The year 2020 was not easy for the global insurance giant Liberty Mutual Holding Company that operates in Spain and Europe through the firm Liberty Seguros. On the one hand, the coronavirus pandemic made a dent in his income statement. Specifically, covid-19 had a negative impact of 571 million. On the other hand, climate change increased the number of natural disasters it had to face by 70%, resulting in an extra cost of 2,000 million euros.
According to data from the third largest insurer in the United States, its profits at the end of last year fell 27%, to 768 million dollars (645 million euros). The effects of the pandemic have also been felt in the subsidiary Liberty Seguros, which includes Spain, Portugal and the two Irlandas, headed by the American multinational as CEO of Spanish Juan Miguel Estallo last November.
In the absence of detailing the company’s data in Spain and Europe from last year, Estallo explains the punishment to policies in the automobile sector, a consequence of the stoppage of activity and also of the economic difficulties of the clients, after a Good 2019. “In this sense, we have also been very flexible, providing payment facilities.” The cross of the crisis occurs in small and medium-sized companies “which, if they are not active, the first thing they do is to unsubscribe from their insurance policies.” Where there has been an opposite effect is in the household segment, explains the manager, with higher coverage as a result of teleworking. “Confinement has not been an impediment to change coverage in an agile way,” explains Estallo.
The last ranking corresponding to September of last year of the Cooperative Research Association between Insurance Entities (ICEA), the Liberty group occupies eighteenth place in Spain —a total of 96 insurers— for written premiums with a value of 585.6 million euros and a growth 1.07%. Its market share in Spain reaches 1.36% in a sector dominated by Vidacaixa, Mapfre and Mutua Madrileña.
But covid-19 has also become a transformative force for Liberty Seguros. The insurer has become the first company to establish permanent teleworking if its employees so wish. This groundbreaking decision, which was announced last week, comes after 93% of its 2,000 workers from both Spain and Portugal, Ireland and Northern Ireland voted in an internal poll about their desire not to return to the office.
A decision that could be copied by other subsidiaries of the insurance group, although the company explains that there is no group policy regarding teleworking. “Europe is a suitable market both because of its maturity and because it is better prepared by good internet coverage. We are pioneers within the organization ”, explains Estallo. Liberty has invested 100 million euros in Europe in a teleworking model in the cloud thanks to the services of cloud computing from Amazon.
Flexibility when working has been a clear incentive to explain the result of the internal consultation that has led to offering permanent teleworking. The CEO himself affirms: “I had not taken my children to school for years and now I can.” Thus, the employee can organize his time according to his needs as long as he complies with his working hours. A control that is done in a simple way after introducing yourself or saying goodbye to the computer.
A complete revolution for a sector such as the insurer that is characterized by being very conservative. Liberty landed in Spain in 2001 acquiring other companies and has a long history of purchasing. The last, in October 2019, when they took over the businesses of Nationale Borg, Nationale Borg Reinsurance and AmTrust Insurance Spain.
Liberty Seguros considered compensating its workers for the costs incurred from working from home, an issue that raised much controversy in Spain. Juan Miguel Estallo explains that during 2020 they provided an allocation of 460 euros for employees to adapt their home to work (tables, ergonomic chairs, shelves …). In addition, they gave another 200 euros for additional expenses such as internet. “When teleworking is already a permanent possibility, our employees will receive a supplement of 660 euros per year to mitigate any additional cost for working from home,” he explains.
Other unknowns of this measure are what to do with that 7% of employees who want to return to the offices and what use can be given to thousands of empty square meters in the work centers. Its CEO insists that the measure is voluntary and that workers who want to be able to return to their facilities. Of course, for the rest of the employees they will transform the offices into meeting points where personal contact is maintained in those tasks that require it and where they can also eat together, have a coffee: “Something especially suitable for new workers with the aim of establish and also maintain a relationship of trust ”.
Thus, the head of the Liberty insurance company for Europe rules out disposing of the buildings or closing them. However, he accounts for the cost of salary supplements for teleworkers and the savings on supplies from offices without employees. And he points out that the cost has risen to one million euros, which coincides with the savings produced in its facilities.
Liberty does not plan to reduce the workforce and this labor revolution does not pursue that objective, according to its manager. The company wants to invest “in the technical part, to be more flexible and agile, and that will lead us to sign because the objective is to gain market share”. A growth that will come from the organic part, although the company does not rule out new acquisitions.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.