GENERALI ČESKÁ, I LIKE THAT!
Roman Juráš, Chief Executive Officer of Česká pojišťovna
06 November 2019
ROMAN JURÁŠ (49), Chief Executive Officer and Chairman of the Board of Directors of Česká pojišťovna has both Czech and Slovak citizenship. He has been in the insurance industry for over 20 years. He was born in Prostějov, and most of his life spent in Slovakia where he graduated from the University of Economics in Bratislava. He started his professional life with KPMG Austria. After four years he joined Generali where he continued his professional career. Since 1996 he was in charge of launching Slovak Generali. From 2001 to 2007 he was Executive Director of the company. He then worked for nearly five years as Head of Bancassurance at Generali Versicherung in Vienna. In 2013 he returned to Generali Slovakia as Chief Executive Officer.
A significant change is expected on the domestic insurance market. By the end of this year, Česká pojišťovna will take over the activities of Czech Generali. Both companies are part of the Italian insurance group Generali, however so far they are two independent companies. Roman Juráš, current Chief Executive Officer and Chairman of the Board of Directors of Česká pojišťovna – is in charge of the final stage of the project that will also give rise to the new name of the company - Generali Česká pojišťovna. As he says, his ambition is to trigger a bigger growth in the practically brand new company, in the same manner as he already has managed to do in Slovak Generali.
HN: You have been head of Česká pojišťovna since September. How long have you been preparing for the top position in Generali Česká pojišťovna?
In the first quarter of this year I received an offer to move from Slovakia to Česká pojišťovna. When I agreed to this offer, I knew that I would become head of Generali Česká pojišťovna. This project had been decided at the top management level of the Generali Group more than a year before that. Of course, just a small group of people knew about the final outcome of this project, to avoid any distortion of information and jeopardising the preparation of the demanding project. I got to know details about combining the activities of both insurance companies in the summer when I came to the Board of Directors of Česká pojišťovna.
HN: Since 2008, Česká pojišťovna is part of Generali CEE Holding and there used to be considerable rivalry between employees of both Czech subsidiary companies. How did they respond to this change?
Once we published this information, I set off, with my colleagues from top management, to the regions and for an entire month we were meeting with employees, agents and our business partners. We explained to them that combining these two companies will enable us to operate better and to achieve operational savings which we will be able to invest into further development. I was very surprised by the positive reaction. In particular my colleagues from the sales force are excited to work for a company that will become the market leader. They take it as a great chance and opportunity.
HN: What do clients say to this?
About one hundred people have called the call centres with general questions. They were interested primarily in operational matters, typically whether the account number for premium payment will be changed. Of course, we are going to inform all clients in detail about this merger. We are now expecting approval by the Czech National Bank to transfer the insurance portfolio from Generali into Česká pojišťovna. Then, starting around the end of November, clients will gradually receive letters explaining what will happen and what consequences for them will arise from this. I would like to say that these consequences will be only positive ones, and above all that the terms and conditions of existing policies will not be changed for anybody.
HN: The shareholder decided to terminate the use of traditional blue logo of Česká pojišťovna, including the bunch of three linden leaves, and replace this by a red symbol of the lion. Have the surveys revealed that the existing brand has lost its importance for clients?
The Česká pojišťovna brand is a strong and favourite one, and the Generali Group appreciates this brand a lot. Therefore, the new logo, in a very balanced manner, will connect this brand with the Generali brand, symbolising the benefit of belonging to the same important international group. I understand that this decision can be seen sensitively by some people, however in the course of its 192-year history, the logo of Česká pojišťovna has changed a lot. Many people could be surprised but there was also a lion on the very first logo of Česká pojišťovna, and this logo was red. The linden leaves did not appear on our logo before 1971.
HN: Your competitors say that the name of Česká pojišťovna in the new brand will gradually diminish, and within a couple of years it will disappear definitely. Are they right?
I am asked this question quite often. It is true that the Generali Group uses the original names of its insurance companies very exceptionally. The Group has done this only in the Czech Republic and in Argentina. However, Česká pojišťovna is an extraordinarily strong brand so this company will always have its place in the name. After all, if we take it strictly from the economical aspect, it would not make sense to invest tens of millions of Czech crowns in launching a new brand if the name was to change within a few years. Personally, I would prefer if the name is accepted in the same way as when Allianz in Slovakia took over the government insurance company and changed its name to Allianz Slovenská pojišťovna. When competitors talk about this company, they call it simply Allianz Slovenská. In our case the name Generali Česká could be accepted.
HN: How much will rebranding of your branches cost and how quickly will the new name be visible in the branch network?
Let’s start with the end of November. We have here a total of about 900 points of sale, so this operation will take the whole of next year. The costs of merging the activities of both insurance companies, not just the rebranding, will not be published. However, we can talk about hundreds of millions of Czech crowns. Our aim is to implement many innovations and I think that the competition will be surprised how strongly we are planning to promote the new brand.
HN: What other investments do you expect in relation to the merger of both companies?
They will include primarily investments in modern technologies. It is important that many activities in the background of both companies, in the so called back office, have been gradually merged since 2015. So actually, there is not much left to merge. We have already prepared the product portfolio and from the beginning of the next year, both Česká pojišťovna and Generali will offer the same products. At the same time we are going to launch a common facility serving clients at branches and in the business network for both insurance companies. All our agents will provide services both for clients of Česká pojišťovna and for Generali. They will have, of course, access to the systems of both companies so that they are able to fully serve the clients.
