of Interpolis. This time, however, he wonders whether he should have made a

compelling business case for this new proposal.

316-0256-1