“Let me ask you a question,” says Gil Baldwin, before my notebook is even open. “You can ask some in a minute.”
Aware of the fact that the subject of my interview is a former army officer, I soldier on bravely. It’s my interview, after all.
“Tell me,” I insist. “What are your biggest achievements since joining Norwich Union Healthcare?”
Almost reluctantly – “I’ve done nothing, it’s all down to the hard work of the team” – Baldwin shares some figures.
While he refuses to take the full credit for them, those figures stand as an impressive record of his achievements since joining NUH in 2006. With clear breathing space now between NUH and fourth placed Standard Life Healthcare – at £74m its annual PMI sales are around three times larger – few would argue that the provider now bats in the same league as market leader Bupa and second placed AXA PPP healthcare. NUH’s UK PMI business was up 20% in 2008 and its share of the group life market, meanwhile, has grown over the past five years from 3.5% to around 16%.
But in spite of the success, Baldwin remains focused on what he believes is the very reason for that growth. Looking after the customer is a more sustainable model, he says, than simply being acquisitive.
“We’re looking for growth of between 0.5% and 1.5% a year,” Baldwin says. “We think that’s a sustainable growth target without, frankly, buying market share.”
For all of the impressive figures, Baldwin insists that “it isn’t just about the numbers”. He says he is committed to reshaping NUH as a broad health and care company, whose influence and scope extends far beyond simple insurance. While delivering value for shareholders is paramount, this can only be achieved by looking after the customer, both at a consumer and corporate level.
The philosophy, Baldwin says, extends from the core values that are at the heart of NUH’s parent company Aviva.
THE AVIVA EFFECT
As part of a high profile rebranding exercise – Bruce Willis was among the Hollywood megastars to front a TV advertising campaign earlier this year – the Norwich Union name will be dropped right across the group and NUH will be known as Aviva from June 1st of this year. The Aviva philosophy, Baldwin says, is “very simple”.
“We – Aviva – are all about recognising you as an individual, treating you as an individual,” he says. “It’s about knowing that you are unique and special. Our whole customer process is entirely being rebuilt to look after you, the individual, whatever your needs are.”
He continues: “We don’t want to be a company that dictates to you once a year that your premium has gone up. I want to have a conversation with you. I want to know if you actually want my product or do you want something else? So all our shift in product design and what we’re offering is all about making it modular.”
According to Baldwin, corporate and consumer customers want “more than just PMI” now and want to be able to plug in and take out different products and services as they go through life.
In order to achieve this, Baldwin says a large part of his focus over the past three years has been investing in the infrastructure of the company.
“We are now getting to the point where service-orientated architecture is starting to deliver in terms of things like straight through processing, automated quote and apply and so on,” he says.
With this infrastructure in place, it means that NUH is now able to truly call itself a health and care provider, in addition to its function as an insurer. By providing a broader range of services, NUH is better able to adapt to customer needs and demands, he claims.
The range of services NUH could provide access to in the future is likely to broaden, Baldwin explains. He says the trend for its customers looking to it to provide expert advice on healthcare matters is only likely to continue.
It has, for example, already piloted a programme in the Guildford area where customers were able to look to it to “kite mark” clinics that provide laser eye surgery.
“We wanted to see if people could associate our brand with something like a kitemark,” Baldwin says. “We also want to look at things like dietary supplements.”
There could even come a time when NUH would be able to signpost people towards certain types of cosmetic surgery since, Baldwin argues, healthcare can mean many things to many different people.
“With our supply chain dynamics customers will be able to get services at a better price,” he says. “We’re not interested in making any money out of that. We think that’s a service, that’s part of the ongoing dialogue we have with our customers. That isn’t a huge revenue earner and never will be.”
Of course, NUH’s reputation as a provider of services in its own right is growing, since it acquired an occupational health business, Rehabilitation UK, in 2005. However, Baldwin is keen to point out that NUH will only actually move into actual service provision itself if it believes it can add value to those services that are already available through third parties. The provider currently has a very successful relationship with HCML, for example, an independent provider of case management, occupational health, and vocational services.
