The Ukrainian insurance company “Arsenal Insurance” changed its shareholders. Aleksandr Solop, Sergey Avdeev and Marina Avdeeva joined the founder of the company Maksim Tuz.
In times past, this team had a long enough time to work together under the flag of the Ukrainian company “VESKO”, which was subsequently acquired by the French AXA Group
Before the sale of “VESKO”, Maksim Tuz left the company and founded “Arsenal Dnepr” in December 2005, which was then a local Dnipropetrovsk insurer. After the renewal of the shareholders, many competitors expected that the new team would soon be dispersed, but despite unnerving forecasts, when the managerial conflict comes, this was not the case in a year, not even in three years, or now.
On the contrary, our team continues successfully the joint business and moves forward with confidenceMaksim Tuz, Arsenal Insurance
Over the past years, the insurer’s assets have grown more than fourfold, bonuses, and, accordingly, out payments have grown by 10 times, and the equity capital exceeded the 2023 level by 3.3 times.
Over the past 10 years, the company’s ratings have significantly changed under the leadership of the updated team – from the 18th place the company has made it to the top five not only in terms of gross bonuses, but also in terms of its priority CASCO. Such positive dynamics is encouraging, says Marina Avdeeva, and the fact that the company is also profitable in these circumstances emphasizes the fact that this growth has occurred and will occur “wisely”.
As early as before our arrival, Maksim has laid a solid foundation for development, and when we united, we faced the task of propelling the regional brand to the national levelSergey Avdeev, Arsenal Insurance CEO
Currently, Arsenal Insurance is one of the largest insurance companies in Ukraine, the market leader among companies with 100% Ukrainian capital, which has accreditations in more than 40 leading banks, and is the preferred insurer for the overwhelming majority of national auto traders, as evidenced by the company’s market share in terms of CASCO (7%).
The leading European reinsurers are interested in the company’s portfolio. Today, the company’s brand is one of the most recognizable, with the customers’ satisfaction level ranging from 95 to 98%.
The company pays out to its customers more than 1 million UAH daily. The mean age of 500 employees of the company does not exceed 30 years.
According to experts, the current company value amounts to several dozens of millions of dollars, which is nonsense in the Ukrainian market. Shareholders state that foreign companies and foreign investment funds have repeatedly turned to them of late with an offer to buy a stake, however, the new team connects all its horizons only with its own capabilities.
Today they do not evaluate the chances of selling their company, but on the contrary they seriously think over the possibility of entering new projects on the market themselves.
First of all, we are interested in acquiring several insurers, with a business model different from our own. It is also quite possible that it can be companies from related businesses, for example, auto tradersAleksandr Solop
Given the uniqueness of the business model and the active growth of the company, we asked the company’s shareholders, who are managing partners and top managers, to share their experience on how to build a successful insurance business in Ukraine and how to manage it.
10 Postulates of Success
1. Be innovators and implement ideas.
It was long ago that we realized that any company needs great ideas in order to move forward. Ideas not just on paper, but turned into reality. How to do it? And who can become a new idea hamster? Who can perform the duty of their successful implementation in business? How do new ideas from the team overcome resistance? A huge resource for getting ideas we found inside the company is our employees.
In search of a tool that would allow us to be confident that innovations will be successfully introduced, we exceeded the scope of the industry and resorted to a new recipe for innovations – the Agile model, which came to us from the IT sphere.
The key thing in it is that it is flexible and based on employees’ self-management: they themselves form task forces responsible for the full cycle of innovation, from the evaluation of the idea to its implementation. In this case, the absence of “a pointer from above” and bureaucracy has a fruitful effect on motivation, and accordingly, the performance of people involved in task forces.
As a result, the ideas are implemented quicker, new products and services come into the market, with multiple key processes in the company being modified and improved.
2. Own the company, but do not forget to roll up your sleeves.
The company’s top management is fully represented by shareholders involved in business. Each shareholder has multiple business verticals coming under their management. Our doors are always open.
We communicate directly with the key team members and invest a lot of time in order to get an idea of what is happening in the company, so that to inform people first hand about the company’s goals, values and mission.
Each of us, having wealth of experience in the insurance market, is an expert of their company. We are five members making up a notorious “training department”, which conducts trainings and coach sessions for key people. Also, none of us ceased selling. We personally maintain constant direct contacts with the majority of stakeholders and large clients. This makes it possible to realize the business realia.
3. Hire the best people in your industry and empower them.
The vital rule of thumb of any business – it should involve professionals with competencies indispensable for its functioning. About us we can say that we are in constant search of talents.
Every day the company conducts dozens of interviews with candidates. If it is a case of key positions, then shareholders personally pick out office seekers and conduct interviews with them. As for the middle-level positions, the duty of selecting specialists rests solely with the managers of the respective units. At the same time, the search for us is in most cases headhunting.
