The customer is always in the centre of our operations and taking care of them is a continuous two-way process where we listen to their needs, assess risks and develop our products, says Nataša Kapetanović, Chairman of the Management Board at GRAWE Croatia d.d., for Diplomacy & Commerce. When I say process, I truly mean it. Over the course of almost 30 years of operating on the Croatian market and almost 200 years of operation of our parent company, we have encountered various situations, events, crises, changes.
1. You are at the head of the Management Board of one of the largest insurance companies. How would you describe the insurance market, in general, in Croatia, and is there room for its development and progress?
— After observing the insurance market in Croatia, I am certain there is huge potential for its growth. I’m not referring only to growth from the perspective of insurers, but the necessary raising and development of citizens’ awareness of insurance as the foundation for a safer life and future. Namely, studies showed that our citizens invest in insurance significantly below the EU average, which shows room for growth. At the same time, research shows that the degree of financial literacy in Croatia is at an unenviable level. That is precisely why I believe that the insurers’ responsibility in these segments is great and I can say with pride that we are consciously taking this responsibility. Namely, we invest significant resources in financial literacy of our citizens, both independently and in cooperation with other stakeholders on the Croatian insurance market. This especially involves young people, because our goal is to help them grow into financially responsible citizens, to understand the importance of (long-term) planning and to take responsibility for their future. In order to help them with that, we have 700 of our employees across Croatia at their disposal, who are qualified to respond to all the customers’ questions and requests. Unfortunately, our role is often ungrateful because we also ask some unpleasant questions, like the “what if scenario” that most people don’t even want to think about. However, we have to be aware of these questions because unwanted scenarios do happen, and we see this best in our portfolio. When we take a look at the entire picture, we play an important social role, which is to monitor, respond to different requests and take care of our customers through all their life cycles. From this perspective, there is room for growth in all the segments – from those we already mentioned (financial literacy and increasing awareness of risks) to sales growth in both life and non-life insurance sectors. While 90% of people in Croatia own a property, when it comes to insurance of that same property we encounter a paradox: only around 20% of them are insured. It is somewhat incomprehensible how in 80% of cases, our citizens find potentially big loss in value of the entire, often difficultly gained, fully furnished property more acceptable than a small expense for the insurance premium. Citizens’ awareness of property insurance prices probably also plays a big role, because they automatically connect the high value of the property to the amount of premium. The results of a research show that as many as However, we have to be aware of these questions because unwanted scenarios do happen, and we see this best in our portfolio. When we take a look at the entire picture, we play an important social role, which is to monitor, respond to different requests and take care of our customers through all their life cycles. From this perspective, there is room for growth in all the segments – from those we already mentioned (financial literacy and increasing awareness of risks) to sales growth in both life and non-life insurance sectors. While 90% of people in Croatia own a property, when it comes to insurance of that same property we encounter a paradox: only around 20% of them are insured. It is somewhat incomprehensible how in 80% of cases, our citizens find potentially big loss in value of the entire, often difficultly gained, fully furnished property more acceptable than a small expense for the insurance premium. Citizens’ awareness of property insurance prices probably also plays a big role, because they automatically connect the high value of the property to the amount of premium. The results of a research show that as many as 65% of citizens significantly overestimate the amount needed to insure an average apartment. But property insurance prices are very affordable and surprisingly low in terms of how much value they protect and how much security they provide.
When it comes to life insurance, regardless of the current environment of low interest rates that do not contribute to the attractiveness of traditional life insurance, they are a product of unique value because they offer full insurance protection in the most difficult life situations from day one, while on the other hand long-term disciplined allocation achieves accumulation of assets for certain financial goals, of which I would especially like to emphasize a dignified life in old age. We will live longer, that is great news, but whether we will live better – it remains in the sphere of personal responsibility. Life insurance tied to investment funds are definitely an excellent choice, especially for young people who just joined the labour market and now they have an ideal opportunity to make a decision on a longterm investment of this kind. Compared to the European Union, if we look at the density of life insurance, only three EU countries (Latvia, Lithuania and Romania) have a lower insurance density per capita than Croatia. With an average premium of 399 euros per capita, we are far from the European Union average (2085 euros). Also, the share of gross written life insurance premiums in total GDP is only 0.7%, while the share of gross written non-life insurance premiums is 2.1%, which is why we are significantly behind compared to developed EU countries. These are all indicators of potential further growth in the insurance market.
2. What affects the insurance market development – insurance companies with their offer, the state with its regulations or the clients who seem to becoming more and more demanding?
