Risk management firm sees growth in CEE region despite stagnant market
No one could accuse Lex Geerdes of not taking an interest in Central and Eastern Europe after he took over responsibility for the region for the insurance company Aon Risk Solutions. When he was appointed around a year ago, the Dutch executive undertook a 5,000-kilometer road trip in a second-hand Range Rover to get to know the area.
Along with his various country managers, he drove through countries including Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Hungary, Croatia, Bulgaria and Romania. It was, he said, “just fantastic.”
Among Aon Risk Solutions’ current country managers is Hristo Borissov, a Bulgarian who took charge of the company’s Czech Republic operations last year and also oversees the division in Slovakia.
Aon, which has been named as the biggest insurance broker in the world based on revenue, is made up of three divisions: Aon Risk Solutions, a global risk management business, Aon Hewitt, which offers human resources services such as pension administration, and Aon Benfield, a reinsurance intermediary. Between the three divisions, the company — which is well-known as the main sponsor of the Manchester United football team — employs about 140 people in the Czech Republic and Slovakia.
The Prague Post sat down with Geerdes and Borissov at the company’s offices on Wenceslas Square to find out more about their work, and learned that people in this region on average spend just a one-tenth as much on insurance as some of their counterparts in other European countries.
The Prague Post: How far back can Aon trace its history in the region?
Lex Geerdes: The origin of our business here and in most of the countries of Central and Eastern Europe was in around 1991 to 1993, when western investors started coming into this region. … In every country, we have developed strong local clients. What we see is that some of the local businesses are becoming international or global. We have almost 1,000 people in the region (plus about 800 in a back office center in Krakow). We are the leading broker and we were voted the best quality broker in CEE this year. It’s good to be of a certain size. If you’re part of a larger group like we are, you can use knowledge, technology and innovative solutions from insurance capability from London, New York or Rotterdam.
TPP: Parts of Aon date back much earlier though, don’t they?
LG: The Dutch business is historically the oldest existing insurance broker in the world. Last month we celebrated our 325th anniversary. It started in 1688 with shipping and trading; there were ships that went to the Indies. The company was called Evert van Heijningen, and then it merged and merged and merged. The Dutch business became part of Aon in 1991, coincidentally at the same period that we started growing and investing in this part of the world. The Dutch business is big and there we are the leading broker. From a population point of view, the Netherlands is a little bit bigger [than the Czech Republic] but from a GDP point of view, the difference is larger.
TPP: In terms of insurance spending, are there also large differences?
LG: There are still enormous differences in insurance spending per capita. In the UK they are the world champions in [spending on] insurance premiums. It’s about 4,000 euros per inhabitant per year — this includes household, business, medical and life insurance. In Central and Eastern Europe it’s between 200 and 400 euros. Habits are different, legal systems are different, the value of houses is different, medical systems and pensions are different. At Aon we are convinced in the next five, 10, 20 years, the growth in insurable assets [in CEE] will continue to grow year on year. The economies are doing better than [for example] France and Belgium. We are growing between 5 and 10 percent this year in the region, which is more than the market, which is stable.
TPP: How do you plan to develop the business locally?
Hristo Borissov: The market has been a little bit difficult for a few years because of the crisis, but despite that, Aon has managed to leverage our capabilities and capacities as a global provider. We definitely say, ‘Think globally, act locally.’ We have a global strategy, followed by measures taken to a local level. If you don’t have the local power, it would be very difficult to grow on a regional basis. Particularly for the Czech Republic and Slovakia, we’re growing through the acquisition of new clients. It’s mainly clients we’re picking up from our competitors. It’s the brokerage and consulting business where we’ve seen significant growth. Part of the consulting business is risk engineering, it’s something relatively new that we provide. It’s been growing recently. Also, we’re picking up quite a few synergies between the three companies we have within Aon. We have joint initiatives to bring different products.
TPP: Lex, how did you enjoy your mammoth road trip through the region?
LG: It was just fantastic. If you drive by car, you see so much more. When you’re sitting with your colleagues [in a car], you talk about the business, about the country, about your family. It really was a tremendous experience to get to know the region better.
TPP: People outside the insurance industry might sometimes see it as a fairly dry subject. Is this a fair perception?
HB: The job is not boring at all and it’s not dry at all. In order to provide added value to clients, you need to know about their businesses as well. We have clients from agriculture to space, from the ground to the skies, and you have to have the client expertise to help them. If you want to help them in the construction of a ship, you need a ship engineer. We have people in our company who are, and we have to know that bit of the business. That’s excellent, because it enriches you as a person. If you talk about the company, it is global … this morning I picked up three Dutch colleagues, then I’m going to talk to the London insurance market and then I will have some contact with Singapore colleagues. This dynamic I appreciate a lot.
The Geerdes file
Name: Lex Geerdes
Current position: CEO, Aon Risk Solutions, Benelux, Central and Eastern Europe and the Commonwealth of Independent States. Also country manager, Aon Netherlands
Previous positions include: Joined Aon 28 years ago and had a spell working for the company in Atlanta, United States, before being based in Paris from 1992 to 1996. Move back to The Netherlands in 1997 and was CEO of the business there. Was asked to run Belgium as well in 2007 and from 2009 to 2012 had responsibility for the Nordic countries too. From early this year has been responsible for CEE and CIS, while retaining responsibility for Benelux.
Education: Bachelor’s and master’s degrees in economics from Erasmus University Rotterdam. Also undertook postgraduate training at Insead in France
The Borissov file
Name: Hristo Borissov
Current position: CEO, Aon Risk Solutions, Czech Republic
Previous positions: CEO, Aon Risk Solutions, Bulgaria for four years; has worked for the company for 8 years and has been in the insurance and risk management business for about 20 years
Education: Master’s degree in marketing from the University of National and World Economy in Sofia, Bulgaria. Also has a diploma in risk management in insurance and finance from universities in the United States.