Success in the insurance industry rarely starts spectacularly, but it often ends globally. In this episode, Paul talks about two entrepreneurs who turned small organizations into global corporations and three lessons that can make or break a company.
When you look at large insurance groups today, you see capital strength, brand power and international presence. But many of these groups started out surprisingly inconspicuously: as small mutual insurers in the provinces.
Two managers, one in Spain and one in France, started out in exactly the same way. Decades later, their companies are at the top of the global market with a broad product portfolio and innovative strength. The decisive factor was not the starting point, but the consistency of the development.
But Paul’s story goes back even further to two entrepreneurs who fundamentally shaped the international insurance business.
The insurer from Shanghai
The first founded a business in Shanghai in 1919 and expanded throughout Asia. Wars and revolutions eventually forced him to return to the USA. His successor took over a much smaller organization and turned it into one of the most profitable insurance groups in the world.
He regularly stopped in Zurich on his trips to the Swiss Alps. There he had passionate discussions with Paul about business models.
Two lessons were learned from these discussions.
Lesson 1: No money without size
Insurance is a business of scale. Risks can only be calculated stably if they are spread across a large number of customers.
Small insurers have a structural problem: too little data, too little diversification, too much fluctuation.
A wave of mergers followed, confirming the theory that if you don’t grow, you disappear.
Lesson 2: Innovate every day
The entrepreneur put it provocatively: “Competitors copy innovations, but first they copy your mistakes.
Innovation remains necessary, even if it is immediately imitated. The decisive factor is not the individual idea, but the continuous learning curve. Those who learn faster stay ahead.
Lesson 3: Innovation needs discipline
The company later innovated outside of insurance in areas that were not part of its core business. During a financial crisis, it almost went bankrupt as a result.
The third lesson therefore only emerged in retrospect: not every innovation makes strategic sense. Innovation without risk competence itself becomes a risk.
Conclusion
Size ensures stability. Innovation secures the future. But only focus ensures survival.
Binci Heeb
Paul the Insurer has other content that may interest you, such as the series of interviews with insurance industry executives.
Read also: The young disruptor
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