Van Lanschot Chabot

Optimization of business performance

Van Lanschot Chabot (VLC) is one of the oldest and most prominent insurance brokers in the Netherlands. As an insurance broker VLC is not limited to solutions of one particular insurance company, allowing it to advise clients in many areas and to address specific and customized insurance requirements. Due to their size and excellent reputation, they have access to almost the entire insurance market, guaranteeing their clients an optimal solution. VLC specializes in the insurance needs of medium and large enterprises, as well as those of director-shareholders and independent professionals. In 2007 Van Lanschot Bankiers (bank) sold 51% of the company to De Goudse, another Insurance company, but neither company influences the independent position of VLC. 

“VisionWaves delivered timely insight in the coherence of our information and made it possible to put the right controls in place, so that our organization improved its EBIT in a time when the competition and the market in general exhibited a tendency of decreasing EBIT.”
Richard Schoones, Director Van Lanschot Chabot

Challenge

VLC has specified some clear strategic goals. They want to become a top-intermediary by providing advice and retail products through multiple channels, improving efficiency and growing in an organic way. In pursuing these goals they were confronted with both external and internal challenges which impacted how this strategy had been translated into their operations.

From an external point of view markets came under pressure and margins were decreasing, requiring that VLC become much more efficient.
Internally organizational adjustments occurred due to the change in ownership. Previously most fixed costs were born by the bank; control was easy, based on the booked provision. But through the self-sufficiency of the insurance branch, fixed costs had to be on-charged and the control mechanism shifted to gross margin. Due to limited visibility, some fixed costs were misallocated, resulting in a distorted view on the efficiency of the organization. To illustrate this, charging the overhead cost from experts in a proposal depended on whether the individuals resided in that office or not. Moreover, there were no clear key performance indicators or service-level agreements, and many of the costs could not be linked to any product-service combination.

Solution

To overcome these shortcomings, optimize performance and become a top-intermediary, VLC needed to create coherence of the available information, and so achieve insight of how all parts of the organization interacted, and to define the value contribution of the different product-service combinations.

A strategic Value Chain initiative was started based on the VisionWaves methodology and this resulted in implementing one dynamic management dashboard in the VisionWaves software. Performance indicators were redefined to enable and combine Business Performance Management, Business Process Management and Risk and Compliance Management. Furthermore this approach allowed VLC to get insight into the execution of their strategy over the different product-service combinations, the different customer groups, the different channels, the operational processes and the resource utilization. It also provided visibility into a better cost allocation, shifting the control of the organization from gross margin to EBIT.

Following this successful implementation, the PDCA cycle available in VisionWaves will be used to improve and support the budget control process and VLC is exploring how to use VisionWaves to support the transformation process of integrating acquired companies.
 

Benefits

VisionWaves enabled VLC to optimize business performance, and to control the organization and its projected growth, by collecting the available information in a structured and objective way. VLC can now steer its organization at the ‘nerve system’ level without losing the overall picture of the organization, leading to more appropriate policy formulation and increased operational excellence.
By delivering this insight to how value is created and by providing a more accurate allocation of costs across customers, services, channels and locations, VLC transferred control to EBIT. As a result of this better allocation, VLC discovered between 1,5 and 2 million Euros in costs, consolidating to an EBIT of 9%. Other benefits include a more pro-active Management Team, further cost reductions, improvement of the project portfolio and a much clearer focus through use of appropriate performance indicators.

Finally, as a side effect of the integrated approach, a prior workflow project has been enhanced and is now fully delivering on its previous promises related to operational excellence.