The competitors of CMCM, a complementary health insurance fund, are not openly rejoicing in the insurer. But commercial rivals clearly see it as an opportunity to win back customers. Case in point: published in early April, aimed at customers whose "confidence" has been "shaken" by the situation at CMCM.
It has to be said that the market is buoyant. "The various supplementary health insurance schemes play an important role in covering actual medical costs, over and above the involvement of the Caisse nationale de santé", the publicly National Health Fund, stated the Luxembourg Insurance and Reinsurance Association (Aca). "Health costs continue to rise and the number of private health insurance policies is increasing steadily.”
CMCM is taking full advantage of this trend. "For a player that already has almost half the country as members, our growth is still impressive: around 2 to 3% net growth every year," CEO said in February. And the recent turbulence has not broken this momentum, CMCM chairman Gilbert Goergen stated this week. "We are continuing to win customers at the same rate as before."
There’s no need to comment on the products of other players in the market.
Ten years ago, the mutual did not display such form. When he arrived as CEO in 2015, former banker Secci was given the task of reinvigorating the company to attract a younger customer base. He has succeeded. But not without causing some gnashing of teeth among insurers, who have gradually taken a dislike to CMCM's thundering boss.
Goergen said in an interview that he does not believe the commercial approach was too aggressive: "Ten years ago, the demographic structure of our customer base was worrying and it was necessary to attract young people. Mr Secci succeeded in this mission. The real problem was the way he communicated with the other players in the market. I think we just need to communicate about our products, we don't need to comment on the products of other players in the market. Mr Secci was perhaps too aggressive in that respect, and I won't accept that any more.”
For its chairman, CMCM needs to refocus on its mission as a mutual insurance company and not on competing with insurers. "In fact, we have no competitors in the traditional sense, because we are a mutual insurance company. We accept everyone, regardless of age or state of health. Moreover, mutuality is governed by specific laws."
Legal action
From the insurers' point of view, this is the problem. Although CMCM is not subject to the same solvency and supervision rules as insurance companies, the mutual has ventured into "their" territory by offering group contracts. Aca is demanding that "healthy and fair conditions of competition be re-established". After years of fruitless discussions with the government, the association has appealed to the Administrative Court to challenge the approval granted to CMCM by the Ministry of Health. The case was heard last January.
Goergen is serene: "We are continuing our activities as before. If the court decides otherwise, we are prepared to adapt.” It was pointed out to him that the CMCM has changed its articles of association several times recently. Is this a sign that not everything is in order? "Not at all. These changes were in response to our internal challenges, in particular replacing the position of director general with a management college. These changes are independent of any external pressure from insurers."
We need to get rid of this preconceived notion that the unions run the CMCM.
Goergen said the CMCM should not be subject to the same rules as insurance companies. "A mutual is fundamentally different from an insurance company, in particular because we do not select risks," he argued. He is in favour of strengthening internal and external controls: "We already have an internal audit committee and BDO audits our accounts, but that's not enough. I have set up committees within the board of directors to improve our monitoring.
The aim is to become more professional. "Not necessarily as an insurance company, but rather as a professional not-for-profit association," said Goergen. "We're going to do it ourselves because I want to respond to this criticism from the insurance companies, which I accept. But I would also like the law on mutual societies to be adapted so that we have a duty to do so. We plan to meet government officials in the coming weeks to discuss our plans."
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Political pressure
The health minister (CSV) has already listened to the insurers. Until now, she has held back on this issue. Deprez is no less the focus of the hopes of the mutual's competitors, who have long had to contend with Socialist health officials who were reluctant to touch the CMCM. The mutual insurer remains closely linked to the trade unions. For commercial insurers, this influence has played a role in the excesses observed. In particular, it has allowed CEO Secci, accused of unjustified remuneration, to feel untouchable.
"Our board of directors is diverse, with half union members and half other members," retorted Goergen. "We have to get rid of this preconceived idea that the unions run the CMCM. We are a mutual, which is fundamentally different. We are working to establish governance worthy of a professional company, by applying strict rules of governance to ourselves. While operating as a mutual, we accept and apply modern standards of corporate management."
After two years with nothing new, we are actively looking for new ideas.
A trade unionist himself, Goergen sees himself first and foremost as an "administrator": "My position is completely neutral. Within the Confédération générale de la fonction publique [the civil servants trade union], where I am also active, we have a strict rule that forbids any political involvement for those who hold central or executive positions. This is essential to maintain the integrity of our work."
How does CMCM intend to position itself in the future? "Although we are still attracting new customers, I think we could do better," said Goergen. "It's crucial that we continue to improve our offering and our services in order to strengthen our growth. After two years with nothing new, we are actively looking for new ideas to better serve our members. I have set up a committee specifically dedicated to this objective."
These ideas will be centred on "the real needs of our members", he said. "It's not about offering free holidays or superficial benefits. Modifying the catalogue of reimbursements is one possibility. But we are also exploring other ideas to enhance our offerings."
Read the original French version of this interview