HN: What other benefits will the merger of both insurance companies bring to clients in the near future?
The principal benefits will include faster and more efficient services, for example in policy-selling or claims-handling. At the moment people want to solve more and more issues over tablets and mobiles, so our innovations to client services will also follow this direction. For example, we focus on digitisation and paperless activities, not only in the back office, but also in serving our clients. We will also continue to improve client zones, specifically online platforms for administration and overview of policies. The principal matter is to keep our position as the fastest insurance company in claims settlement. Even now, 85 percent of claims in motor insurance are indemnified within two days of the documents being submitted, with 77 percent of claims with full documentation being settled on the same day when the client provided evidence of the damage. In property insurance, 95 percent of claims are reimbursed within five days of the documents being submitted, with 78 percent of claims being paid on the same day as the last document being submitted. Also launching robots is one of our goals. Currently we have 26 robots, saving the capacity of our experts.
HN: What product innovations are you preparing?
Assistance services are a long-term trend, not only in motor insurance but also in travel and household insurance. Our entry into the Internet of Things may be one such example, where we have started to offer smart sensors for motion and flood already included in the price of certain insurance variants.
HN: Are clients already prepared to use the services provided by insurers over mobile phones, similarly as they are in banks?
The new services are now implemented in such a way that they can be always accessed also through a mobile phone, and that clients can pay for them immediately using this payment method. We must implement the innovative solutions faster, to adjust ourselves to changes in the behaviour of our clients as well as the market.
HN: Most of your life you have spent in Slovakia, you were also working in Austria for several years. What is the position of the Czech insurance market, compared to these countries?
For the Generali Group, Austria and the Czech Republic are the most important markets in the Central European region. With regard to motor insurance, the Czech market is very similar to the Slovak market. Due to expenses incurred by insurers for such claims, the existing price of this type of insurance is insufficient. Our costs are growing twice as fast as the price of insurance. For these reasons, the prices must continue to grow, in particular in liability insurance (MTPL). This increase is pushed also by regulatory bodies, both by the Czech National Bank and the National Bank of Slovakia. Great potential is being opened for insurers in both markets in the field of life insurance. I think that the Czech market has become stable, so life insurance can better meet its mission to secure clients against unexpected life situations. By changing the legislation that regulates the method of paying commissions, the so called ‘rewinding’ of contracts, under which clients lose the surrender money, has been reduced significantly. Both markets are more focused on covering life risks of clients rather than on offering investment life insurance policies. In Generali in Slovakia, we managed to speed-up the growth in life insurance, during four years we increased our new business threefold.
HN: How did you manage to achieve this?
It was a combination of several things. On the one hand, we have supplemented our products with new policy riders, on the other hand, we have enabled agents to negotiate policies quickly and conveniently and to settle the claims faster. Thus we have become a more attractive and preferred insurance company in life insurance. And that is something I would like to achieve also here in the Czech Republic.
HN: In what segment do you expect the highest growth next year?
Non-life insurance will present a top priority to us. And since in motor insurance we already are very strong, we want to direct our growth mainly to buildings insurance, insurance of households and on business insurance. Our major competitive advantage lies in our own sales network. Part of this network is focused exclusively on entrepreneurs, making us unique among insurance companies. We are going to support this network even more to increase our market share in business insurance. I can see great opportunities in the already mentioned life insurance.
HN: In recent months, the government's proposal for the taxation of technical provisions, which is part of the tax package, has been a major topic for insurance companies. How would that affect you?
In our case we would have to pay about three to three and a half billion Czech crowns. I perceive this a very non-systemic measure. This step is unbelievable, and I was very unpleasantly surprised to learn that such an important matter fundamentally affecting clients of insurance companies is discussed along with higher taxes on cigarettes, alcohol and gambling. No similar non-systemic step has ever been taken elsewhere in the world. Here I would like to emphasise that technical reserves present our obligations towards clients. The government, unfortunately, in this way prefers lump-sum income to the state budget, rather than the interests of clients of insurance companies, and insurers are thus punished for creating these reserves prudently, to be able to meet their obligations at any moment.
HN: Another issue that you inherited are actions against both insurance companies for investment life insurance. The Association of Citizens Advice and the society of Deceived Clients have recently announced that they decided to file a lawsuit with regard to confusing charges and their unlawful billing to clients. What do you think about it?
Above all it is important that in August the society failed with a similar suit at the Municipal Court in Prague. What is also important is that in addition to a couple of judgments that invalidate policies, there are judgments where the court confirmed that the insurance company was entitled to charge insurance costs and that consumers had been aware of the initial and administrative costs. Česká pojišťovna has, of course, always proceeded in accordance with the law. However, the current legislation is significantly stricter than in previous years, and it is not fair to look at contracts that are ten or fifteen years old through standards applicable today. The situation around investment life insurance thereby reminds us of purposeful actions in the sphere of banking fees that Czech people witnessed several years ago.
HN: According to Reuters, the Axa Group considers selling its Central European insurance companies. Would Czech Axa fit into the portfolio of your insurance company?
This is an issue being completely in the competence of our parent company so I am not at liberty to comment on it. However, in general the Generali Group is interested in further strengthening of its position in the CEE market. The growth appetite of the Group has been proven in acquisitions during the last year. For example, the Group acquired Adriatic Slovenica insurance company in Slovenia, took over the portfolio of Ergo insurance company in Hungary and in Slovakia, and Union Investment TFI in Poland.
(Source: daily Hospodářské noviny; 6 November 2019; author Olga Skalková)