Leon van Riet (NN Group) on the Pension Transition: ‘Time to Dive In’

Since 2020, Van Riet has been CEO at NN’s ‘life business’, as Life & Pensions is colloquially called at NN. Bloos observes that it forms ‘a substantial and significant part’ of NN Group and ‘therefore’ Van Riet may call himself ‘an influential person within NN,’ although Van Riet himself is visibly uncomfortable with this designation. ‘No, that is not at all how I see it. I do of course enjoy working on something substantial. But NN’s strength is that we are at home in several markets. One is not more important than the other. In fact, future growth must also come from the other parts.’
Prior to his tenure as CEO Life & Pensions, Van Riet led the Non-Life division within NN. And for the nearly 20 previous years he worked at Delta Lloyd. He is one of many who came with Delta Lloyd, following its acquisition by NN. According to Van Riet, there no longer is any question of blood ties, let alone a blood tie feud. Van Riet: ‘No, that is not an issue. With the takeover, I think we proved that one plus one can be three. We now have the best of both worlds. Very occasionally there is a knowing glance among colleagues, as if to say, ‘Ah, you are from Delta Lloyd, just like me’. But with so much new influx and several recent acquisitions, there no longer is any question of blood ties.’

If I hear the stories about you, you are primarily ‘a doer’, ‘someone who knows what he wants’, ‘someone who primarily focuses on the results’ – do you relate to this?
‘I am definitely results-oriented. I always set the bar quite high for myself. Consequently, you come to expect other people in your environment to do the same. I always try to have a clear understanding of the task ahead, keeping the long-term vision in mind. I then try to convey that vision to the organization as an inspiring, beckoning perspective. And then, together with the organization, we put our shoulders to the wheel. That is my approach, my style. This results-driven approach goes far beyond only financial results. To me it is mainly about customer satisfaction and employee satisfaction. And, above all, about sustainability.’

If you look back at the last seven years as CEO of Non-Life and now Life & Pensions, do you do things differently now than you did in the past?
‘I have developed over the years, fortunately. Through my experience I now have a better grasp of what to pay attention to and, more importantly, where to ease off. I have become more efficient in that regard. Especially when I look back 10 or 15 years, I can clearly see a difference in myself. The younger version of myself tended to see everything as crucial. These days, I am much more adept at letting things go. I try to empower the organization and I am confident in delegating, trusting that I only need to step in occasionally. Letting go took effort at first, but I am getting better at it. And I must, because my dual role as CEO and board member means there is a lot on my plate each day. I simply cannot be involved with everything.’

What do you consider your most significant success at NN?
‘I would say my time in the Non-Life business. When I came over from Delta Lloyd it was a considerable task to integrate those two claims businesses - each with its own idiosyncrasies and problems. And it worked out wonderfully well. We managed to merge the two cultures. It was a successful integration and an inspiring time. Immediately following that integration, we got the opportunity to take over the VIVAT Non-Life business as well. Then we went full speed ahead, ‘attack and breakaway’ you would say in cycling terms. We built our position as market leader from these three separate companies. It is incredibly motivating to have played a part in this.’

Is that what gets your heart racing: transition, integration?
‘Yes, that definitely excites me. It is also my background and my expertise. I started at KPMG as an integration specialist. But I find other things interesting too, you know. Customer contact, for example. I always enjoy identifying customer needs and working on them. Developing new use cases. I visit many customers and consultants to talk about all kinds of developments. I have set a personal rule to dedicate at least a quarter of my time to client engagements. One risk for a CEO is that you end up only dealing with internal matters, within the four walls of headquarters. This is all very important, but it is not the core of what matters; ultimately everything starts with the customer.’

Speaking of transitions, a major change for you and your organization is the new Future Pensions Act (the ‘Wtp’). How is that transition progressing?
‘The new pensions act is causing a radical and extensive change in the pension landscape and therefore also for us. As a sector, we have four years to complete that transition. We are in the thick of it now. It brings about a considerable amount of changes. The new pension scheme is going to offer many new opportunities. We want to capitalize on that. We certainly do not want to be defensive but instead want to go the extra mile to serve our customers even better in the future. It is very important to inform the customer well about what the new system entails, especially because there will be many more choices the customer will need to make in the future. That involves a lot of things: effective communication through effective portals, for example. A monumental task.’

How is the pension transition progressing within NN?
‘We are at the forefront with two of our three pension labels. Both NN and BeFrank were the first in the market to be ready for the Wtp. They were the first to offer customers the new product. Our third company, pension administrator AZL, still has some more work to do, but we are making good progress there too. I am proud of our pioneering role. I also really want to take responsibility. We do that for instance by organizing knowledge sessions for the pension sector. This way, we hope to mobilize the market.’