— All three affect the market almost equally. I already mentioned the important role of insurers in raising awareness and levels of financial literacy, but market development requires synergy between the insurer and the state as the legislator whose regulations significantly affect the development – (financially literate/aware) beneficiary. Of course, there are also external influences. We have felt this best in the last two years, which have shown us more than credibly that we cannot
influence some things in life, even though they significantly affect our lives. I don’t want to sound pretentious when I say that we, the insurers, know the threatening risks and we have been warning about them for years, trying to make people aware that bad things do happen. With our offer and continuous work on products that we adapt to different needs, we strive to support our customers and follow them through all life cycles, each of which brings new challenges – from the first savings usually arranged by parents or grandparents for their grandchildren, through the first acquired assets (movables/real estate) all the way to some form of savings through life insurance policies that accumulate pension funds. If we want to call it customer demands, let’s do that, but we look at them solely as an opportunity to prove to them that they can really rely on us
and that we understand this to be our main role. It is important to just listen to them, understand and, ultimately, provide them with exactly what they need.
3. You are an advocate of the thesis that life and health insurance should receive better tax treatment. What exactly are you proposing and do you have an interlocutor on the legislator’s side in that sense?
— Although at one point there was some form of tax relief on life insurance, it was never really a real relief but rather a deferred tax. It is in the interest of countries – including Croatia – which have, or are projected to have a predominantly old population and insufficient working population, which actually pays so that retirees can live decently, to providing tax relief on this type of long-term investment because they will relieve their system that way. But, to avoid confusion, I am primarily talking about incentives for long-term financial investments (savings) through life insurance policies that are targeted to expire at around 65/67 years of age with a view to improving retirement standards. On the other hand, there are additional health insurances that provide above-the-standard service and this is a tax relief in some countries because it relieves the burden on the state system in many ways. We directly relieve the already congested public health system with paid private services, because we perform tests and procedures at our own expense, but even more significant is the long-term effect. Namely, most of us do not visit doctors regularly, but instead we go to them when something hurts. It’s usually late then, but if we were to take our bodies for a check-up once a year, like we do with our cars, even if some health issues were to arise, they are more easily solvable on a yearly level and they cost the health system less because patients come in earlier, change their habits and more is being done on increasing awareness of responsibility for one’s own health. The math seems to be quite clear here, but we need political will. Given the circumstances we have been facing for the last two years, I think it is the right time to open talks on better tax treatment of life and supplementary health insurance.
4. GRAWE’s main foundation remains customer commitment, stability, reliability and partnership building. How do you address clients and what is the difference between retail and corporate clients from your point of view as an insurance company?
— GRAWE has always been and remains synonymous with security and stability. Today we can say that new users recognize us by that and they give us their trust based on that. They realized that insurance is a product that protects their values and that in that sense they need a partner who pays damages correctly and quickly, attributes profits to life insurance policies and develops an individual approach by always trying to find a solution or response to customer requirements and needs. And we do not differentiate between natural and legal persons, except in coverage that is tailored to their needs and the life cycle in which they are. We tirelessly strive to set high standards of quality and professionalism, and we grow every day in this way. The main role in this segment is played by our employees who, with their knowledge, dedication and continuous work on themselves and aware of the responsible role we have as an insurer, make GRAWE exactly what it is – a trusted partner. This is the dedication with which we constantly strive to be committed to customers, nurture the status of a desirable employer and continuously act responsibly in building a quality community around us because we consider it to be the foundation of a healthy relationship we want to nurture. That is why we use every opportunity we can to do something for the environment, the community, its individuals and ourselves. That is why we volunteer, clean natural sites, afforest, plant, help vulnerable individuals in our community, support cultures, educational and sports projects, conduct campaigns to appeal to greater care for their own health through exercise, sports, preventive and regular checkups and the like. We have projects, initiatives, recognitions, awards, figures behind us and we do not plan to stop .
5. How much has the corona crisis affected your business and what do you expect from 2022 in terms of business development?
— Although the pandemic affected our business and development plans, we successfully identified new opportunities and directed our business accordingly by adapting extremely quickly to the new conditions. Given that we are systematically updating our business principles, moving to work from home was not a problem for us. I am extremely proud that we practically digitized the entire business process in one weekend and successfully organized work from home. This way we continued to provide quality customer support, ensure a safe working environment for our employees and maintain business continuity. Therefore, as challenging as they have been, the past two years have confirmed our status as a responsible employer and a reliable partner. Our sector was additionally affected also by high property damage due to the devastating earthquakes, but this situation has proven that all previous years, responsible investment and conservation policy, and being aware of the risks, prepared us for such an event and that’s exactly what we try to make our users aware. We can proudly say that we have fulfilled our claims extremely quickly and paid our beneficiaries the funds necessary for the speedy restoration of their destroyed property. This event additionally made the citizens aware that not only that such risks exist even when you think that “it will not happen to you” but also that our property is our responsibility and, if we want to be sure that we will be able to restore it to its original state, we need to think about it in quiet times, rather than waving off your hand and expecting “someone to take care of it”. We see this best when we look at the stage of reconstruction of cities two years after the earthquake. Still, regardless of the uncertain and challenging years, GRAWE successfully maintained stability, liquidity and capital position and we will continue to do so. My confidence stems from my successful business so far based on reasonable investment policies, risk acceptance and dispersion, responsible approach and business decisions whose main goal has always been the safety of our customers, partners and employees.