Alexander R Wynaendts, CEO and chairman of the executive management board, Aegon NV, spoke to Pravin Palande about how the financial crisis has affected product development in the insurance market. Aegon is one of the largest providers of pension and insurance products in the world.
Q How has Aegon changed its model after the financial crisis?
The crisis affected the US business. As a consequence, we decided to take on a significant restructuring plan. We stopped certain businesses, reviewed others and even sold some of them. We also brought down the costs of all our businesses.
After the crisis, trust is the worst hit in the financial sector. Regulators have become demanding in terms of capital and clarity to customers. We have refocussed our business into simple and transparent products, which has brought down cost. We are also taking advantage of the digital revolution as costumers want to compare and research on their own.
Q What do you mean by simple products?
Insurance products are not easy to understand. There are too many regulatory and tax issues. We are trying to make the products simple for the user. It is just like an iPhone which is easy to use but is made up of complicated parts. We need to make insurance products simpler for the consumer. The financial crisis has accelerated this development.
Q What have you done in the Indian markets?
We have concentrated on the new segment of online selling. We have put a lot of resources in developing it. We have 25 percent market share in the online space where customers can go and compare policies. We have to get business models much closer to the customers, but this does not mean that we are not giving a face-to-face service.
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