Having seriously though over what else can help us build corporate processes more efficiently, we realized that it was not enough to have highly competent employees – it is important to invest them with authority. So and in no other way you can build your “dream team”, as we did.
4. Do not disregard benchmarking – adopt best practices.
We have always closely followed the market and actions of our competitors on it, whom we respect. And if the competitors’ steps are judged by us as successful, we do not consider it shameful to analyze this experience and take it on board.
Being members of an international company, we introduced the experience of a foreign insurer in the Ukrainian market into our own company and made an effort to enhance the strengths of this experience and eliminate the weaknesses.
We knew for sure that such things as multichannel sales system, or conservative investment policy are good, but efforts aimed at building an agency network will end in nothing, rather quite the opposite – you need to focus on partners.
Our knowledge of another insurer’s business model is reflected in its own model. Since then, we have been evaluating and trying to obtain maximum information on our principal competitors.
5. Personalize service.
Now, when companies, while reducing costs, are becoming increasingly impersonal, we, on the contrary, strive to arrange for our clients to be confident that we know them in person. In a highly competitive environment, we consider this to be one of our most important strengths.
For example, we do not transfer the duties of renewing contracts with customers for the next period to the call center, as some market players do, we do not “eliminate” the seller from the loss settlement process, rather quite the contrary, at the level of selling units we guarantee to our clients an accessibility to a “personal manager”, who serves as a consultant for all matters, including the organization of the loss settlement.
Currently, we have been refining a CRM-system involving employees of our call center in order to improve the personalization of service: if the customer’s phone number in the database is correct, they will be addressed by name, with an operator having access to the entire history of the client’s relationship with the company, starting with information on the current insurance agreement and ending with information that they might need.
6. Authorize selling staff with unambiguous duties.
Our company has one significant difference from most competitors: we do not tell selling units “go and sell,” we clearly explain each employee of the selling unit their duties. Each employee is assigned certain sales channels, outlined the actions that they must undertake – we call this a “process flow diagram”.
Employees have duties on the number and quality of visits to partners and customers. While most companies’ task sounds like “go, find and agree up to you.”
If in certain business segments we have a gap, we understand who legs behind and try to get outside of a problem. As a rule, we are faced with the fact that an employee lacks experience or there are other objective reasons. Thanks to this approach, we are less and less confronted with the fact that no one has simply dealt with the sales channel.
7. Create an additional value for your products.
Today we came to the conclusion that when selling a mass product, for example, CASCO or OSAGO, it is difficult for companies to be original for the client, because a set of risks, quality of service, product features of the leading insurers are little or no different.
Therefore, creating an additional value for the client just allows us giving them the difference from others.
For example, we install the Benish GPS anti-theft system for our customers free of charge on all off-road vehicles, as well as premium-segment vehicles. We need this in order to reduce the risk of theft, and the client perceives this as a valuable bonus, which, as practice shows, is subsequently reflected at the level of renewals of contracts with such customers.
8. Do not forget about business digitalization – soon the online sales channel will become the principal one.
Any company, whatever profile may be, will become a process-oriented one. Current investments in IT come up dry for insurers in terms of profits, it is rather a key to the future.
However, keep up doing what you do – you need to systematically invest resources in improving the use of technology of your business. Hire the best IT manager in the market, who will be able to determine the vector of development of this trend in your company, and sell online even now.
9. Define clear goals and make your strategy flexible.
Nowadays, it becomes more and more difficult and complicated to say how “exactly” the company should meet the targets. We do not have a strictly spelled out strategy, but we have clear measurable targets, and how we will achieve them is formed online with focus on today’s realia.
This happened because in our practice we were faced with situations where the strategy ceased working to our benefit, and merely caused irritation in attempts to meet it. Stated differently, we became its hostages, and we had to review it. All this brought about completely wasted efforts, which can be directed by a company’s top manager to implementing other important tasks.
Having a fully spelled out and coordinated strategy for some years ahead, companies often disregard changes that happen to us every day and which they could not foresee at the time of developing the strategy. It turns out that companies go a certain way, when they should have reoriented long ago. That is why we are flexible even with respect to such a grave matter as strategy.
10. Let everything be innovative except for financial policy.
We were repeatedly asked how the company managed to mushroom in a crisis. The simplicity of the answer sometimes stunned our interlocutors: we have always been and remain conservative in terms of policy of formation of insurance reserves (we have always had an excessive reservation), as well as in terms of allocating these reserves.
We kept them only in readily obtainable assets – on settlement and deposit accounts of highly credited leading banks, many of which were foreign, and mostly in foreign currency.