Codan's analytical CEO

New CEO Rickard Gustafson is making big changes at Danish insurance giant Codan by emphasizing speed and innovation

By Trine Koch-Nielsen

At 43, Rickard Gustafson is one of the youngest senior executives in the Danish corporate sector. His meteoric career, which has included senior executive positions in both the international consulting and finance sectors, has made him a symbol of a new era in insurance. From his office at the top floor of the Codan building in Copenhagen, Gustafson sets innovative standards for insurance, workflows and customer awareness.

“My aim is to turn Codan into one of the most innovative and efficient insurance companies in Scandinavia,” says Gustafson, whose energy and desire for change are tangible.

Codan operates in a highly competitive market in which the only way to achieve growth and profitability is to attract the right customers from competitors while retaining existing profitable customers. As a result, the otherwise conservative insurance industry has launched a stream of new products in recent years. In the future, in addition to focusing on customer risks, the Codan CEO expects insurers to focus more on their customers’ needs and behaviors.

360-degree customer view
“At Codan, we want to take things further than the general categorization of customers into different risk groups,” says Gustafson. ”We are going to take a close look at our customers’ needs to get a fuller view of the customer value of our products. This will enable us to be more precise and to tighten our focus on profitability, and customers will benefit from this in that they will get a wider range of simpler versions of the same product to choose from.”

According to Gustafson, enterprise intelligence in a wider sense is extremely important in the insurance industry. “With the strategic measures we have taken at Codan, the need for enterprise intelligence is even greater,” he explains. “We need to both strengthen the source data and make sure that the necessary analytical competencies are present in the organization to ensure innovation as well as intelligent product development and choice of channels. As a company, we benefit from the opportunity to share analytical insight and learn from each other internationally.”

Codan’s new products and campaigns are based on demand and target-group analyses. An example is the marketing strategy for the loyalty program CodanTjek. Analyses show that four out of five Danes do not have sufficient insurance coverage. Based on this data, Codan created CodanTjek to ensure that its customers have the right insurance coverage for every life stage – from the first home and the first job until retirement. Codan marketed CodanTjek under the slogan “No one knows what the future holds” with considerable success, setting the company apart from its competitors.

“This value-creation process is partly driven by IT developments,” says Gustafson. “The better a company is at extracting useful knowledge from data and quickly translating this knowledge into the right products and initiatives, the stronger your competitive position is. Enterprise intelligence is a strategic area for us. In my view, it is absolutely vital if we want to succeed with our focus on customers, efficiency and profitability.”

First with online insurance
Codan is about to launch the first online insurance product in Denmark. ATAVA is the name of the new insurance concept that targets single people between ages 20 and 40 who live in urban areas and have no children. In Sweden, ATAVA online insurance products have been available since July 2007 and have proved extremely popular. Codan expects the online sale of insurance products in Scandinavia to increase significantly in the next few years. 

“The insurance industry will experience the same development as banks did four to five years ago,” predicts Gustafson. “Almost three million Danes now bank online, whereas only a few percent turn on their computers when it comes to insurance. In the UK, 75 percent of all car insurance policies are bought, paid and delivered online, and I believe that the Danes are also ready to buy insurance coverage over the Internet.” As a first step, Codan will launch ATAVA and then analyze online transactions to learn how to adapt both products and channels to each individual segment.

“The world is not black and white, and this is also true in terms of insurance and target groups,” Gustafson says. “Customers will use the different contact channels – Internet, phone, face-to-face meetings – according to their needs, and it is our job to offer the exact right mix of products and contact opportunities at the exact right time.”

Focus on knowledge sharing
The ambition to deliver precise and speedy customer propositions obviously puts pressure on all processes at Codan. Consequently, Gustafson has launched an attack on long-standing, but outdated, routines. Codan’s analytical trendsetter fights silo thinking, replacing it with a process-oriented customer approach.

This is done both at a regional and an international level. From a Nordic perspective, Codan benefits from its presence in both Sweden and Denmark. Knowledge about markets and customer behavior is shared extensively, resulting in faster product development. When Denmark passed new legislation on travel insurance, for example, Codan was the first insurer to offer free travel insurance to customers with home-contents insurance. This product had been part of the Swedish portfolio for years and was easily adapted to the Danish market.

In front with compliance
Internationally, Codan is part of a worldwide group. In 2007, the company was delisted from the Copenhagen Stock Exchange and became a full-fledged subsidiary of British insurer Royal & SunAlliance (RSA). This created even closer links to London, the hub of Europe’s insurance markets, where the RSA head office is located. Being a part of an international group provides Codan with a number of benefits such as the opportunity to share competencies and best practices across borders as well as a good basis for adapting to EU legislation and following the progress on Solvency II, the insurance industry’s version of the banking sector’s Basel II.

“The insurance industry will be faced with some strict compliance requirements in the future,” explains Gustafson. “We need to be aware of these requirements and be ready to adjust our business processes to meet them. Fortunately, we benefit from being a part of an international group with a lot of know-how and advanced compliance methods.” He also stresses the clear link to process and precision.

“We need to think across boundaries, work smarter and share knowledge,” says Gustafson. “Knowledge is vital to our business, whether concerning customers, products, profitability or compliance. The more we know, the more precisely we can target our activities.”

Bio: Trine Koch-Nielsen is a Senior Development Consultant for SAS Denmark.