There currently is still much fuss around the Wtp, especially in The Hague. For example, a new cabinet is forming, with parties that do not approve of the new system at all. Does that worry you?
‘The uncertainty about the transition to the new pension system is not beneficial. The Wtp has been discussed for fifteen years now and it is time to implement the new rules. The ongoing discussions are causing a wait-and-see approach among the parties involved. We already notice many companies saying ‘let us wait just a little longer before adapting our pension organization and complying with the new legislation.’ As a result, there is a risk that in a few years, as the deadline approaches, we will truly face problems. We need to make progress now to prevent that from happening. So yes, let us get to work on that Future Pensions Act!’

Are Dutch companies adequately engaged with the new pension system?
‘That worries me sometimes. During every parliamentary debate I hear administrators saying they prefer to ‘wait a little longer’. That is a risk, and it is not in our best interest. Regardless of how the discussion evolves, if you take a step back, you can clearly see where the pension system is heading. The end goal is set, although the path to get there may undergo some limited changes. It is also in line with international pension trends. The pension sector has less than four years left for the transition, so it is important companies start working on it now. If not, the pension sector will run out of time.’

Another crucial issue for you was the resolution of the matter concerning the usury policy affair. At the end of last year, NN reached a settlement agreement with the parties involved. How do you reflect on that?
‘It is very satisfying to be able to close that chapter soon. Ensuring the proper implementation of the agreement we have reached with the claim organizations is now my top priority. We aim to have it fully implemented within a year and a half. Reputationally this has been a very damaging issue for us. It is reassuring that there will soon be a definitive conclusion, especially considering all the market changes and the new pension legislation. We can then look at the opportunities in the market with an open mind.’

As CEO, you will undoubtedly pay close attention to artificial intelligence (AI), perhaps even in claims handling. How do you assess opportunities and risks?
‘AI is moving so fast that we do not even know where we will be in three or five years from now. But I see many applications in AI that we as an insurer can benefit from. We possess a vast reservoir of valuable data, and AI can assist us in extracting insights from that data. Above all, I see many opportunities for which we will certainly develop new use cases. There are of course also risks and we must do everything we can to have security in place and ensure customer privacy. We are and will remain extra alert to that. AI models should never be allowed to make completely autonomous decisions in our industry. Such models may never reject or grant a claim for us. Ultimately, a human being will always be responsible for that decision. But AI can certainly assist us in reaching a well-informed and balanced decision.’

NN is fully committed to climate goals and ESG policies. What is your focus in this regard?
‘With an investment portfolio of over 130 billion euros at Life & Pension, we of course are in a position to make a difference - especially in equity investments and in our loan portfolio. Our ambition is to get emissions based on our investment portfolio to net zero by 2050. We are putting a lot of effort into that. But our ESG agenda is much broader. While the ‘E’ part is important, we also pay great attention to the ‘S’ part. We prioritize good employer practices in addition to our insurance propositions, with extra attention to absenteeism, reintegration, prevention and caregiving.
An interesting project we are currently working on is ‘the continued employer (de doorwerkgever).’ This initiative focuses on people around retirement age, a group that experiences significant absenteeism. We aim to address this issue more intelligently, for example by offering part-time work arrangements or enabling individuals to continue working beyond the retirement age. We are investing heavily in our human capital planner - a data dashboard that brings together all kinds of relevant pension and HR insights from the company. Having a thorough understanding of your workforce will become increasingly important in the future, I am convinced of that. We are only at the beginning of what is possible in that area.’

Looking ahead to the next few years, what will success look like to you?
‘I will be particularly satisfied when we have successfully completed the transition to the new pension system. At NN we are eager to take responsibility and drive this forward. Additionally, I want us to improve in a number of areas in the coming years. We strive to be a company with outstanding customer satisfaction, with high employee satisfaction and with an eye for society and climate. I think that will be my main focus for the coming years.’

As this company continues to transition, new acquisition targets are being discussed, and NN itself is also mentioned as one. Is this good news for you as a transition specialist?
(Laughs) ‘I cannot really comment on that, of course. Consolidation is an important trend in this sector, among intermediaries, insurers and the pension sector. We are still in the middle of this wave. An important part of the national consolidation may be behind us, although there may still be some steps that can be taken within our sector. The same goes for international consolidation. Where it will end? I have no idea. These are interesting times, especially for a transition specialist.’

Interview by Jan-Wouter Bloos, Partner at Deloitte. Published in Management Scope 05 2024.