HOSPITALS AND DOCTORS
NUH’s relationship with private hospitals has also changed during Baldwin’s time at the organisation, thanks both to its growing influence in the healthcare market as well as the changing ownership structures of the hospitals themselves.
“In order to become a player who can command an equally weighted conversation with those players, we had to grow a bit,” Baldwin explains. “We are now seen as a credible player, alongside the biggest two insurers in the market, of sufficient size, weight and promise to be worth having a sensible conversation with, as opposed to simply being told about what price increases are going to be brought in.”
Baldwin is clearly determined to use NUH’s increased clout when demanding the very best services and value from hospitals on behalf of its customers.
“I’m not interested in handing my customers over to the hospital groups never to talk to them again,” he says. “I absolutely want to know exactly what goes on in those hospitals, what are the medical outcomes, how do my customers feel and start to get what I consider to be normal supply relationship management. I’m not just the hospital billpayer, I am absolutely one of their customers. I have no compunction in going to any hospital group on behalf of my customers and telling them their service isn’t up to scratch. That wouldn’t cause me to lose sleep at all.”
Fortunately, there has been a “fundamental” shift in the conversations that NUH has been having with some hospital groups since they have been taken over by organisations either from overseas or which are not from a “traditional” medical background.
“Our conversations are now all about medical outcomes, how do customers feel, how fast they recover, what are rehabilitation services, where is the industry going on and so on,” he says. “We’ve been having some very exciting conversations with hospitals and that’s very welcome. The provision of PMI-funded healthcare has been pretty static and lacking in innovation for many years. Where’s the drive to better treatments, to shorter stays in hospital?
“Those sort of conversations have been really welcome because until very recently insurers have been barred from them because it has been felt [mistakenly] that insurers are only interested in cost.”
This sense of customer advocacy and support extends, Baldwin argues, into NUH’s relationship with the intermediary community. He believes that NUH has an excellent reputation among brokers and advisers and he remains committed to working in partnership with them in order to grow the overall healthcare market. That, however, does not extend into buying distribution which, he suggests, would contradict NUH’s core values.
“Our core values as a company are all about the right decisions for our customers at the right time,” he says. “To a certain extent we feel there is a conflict between owning a brokerage and giving independent advice. If you, the manufacturer, owns the brokerage that sells your products, is there still independence of advice? I’m sure that competitors [that have bought brokers] have made absolutely sure there is, but nonetheless, we think that’s a difficult tension to manage.”
Baldwin and his senior colleagues at NUH “simply can’t see the value” in buying brokers.
“It doesn’t fit with what we were trying to do, which is to encourage an independent, healthy marketplace,” he says.
So what lies ahead for the marketplace as a whole? While the NHS might be improving in some areas, that could change as the increased funding begins to run out, presenting opportunities for the private sector. So- called NHS top-ups, meanwhile, also have a part to play, although not, perhaps in the short-term.
The Department of Health recently confirmed that NHS patients would be permitted to pay privately for additional treatment without compromising their right to free care, something which Baldwin welcomes but says is not going to revolutionise healthcare overnight.
“From a strategic point of view, it’s huge,” he says. “But from a market point of view right now is pretty small. Right now we don’t think that it’s a huge market. The reason why it’s strategically important is that this is the first time the government has said, in essence, that it’s OK to have a two tier NHS. Ultimately that will lead to quite significant market opportunities.”
The major opportunity for NUH, however, will remain around maintaining its commitment to servicing the specific needs of the individual customer, whether that be a corporate or a consumer.
“Underpinning all this is our absolutely fundamental belief that the only reason we are here is to look after our customers in their time in need,” he says. “Sometimes the insurance industry – not everyone, but some – forgets about them.
“It’s about recognising that each and every one of us needs to feel valued. It doesn’t matter whether you’re an intermediary, an individual customer, a corporate, or our staff – we all want to be treated as an individual. We all want to get out of bed on a Monday morning feeling that what we do as a human being is worth something. As a company that is something that we recognise as a fundamental need and right.”
With this in mind, then, I suppose the question he asked at the beginning of the interview perhaps isn’t so surprising. “Let me ask you a question,” he asked. “What do our customers think about us?”