Q: How did STU SA, a small school insurer, develop into CIGNA STU SA, one of Poland's major insurers?
A: In fact it was quite simple: you must have a goal and pursue it with enough passion to get others interested and willing to help you achieve it. In insurance the main "technology" are people. Success in our work largely depends on the right choice of people and effective organization. We have been quite successful here.
CIGNA STU issued its first policy in 1994. I joined the company in 1997, the year in which CIGNA Insurance Company, a large U.S. insurer, became one of its major shareholders. Since then we have been able to provide quite a few new jobs. When we started we employed a hundred people. Our annual policy returns stood at PLN 50 million. Today we employ a staff of 550 and our returns are much higher. Over half of our personnel are women. Women also make up 60% of our executive staff. Possibly this "feminine component" is a large part of our success. Another reason could be our rather humane employee policy. Let me quote an example: one of our female staff was promoted to a managerial post although at the time she was nearing childbirth. We were quite aware that she would be going on a four-month maternity leave very soon, moreover, we had no guarantees that she would return to us later. And we also had to find a stand-in for the months in which she would be absent from work. In the insurance business the so-called human factor is crucial, because in fact all insurers offer very similar products.
Q: What kind of know-how did the Americans bring?
A: First they tried to introduce their IT solutions, but they didn't seem to work in Poland, so they gave that up. Neither did their business strategies work very well, mainly because they were out of touch with Polish realities. In fact, they also failed the test in other European countries. This shows that in those years – and sometimes today – foreign investors just did not know much about the Polish market and its nature and based their strategies on what general knowledge about us they had, which mainly concerned the political scene. In effect CIGNA withdrew from Poland.
In 2006 the company was taken over by the Vienna Insurance Group from Austria. However, the company owes its success largely to its Polish staff and even today, when we are practically owned by Wiener Städtische Versicherung, our management is entirely Polish. I may add that our growth in the past few years has been self-funded and involved a minimum strain on shareholder funds.
Q: How do you stand in Wiener Städtische Versicherung?
A: Saleswise we're sixth among over 40 subsidiaries in 20 countries in central-east Europe. We also rank sixth among Polish insurers. A decade ago we were 26th. In this race we always try to move forward and stay profitable. We booked our first profit in 1998, although our shareholders did not get any dividends until 2001.
Q: How does your offer differ from the competition's?
A: Most insurance products on the Polish market are much alike and differ in details at most. This is why our strategy is to be more of a boutique than a supermarket. One of our top priorities – and a strong competitive asset – is our customer policy. Insurance services are something quite abstract for customers at the time they seal their policies. They are not able to judge them and compare them with competing offers before they suffer damages and see for themselves how insurance works.
Our portfolio also sets us apart from other insurers: one-third of our business is financial risk insurance. More precisely, insuring banks against risks carried by housing loans, like mortgage troubles, financial straits, or unemployment. Banks take out our policies to secure themselves against such troubles. We also offer insurance warranties covering contract execution, customs, taxes, and tenders. Such warranties are required increasingly frequently today, and are absolutely crucial in EU-financed investments. We know this market well and have the right staff for the job. We even run something resembling a small bank which deals specifically with this line of insurance.
What also differentiates us from rivals is our rich offer jn personal insurance schemes, including accident and medical policies.
Q: Do you think health policies make your offer the best on the market?
A: Well, this isn't just our opinion – this was the verdict of a jury assessing health insurance plans appointed by the periodicals "Wprost" and "Menadżer Zdrowia". Only a few insurers in Poland offer health schemes.
Personal health insurance covering accident damages and treatment costs is still a novelty in Poland, not least for historical reasons. Today such schemes account for no more than 5% of the domestic market (8% of the CIGNA STU portfolio), but I am sure this will change quite soon. Their share in western Europe is closer to 20%.
Q: This is why I was surprised to see your broad offer in this field.
A: Diversity is a must in today's financial and insurance branch. Banks also offer many different credit lines.
Q: What kind of policies are most sought after?
CIGNA has something for every need and income level. We offer a variety in health policies, each treated as a separate product, with monthly premiums ranging from PLN 50 to 450. Depending on the premium, the policy covers a bigger or smaller area. All provide insurance against medical costs outside the public health system.
Every insurer in Poland must have car and home insurance, these are the two most frequently-purchased policies. Nonetheless the percentage of insured Polish cars and homes is still relatively low. The same is true for SME insurance. I think some small and medium enterprisers don't realize what they risk by omitting to insure their firms. On our corporate offer is the Euro 10 Plus scheme covering fire, theft, broken shop windows, inflicted damage, and profit loss caused by breakdowns.
Unfortunately Poles still don't know much about insurance, which is most evident when we compare per-capita insurance spending. Poles spend less on insurance than the Czechs and Hungarians, to say nothing about the so-called "old" EU countries.
I can see, however, that this is changing slowly, largely thanks to the broad offer of insurance schemes. Today we have over 520,000 insurance-holders, most of them private clients. Most insurers make good business transport policies, which make up only a third of the CIGNA portfolio. The fact is that we are cutting down on transport insurance because it has proved unprofitable.
Q: Can you tell us something about your online portal for teachers, school youth and schools?
We're always a step ahead of the competition in school insurance. We opened our portal cignaedu.pl this year to promote our unique school insurance offer. We insure teachers, schoolchildren and students, and the portal provides them – and their parents – with a lot of important information. Here they will find out how to apply for EU funds, where to go for the weekend, and how to get there. No other insurer has offered anything of the kind to clients.
Q: In 2006 CIGNA STU booked a 126-percent increase in insurance premium returns – the highest of Poland's top ten property insurers. You told us how you hoped to close 2007. What are your plans for next year?
A: The PLN 600 million in policy returns you mentioned should generate profits to the tune of about PLN 50 million. This will not only go to us – these results are an all-time record for the whole group. This is why we look into the future with optimism and constantly set ourselves new, ambitious tasks.
Q: Is your optimism founded more on your trust in the so-called human factor – in this case your highly-skilled staff – or the quality of the insurance schemes you offer?
A: This is hard to separate because insurance schemes are created by people. Much depends on human inventiveness and creativity, negotiation skills, and the ability to convince clients that our offer is better than the competition's. Our results are not just a one-day success – they prove that the strategy we adopted years ago and have consistently pursued since was well chosen.