LocalTapiola Group's result 1–6/2017: Transformation into a lifelong security company well underway
31.8.2017 - News Talous
Number of customers increased, product and service renewal to benefit customers.
LocalTapiola's business revolves around lifelong security, which means that LocalTapiola's customers are provided with comprehensive, preventative service in the areas of health, security and finance.
Key events at LocalTapiola from January to June include:
Health – We help you to stay healthy
• LocalTapiola and Mehiläinen formed a strategic partnership with the aims of providing a more efficient service for joint customers and developing innovative new insurance and health services.
• A new type of health insurance that enables customers to combine private and public health care for their own benefit in a manner that is unique in Finland.
Security – We prevent loss and damage and safeguard continuity
• The prices of motor liability and home insurance were reduced in 2017 as a way of thanking our customers. The discounts are worth an annual total of EUR 14 million.
• A new type of motor liability insurance that rewards drivers for not making claims has been given a good reception, and our position as market leader in motor liability insurance has been strengthened.
• Free resuscitation and first aid training for 20,000 school pupils and 5,500 customers.
Finances – We help you to become wealthier by investing your assets as if they were our own
• A unique new life insurance wealth management model, making the investment instruments and benefits enjoyed by a major insurance investor available to all customers. The solution involves investing customers' assets in the same instruments as the investments made by LocalTapiola Life.
• Customers' motor liability insurance policies (excluding major customers) were transferred from LocalTapiola General Mutual Insurance Company's portfolio to the regional companies on 30 June 2017 to improve the customer experience and strengthen the competitiveness of the regional companies. A total of approximately EUR 1.6 billion in investment assets was transferred.
Key figures for LocalTapiola Group 1–6/2017
See table at the end of the release.
Comments by Erkki Moisander, CEO of LocalTapiola Group
In line with our lifelong security strategy, we aim to provide our customers with comprehensive preventative services in the areas of health, security and finance.
We can also be satisfied with our results for the period from January to June, both financially and in terms of the development work made to benefit our customers. We are heading in the right direction, as demonstrated by the increase in the number of customers and improved customer satisfaction in the spring. These results are highly pleasing and encouraging. We will continue our renewal work with a special focus on improving customer satisfaction while further increasing our market share in 2017.
From January to June, LocalTapiola Group's premium income from direct non-life insurance increased by 0.4 per cent to EUR 704.8 million. Premium income from life insurance showed particularly strong development, with growth of 35.9 per cent. The return on our investment activities was good during the first half of the year. Customers were paid a total of EUR 505.0 million in compensation and EUR 29.5 million in technical interest. Approximately EUR 34 million was distributed to customers in the form of customer bonuses.
This year, we reduced the prices of motor liability and home insurance to benefit our customers. Thanks to more customer-friendly pricing and a new motor liability insurance product, we succeeded in strengthening our position as the market leader in motor liability insurance in a climate where the reformed Motor Liability Insurance Act further increased competition.
In the first half of the year, we worked towards our target of strengthening our position in the field of health and well-being services, which form one of the pillars of lifelong security for our customers. In June, we purchased a 10 per cent stake in Mehiläinen and formed a strategic partnership, which will enable us to offer our customers an even more extensive range of insurance-financed health services with higher quality. We will launch our first joint services this year. In June, LocalTapiola also launched a new type of health insurance that enables customers to combine private and public health care for their own benefit.
Lifelong security also means contributing to our customers' financial prosperity. In March, we launched a new uniquel life insurance wealth management model, making the investment instruments and benefits enjoyed by a major insurance investors available to all of our customers. The solution involves investing our customers' assets in the same instruments as the investments made by LocalTapiola Life. Customers have welcomed the revamp, as demonstrated by good demand.
At the end of the review period, we made a major strategic shift by transferring our customers' motor liability insurance policies to our 20 regional companies. Transferring investment assets worth a total of EUR 1.6 billion to the regions makes for a significant investment in regional economies. The regional companies can utilise the capital to accelerate local development by means such as financing growth companies.
Besides the number of personal customers, also the number of corporate customers increased during the period. A strong performance during the spring was the result in transfer of workers’ compensation insurance – we have had nine consecutive positive transfer periods, and want to thank our loyal customers for reaching this result. In addition, LocalTapiola’s solutions for promoting the wellness of the personnel in customer companies have grown significantly, and feedback shows our work capacity services are meeting the customers’ needs.
Regarding the farm segment, we are market leader in non-life insurance, and the customers have rated our business to be the best of the insurance companies (Kantar TNS 12/2016). During the spring, we continued to invest in farm business expertise, which will benefit the customers.
We have in many ways increased our focus on improving the customer experience, innovation, and technological and digital development in many ways to ensure that our customers will be able to continue receiving the best service from LocalTapiola. As part of this development, we will open dozens of lifelong security offices across Finland , we have established an internal digital factory and we are building robotic solutions for various areas of operations, such as life and non-life insurance services and asset management. The banking and insurance sector will also be shaped by legislation in the near future. For example, the revised Payment Services Directive (PSD2), which will take effect at the beginning of next year, will create opportunities for new approaches and eliminate traditional boundaries as third parties will be able to offer consumers services that have traditionally been the exclusive preserve of banks. We are also closely following this development.
Nowadays, change is a part of people's lives to a greater extent than ever before. At LocalTapiola, we want to do our part to make the everyday lives of our customers safer, healthier and more financially prosperous. In line with our lifelong security strategy, we will increasingly highlight a range of solutions for forecasting, security and well-being – we do not just contact our customers about insurance sales, billing and claims.
The figures are unaudited.
Erkki Moisander, President
and/via Anni Hiekkanen, Head of Communications, tel: +358 40 547 1045