Acting as a family doctor
Cornelia Coman was appointed CEO of ING Insurance and Pensions Hungary in June 2012. In this very little time frame, she not only had to become familiar with Hungarian issues, but also create a mid-term plan that approaches consumers from a different angle to previously.
Q: You have been in charge of ING’s Hungarian branch for seven months now. How many urgent tasks have you had to deal with to date?
A: It is interesting because I have worked for the same company for last 14 years, but you start to see things differently when you’re in charge. Even if the situation is very harsh, not just in Hungary, but in the region and all of Europe, the problems were very familiar to me. My first and most important task was to create a mid-term strategy for the company during the summer. To achieve this, I had to learn very quickly our company’s position here in Hungary: where we are, where we are heading, what are our strengths and weaknesses etc.
Q: Many companies and decision-makers complain that the Hungarian business environment is not predictable enough. Do you feel this jeopardizes the accuracy of the data your strategy is based on?
A: It is not a specifically Hungarian problem; it’s quite the same in the whole of Europe. If we look at the whole picture from an external point of view, the European Union crisis has a much bigger impact on countries than local problems. Of course, every country has its own local crisis, but – as is the case in Hungary – there is nothing new, as we have had to work in similar environment for the last 2-3 years. Yes, it’s hard to make a five-year strategy in these conditions, but I think every company has to improve and learn flexibility to adapt to its business environment.
Actually, this mid-term strategy fits more into the current environment than short-term goals. If you look to the short-term, say 2-3 years, you have to change more quickly. But if you have a longer-term view, maybe not focusing on short-term profit, but on long-term goals, it is easier to make plans.
For example, if you look at the life insurance market, growth was very limited in 2012 and we don’t expect anything significant this year. But instead of focusing on pushing forward insurance products, we started to think about what we should do or change in the way we treat customers, so that we can grow and create value in the long-term.
Q: What are the novelties of your mid-term strategy compared to previous practice or other market players?
A: In the last few years, customers’ perceptions have been changing. They do not necessary want what a company says, but have their own ideas, based on information collected from the internet, family, friends, etc. So the winning strategy seems to be to fully comprehend and answer in depth all the questions and needs of the customer.
In order to do so, we developed this five-year strategy. We want to be the preferred life insurance and pension company in the country and our strategy is to grow by improving the customer experience. Instead of forcing prompt sales, we would like to have a lifelong partnership with our clients, based on strong customer value propositions, professional financial advice and creating a community of clients based on shared values. We want to be there for our clients, providing answers and solutions for their evolving financial needs throughout their lives. We would like to see our consultants and agents like some kind of ‘family doctor’ in the financial field, whom clients could call at any time an issue arises.
We will improve further our product range with features and benefits that create even more flexibility and adjustability according to customers’ needs. Client preferences change with age, wealth and several other factors, and we would like to take that into account when building up a portfolio.
Regarding the schedule, we have the first concept design more or less ready and throughout the coming months we will go into detail. The launch of our new services will be in June 2013 at latest.
I believe that actually the two main needs in Hungary that ING can successfully fulfill are health insurance and retirement savings.
Q: Let’s talk about the former first. What plans do you have for the health insurance product line?
A: ING has been on the health services’ market for about 10 years now, providing health insurance financing services for our clients, as well. In this field, legislative changes last year marked the first step. Fuelled primarily by company cafeteria systems, interest in these services is expected to rise further in 2013. We cover many services like hospitalization or paying for surgery in a private clinic. We also have cooperative agreements with hospitals where private rooms are available. However, we see that there are many more possibilities still to cover in this particular area, so we are working on improving our service portfolio further.
Q: You also mentioned retirement savings as having a significant role in the strategy of ING. But mandatory pension funds have been made virtually redundant by the nationalization of mandatory pensions in 2010. OTP announced it was leaving the market at the end of last year. What are your plans for surviving on this market?
A: The mandatory pension system is in a very strange situation. On one hand, we have very good customers who decided to stay in the system. On the other hand it is not clear what’s going to happen. In my opinion, clients should be allowed to move their assets from the mandatory to the voluntary system. In this way, clients will have enough trust to start contributing to the system and service providers will have a reason and a method to keep these clients and their assets.
Now the voluntary pension market is a very interesting one. More and more people feel that the state pension won’t be enough after retirement, they feel that something more is needed, but still they don’t initiate it.
When you take a look at the voluntary pension market, you see that 15 years after the establishment of the system, there are only around 1.2 million clients. It’s a very small proportion of the whole working population. Moreover, there are people who are already in the system but don’t make payments, even if the minimal contribution is only comparable to a cinema ticket or a dinner. If you compare the potential of the market with the real – very limited – growth, you can see that there is plenty of room for improvement.
Cornelia Coman graduated from the Academy of Economic Studies in Bucharest in 1998. She has worked for ING ever since. Before joining ING’s Hungarian branch, she was the CEO and President of the Board of Administration of ING Life Insurance Romania. She was also president of the Romanian Pension Funds’ Association, vice president of Romanian National Association of Insurance and Reinsurance Companies, and is a founding member of the Romanian Actuary Association.
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