Andrew Bibby



Andrew Bibby is a professional writer and journalist, working as an independent consultant for a number of international and national organisations, and as a regular contributor to British national newspapers and magazines. He is also the author of a number of books.

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Profile of a chief executive:

Asmo Kalpala (Tapiola, Finland)

This article by Andrew Bibby, in a slightly different form, was first published by ICMIF (International Cooperative & Mutual Insurance Federation) in Voice magazine, 2008

Asmo Kalpala, president of Finland 's major mutual insurer Tapiola, was smiling broadly at last year's ICMIF Congress in Brussels. “I'm really happy – we've been working for this for a long time,” he said, shortly after the meeting which formally endorsed the creation of AMICE, the new European mutual insurers' federation. He himself now becomes the organisation's first President, playing a key role in helping the fledgling body establish its secretariat and begin its lobbying role.

The coming together of ACME (ICMIF's European body) and AISAM which has created AMICE makes every kind of sense for Asmo, for his own company has been a member of both organisations for the past twenty-five years, ever since Tapiola itself was brought into being by the merger of two Finnish mutuals. “At the merger, one was a member of ICMIF and ACME, and the other of AISAM. But having the two federations was a pity – mutuals didn't have one voice in Europe,” he says. AMICE, he believes, can rectify this, taking a much more pro-active role in Europe in defending mutuals' interests. “We have very big issues to lobby for,” he points out, talking of the EU's forthcoming Solvency II regulatory framework and the work being undertaken to develop the European Mutual Society legal structure.

But if Asmo is clearly delighted that AMICE is now up and running, he has also ample reason to be satisfied at progress in Tapiola itself in recent years. He came in to lead the mutual at a difficult time economically for the organisation, but is now presiding over a group which enjoys a strong reputation in its home Finnish market and which is increasing market share at an encouraging rate.

“We call ourselves the leading mutual in Finland,” he says, explaining that the Tapiola name spans a group of seven companies, each separately established legally with its own managing directors. Tapiola General (the non-life insurance business), Tapiola Life and Tapiola Bank are at the heart of the group, with other subsidiaries covering, among other things, banking business and fund and asset management.

“The degree of solvency of the companies is high, and because of our mutual form we're able to improve our services. In non-life, for example, we are number 3 in Finland, with 18.5% of the market. The top two firms are listed companies owned by major bank groups, but our market share has been increasing steadily for the past twelve years,” Asmo says. Tapiola General increased the number of private customers by 16,000 last year to over 850,000, whilst at the same time increasing also the number of corporate and business customers, now at around 30,000. “Without any company acquisitions, Tapiola General's market share has grown in the 1990s and 2000s by approximately 50%,” he adds with obvious pride.

But competition in Finland is tough, with the banks playing a key role in delivering insurance products. “Bancassurance is totally dominant,” he explains. It means that, to fight back, Tapiola has had to play the banks at their own game. The company began fund management and asset management operations five years ago, and three years ago took an even more dramatic decision: Tapiola would create, from scratch, its own bank.

Tapiola Bank is, Asmo admits, still a relatively small operation, though it can already boast 110,000 customers and began turning in profits for the first time in 2007 a year ahead of schedule. The aim has been to persuade Tapiola's insurance customers to sign up for banking services, too, and about forty of the company's existing network of 60-70 branch offices have been expanded to offer banking facilities. However, Tapiola Bank also focuses strongly on the internet, offering a sophisticated home banking service for customers. It means, according to Asmo, that the cost base of the bank is very low.

2007 has seen another potentially significant development, with the decision to enter the real estate market. Tapiola Real Estate began trading as a new subsidiary of the group in January 2007, and managed to turn in a small profit during its first six months of operations.

“Our sound base in insurance is allowing us to invest for growth,” Asmo says. But it also means that Tapiola's customers, or rather its ‘owner-customers' as the organisation prefers to call them, can benefit from members' rebates and benefits. Tapiola strongly focuses on the strengths which come from its mutual structure: mutuality lies behind everything, the company asserts firmly.

Members (all policyholders are automatically members) can engage in Tapiola's operation and governance in two main ways. The four main companies in the group have their own Supervisory Board of elected members, representing different geographical regions of Finland and different client segments. The Supervisory Boards range in size from 15-28 people, who tend to be individuals who have been involved in supporting Tapiola for a long time. The chair and vice-chair of each Supervisory Board together comprise the eight-strong Supervisory Board for the whole Tapiola Group.

Most of the people elected to the Supervisory Boards are likely to have been active in the network of advisory committees, which act as the main informal channel of communication between the company and its customers. There are twenty regional advisory committees, an advisory committee specifically for the small business sector, and another for the agriculture and forestry sector. Between them, about 270 members are active in this way.

Tapiola has been exploring ways of strengthening its mutuality in recent years, and two years ago asked the advisory committees to choose from their members a small team who could form an independent committee to audit and report on the company's strengths and weaknesses in this respect. This committee reported for the first time in late 2005, and its recommendations (which included proposals to improve the visibility of the advisory committee system and to work to improve member representation at annual general meetings) were subsequently referred to the organisation's senior management. One encouraging aspect of their report was the finding that Tapiola's own employees (now around 3000 strong) were strongly aware of the company's values and commitment to mutuality.

There is evidence that this message is getting communicated out to Tapiola's customers as well. In 2006, for the third year in a row, the Tapiola group was chosen as the most trustworthy insurance company in Finland, in a survey conducted by Reader's Digest. Trustworthiness, the survey found, was partly based on the quality of products, partly on the way customer needs were met and partly on the perceived ethical values of the company.

Tapiola has deep roots in Finland – indeed, Asmo Kalpala points out that 2007 marked the 150 th anniversary of the one of the original general insurance operations which over the years has been absorbed into the Tapiola family. Looking ahead, he is optimistic for future development of the group – maintaining, he says, the special mutual features. “We've not succumbed to the merciless machinery of the economy, but have been able to treat each other like human beings in our work. That creates power!,” he says.


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