Johan de Wittlaan 3
2517 JR The Hague
(70) 358 15 81
Fax: (70) 358 12 80
Assets: DfI 92.89 billion (US$48.68 billion)
Stock Exchanges: Amsterdam Paris Geneva
In 1963, The Netherlands Insurance Company, the largest insurance company in the country, merged with its archrival, the second-largest insurance company in the country, the Nationale Life Insurance Bank. The merger made the company more competitive in the increasingly international market and spread out the necessary costs of computerizing operations.
Since the merger, Nationale-Nederlanden has agressively pursued acquisitions throughout the world and started up new operations in Asia, Spain, and Greece. The company offers life and non-life insurance, reinsurance, investments, and related financial services in 21 countries. It remains the largest insurance group in the Netherlands despite similar mergers among its competitors, and is the third-largest enterprise in the country in terms of market capitalization. Nationale-Nederlanden emphasizes growth through further international expansion and optimization of its existing operations in the mature home market.
The Netherlands Insurance Company was the first of the partners to be established. In the early years of the 19th century, the Dutch insurance market was served primarily by small regional companies. One exception was the Netherlands Fire Insurance Company of Tiel, which established agencies throughout the country. The company’s agent in Zutphen was Gerrit Jan Dercksen, who was assisted by his cousin, Christiaan Marianus Henny. The two men appointed subagents in the Zutphen area to expand their business.
In 1844, however, the Tiel company changed the rules under which its agents operated: subagents became full agents themselves. This move limited Dercksen and Henny to Zutphen, while their former subagents gained the territory outside the city. The two men lost a substantial portion of their income because of the change.
Within the year, Dercksen and Henny had established their own company, Insurance Company against Fire Damage, soon renamed The Netherlands Insurance Company in 1845. The new company did not only operate in the Zutphen area; the partners appointed underwriting agents in Amsterdam and Rotterdam almost immediately.
Dercksen and Henny failed to see a profit for a number of years. The two were inexperienced in assigning premiums for different risks and their mistakes hurt the new company. A fire in a sugar refinery in 1849, for example, cost them Dfl 12,000, one-quarter of the shareholders’ paid-up capital. The company was also forced frequently to pay claims for arson, and it did not initially have much success in taking these cases to court.
Dercksen and Henny aggressively tried to decrease their risk. They imported special fire engines from England for the Zutphen district volunteer fire brigade. They gave farmers a discount for planting Lombardy poplars, which are natural lightning conductors, to protect their property. They hired inspectors to visit insured properties regularly, and they took out reinsurance policies. It was said that Dercksen and Henny even went up to their office’s attic during thunderstorms to watch the farms they insured through a telescope; if lightning struck one of those properties, they could call the fire brigade immediately and limit their losses.
Soon after it was founded, The Netherlands Insurance Company began to expand abroad. In 1856 the partners appointed an agent in Batavia, the capital of the Dutch East Indies. The Dutch merchants they served there paid high premiums and the claims burden was low. The company was able to use its base in the Dutch East Indies to expand into other Asian ports, including Singapore, Hong Kong, the Philippines, Japan, and China. At the same time, The Netherlands Insurance Company followed Dutch merchants to other areas, including South Africa and the Caribbean. Before 1900, The Netherlands Insurance Company had 139 foreign agents.
By the time The Netherlands Insurance Company became a profitable international concern, the original partners were gone. Henny, the sole manager after Dercksen’s death, retired in 1894. He was succeeded by his son, Carel Henny, who had worked for insurance companies in Denmark and England, as well as for his father’s firm, to prepare to take over the company.
The young Henny moved the firm’s headquarters from the provincial Zutphen to the country’s administrative capital, The Hague, in 1896. In 1903 he made another move, adding a life insurance department to The Nether lands’s traditional sphere of fire insurance. Within a short time, he added the accident-insurance company Fatum and the industrial life insurance company Victoria to become an all-lines insurance company.
Carel Henny’s impact on the company was felt in other areas as well. He was among the first to improve the working conditions of employees. He introduced a pension plan, limited working hours, and granted holiday leave. Lower-paid employees could spend their free time at company holiday homes.
World War I limited The Netherlands’s operation in some of its European agencies, especially those in Belgium and France, but the economic crisis that followed the war had a greater impact. The worldwide Depression stopped the company’s growth and destroyed its profitability for the first time since C. M. Henny’s death.
In the middle of the economic crisis The Netherlands Insurance Company joined the Nationale for the first time in a joint venture, insuring employee pension plans. These contracts were guaranteed by the new Bureau for Group Insurance.
The economic collapse, however, was followed by the devastation of World War II. The German army occupied the Netherlands on May 10, 1940. The Netherlands Insurance Company’s head office in The Hague was in the path of the German army’s Atlantic Wall, its defense against an Allied invasion, and in 1943 part of the office within the artillery range of one of the German bunkers had to be destroyed.
Since communication abroad was cut off by the German invasion, the government transferred the seat of the company to the Netherlands East Indies. The company’s headquarters had to be moved once again when the East Indies were occupied by Japan in 1942, this time to the Netherlands Antilles. Overnight, J. van der Velden, head of the Curasao branch office, became head of The Netherlands Insurance Company in the free world.
Eventually the war made it almost impossible for The Netherlands to operate domestically. The German occupying force insisted that Dutch companies dismiss all Jewish employees. Jewish possessions, including insurance policies and securities, were confiscated. The Netherlands Insurance Company lost almost all of its men employees, who were sent to work in Germany or went underground to avoid being transported there. Severe food shortages meant that people in the western part of the country were concerned solely with food procurement. In the last year of the war, communication with the rest of the country was cut off.
