In this series of articles, Ageas learns from the experiences of other global players. Just like Jan De Nul Group, the insurance company expanded abroad because it had reached its maximum growth in Belgium. There are remarkable similarities between the visions of both companies: both value placing trust in people, growing organically where possible and innovating out of sight.

Both Ageas and Jan De Nul Group looked abroad because they had reached their maximum growth in Belgium. CEO Bart De Smet looks at the Belgian dredger’s achievements with admiration. ‘As children we’ve all mixed up sand and water in a jar and built a castle with it. These used to crumble pretty much straight away. The boys at De Nul construct entire islands, on which large buildings then appear. The technology and know-how involved are huge.’

He sees a few noteworthy similarities in the approach of both companies: placing trust in people, growing organically where possible and innovating out of sight.

‘It takes a lot of character to fill the glass halfway’

Ageas’ joint-venture strategy relies on trust in the abilities of its own and its partner’s people. ‘Together we can move faster and make fewer mistakes.’

He was part of a cabaret group during his university days in Leuven, and together with some friends he also presented a satirical programme on Radio Scorpio named ‘Divide and conquer’. But this creed - the motto of many CEOs - does not suit Bart De Smet at all. ‘A modern boss would do just the opposite,’ he notes. ‘You have to foster team spirit rather than pitting people against each other. Give them the initiative, so they are not limited in their creativity.’

Of course a good CEO will make the final decision, but not until he has listened carefully, De Smet emphasises. ‘There are people in the company whose job it is to see the glass as half empty, where I see it as half full. You have to hear them out in order to conclude that the liquid is at the halfway level. I think I adjust my opinion based on staff input about half the time.

A company gets the staff it deserves, he mentions. ‘Strong people do not accept that you would plough on stubbornly and ignore their recommendations. Weak people love it when the boss decides everything, so they don’t have to. But be honest: which people would you rather employ?’

Inspiring people

Some companies only use a hierarchical structure, while other fare better with open communications and a broad distribution of responsibilities. Ageas has chosen the second option. ‘At our head office we aim to inspire rather than control, although the latter remains important due to the strict regulations,’ says De Smet.

He refers to a recent study by consultancy firm Roland Berger. This study shows that international group headquarters house - on average - 3.4% of their total number of employees. ‘In Ageas’ case, this should be around 400 people,’ De Smet calculates. ‘In reality, our headquarters here in Brussels and our additional office in Utrecht only employ one hundred and thirty people. So we have a relatively light central structure. Although we are an international company, we give a lot of autonomy to our insurers in different countries. We don’t need to tell them which products they should sell, through which distribution channel and at what price. In the end, they know the market a lot better than we do.’

Geography

In the past decade and a half Ageas has grown strongly, thanks to a mixed strategy. ‘We try to stimulate organic growth as much as possible, but particularly in the past decade and a half, we’ve combined this with non-organic growth,’ De Smet explains. ‘We’ve made acquisitions in the UK, Italy, Portugal and Turkey, among other places.’

And how does he feel about criticism that for many acquisitions, 1+1 is promised to equal 2.5, while in reality this sum more often ends up in the region of 1.7? ‘In terms of acquisitions, our sector definitely does not have a great track record. In reality, you often see destruction of value. So you cannot count your eggs before they’ve hatched.’

De Smet does allow a margin of error. ‘Sometimes you know that in terms of turnover, 1+1 is going to equal less than 2. But there might still be other reasons to proceed with the acquisition. These might include accessing new distribution channels, scaling up or acquiring competencies in fields where they were lacking before. In those cases, an acquisition can still create value for the group.’

In Asia Ageas uses joint ventures, a middle ground between organic growth and acquisition. ‘Both parties start from scratch,’ De Smet explains. ‘We have nothing there, and the local partner does not yet have an insurance offering. If we were both to go it alone, it would take longer, we would run more risk, and more mistakes would be made. That is why we combine our strengths. The local partner has the market insight, the distribution channel and the client potential, and we bring in all the knowledge required to offer new products through these channels.

Although Ageas has a minority stake in its joint ventures in China, Thailand, Malaysia, India and Vietnam, among other places, this is not a purely financial investment, De Smet emphasises. ‘We commit as though these companies were one hundred percent ours. So for us, it really is more like a form of organic growth.’

More efficient communications

In Asia Ageas is innovative - just by being the first to offer the opportunity to get insurance to a large group of consumers. But it is also innovative in other ways, De Smet notes. ‘Nobody is going to call insurance sexy, but there is much more innovation than the average Joe realises. In our case, technological progress is in the complex models that present a better offering and facilitate more efficient communications.’

Can he give an example? ‘In claims settlement, we can use Big Data to more accurately predict the possible cost of a claim. It also offers advantages in terms of communications. We used to write to 100,000 people, several thousand of whom eventually took us op on our offer. We are now able to send a targeted email campaign to 25,000 people with more success, while we avoid annoying the 75,000 people who are not interested with emails they have no need for.’

‘Sponsorship is about more than brand awareness’

Insurance company Ageas supports sports and social projects, but always uses its local brands. ‘Our group name is not relevant to our clients.’ 

‘Companies looking to roll out their brand across many markets will find that cycling is the ideal sport for that,’ says Ageas CEO Bart De Smet. ‘We don’t need to push the Ageas group name. It is relevant to our partners, investors and employees, but not to our clients.’

This is a result of Ageas’ strategy to cooperate with local brands for local markets. ‘It would be a bit arrogant to show off Ageas’ name in Asia on behalf of a joint venture in which we hold a minority stake. Moreover, our local partners already have a strong brand. So we should really benefit from that.’

That is why in Belgium, things like the Memorial van Damme and the Belgian Olympic Committee are sponsored by AG Insurance. This name also appears on the jerseys of the Hockey and Cycling associations. ‘Aside from that, AG Insurance also has agreements with eight first-division football clubs where we support youth, social and medical projects,’ says De Smet.

Sponsorship is about more than just branding or recognition, the Ageas CEO explains. ‘It has a positive impact on our employees. For the Memorial Van Damme, all interested employees were invited to participate in a race. The eight best runners were then invited to run a race inside the stadium during the Memorial. 120 AG Insurance employees also spontaneously offered to volunteer for logistics and hosting duties. That goes to show that people are proud of the company they work for.’