After the war, The Netherlands and other insurance companies played a large role in reconstruction by financing home building and the rebuilding of industry. When foreign communications were reestablished after the war, The Netherlands Insurance Company management found that non-Dutch operations had been continued and even expanded during the war years. Expansion continued during the postwar years as the company began acquiring local firms that had established reputations, instead of setting up its own branches. The company had acquired its first foreign subsidiary, the Belgian De Vaderlandsche, in 1939. After the war, Dutch emigrants in Canada and Australia offered a new opportunity. In 1954 The Netherlands set up Associated National Insurance of Australia; in 1956 it bought Canada’s oldest insurance company, The Halifax, and in 1959 Commercial Life Assurance Company of Canada was acquired.
In the 1950s, more than a century of operations in the East Indies came to an end after the Dutch colony there became independent as the republic of Indonesia. President Sukarno nationalized all Dutch companies. It was not until 1972 that Nationale-Nederlanden re-established itself in that country.
Postwar government-sponsored social security programs initially seemed like another kind of threat to the company. Insurance companies were able to promote the idea that social security was simply a base of financial security that had to be built upon through supplementary private insurance. By promoting the idea of security, the Netherlands Insurance Company shared in the prosperity of the 1950s.
The Nationale Life Insurance Bank also prospered during the postwar years. The Nationale Life Insurance Bank was founded in 1863 by Rotterdam lawyer William Siewertsz van Reesema and insurance agent Simon van der Heldt. The two men felt that they could profitably challenge the numerous burial societies for the premiums of middle-class working men. They offered low premiums for life insurance coverage averaging about Dfl 300. That sum could provide a funeral for a man and a small sum for his family. Soon van der Heldt and van Reesema also offered old-age insurance and “trousseau insurances,” which provided money for young people setting out on their own.
The Nationale found itself turning a profit sooner than The Netherlands Insurance Company had, but it also faced some problems. Strict government supervision of the life insurance industry, including a requirement that Dutch companies use outdated mortality tables, meant that foreign insurance companies could charge lower premiums. Epidemics that hit less-affluent members of Dutch society, among which the Nationale found most of its clientele, also hurt the company: a cholera epidemic in 1868 and a smallpox epidemic in 1872 led to a larger-than-expected number of claims.
Around the turn of the century, the Nationale made some efforts to set up offices in Denmark and Belgium, but it was not long before the board of directors decided that the risks involved in expanding outside the country were too great and ended those experiments. The board decided that it was more important to increase public trust within the country. In 1886, the company introduced the Nationale Maid of Holland on its promotional material. The maid continued to advertise the Nationale, representing respectability and reliability, until 1970. In addition to the new advertising symbol, the Nationale provided an extended account of its operations in its annual report to increase public confidence.
In 1880 government control of life insurance companies ended. While the Nationale no longer had to contend with obsolete mortality tables, the company was concerned that the public would lose faith in an unregulated industry. Managing director J. W. Niemeijer advocated legislation to provide reasonable government control. It was not until 1922—a year after the bankruptcy of the largest Dutch life insurance company, the General Company for Life Insurance and Superannuation—that legislation was actually enacted. Niemeijer chaired the committee that wrote legislation establishing the Insurance Control Board to supervise the industry.
Like The Netherlands Insurance Company, the Nationale felt the effects of depression and war. The Nationale’s head office on the banks of the Maas River in Rotterdam was involved in World War II from the time that German troops crossed the Dutch border. German airborne troops took over the building for its strategic location opposite the two most important bridges over the Maas. The head office building sustained severe damage due to the fighting, and Rotterdam itself was damaged heavily during a German bombing raid on May 14, 1940, which destroyed the city center and killed 2,000 residents.
The Nationale was also instrumental in postwar reconstruction and shared in postwar prosperity. In 1956 the company expanded its non-life portfolio when it acquired the Tiel Utrecht Fire Insurance Company, a group of nine non-life insurance companies. The Netherlands Fire Insurance Company of Tiel, whose agency policies had led to the formation of The Netherlands Insurance Company more than 100 years previously, was one of this group of companies. The acquisition made the Nationale, long the largest life insurer in the country, the second-largest non-life insurer as well. The Nationale had become The Netherlands Insurance Company’s biggest competitor.
The 1960s brought new challenges to the prosperous competitors. One by-product of the war was the move toward European cooperation, which peaked when the European Economic Community was established in 1957. A country’s membership in the new organization meant that the nation’s larger companies had a better chance of remaining competitive in the European market.
Another trend developing as the 1950s turned into the 1960s was increasing automation. Particularly in the insurance industry, computers could keep records and do basic calculations more efficiently than could clerks, but the cost of computerizing a large company was a deterrent.
These trends led to consolidation among insurance concerns, especially in the United States, Great Britain, and Canada. In April 1963, just months after the Nationale celebrated its 100th anniversary, the Nationale and The Netherlands Insurance Company merged, in an effort to remain competitive under changing circumstances.
The two companies had some experiences working together through the Bureau for Group Life and Pensions, established in 1932. They approached integration slowly. Their first joint project was to establish a new administration center for processing information. Both companies used punch cards to keep track of data, but the amount of information was growing so quickly that punch cards were no longer sufficient. In 1966 the new administration center was completed and new computers were delivered to process much of the administrative workload. The cost of automation was considerably lower than it would have been if the two firms had approached it separately.
Following the merger international expansion was vigorously promoted through the international division. The British company Orion became the first foreign acquisition of Nationale-Nederlanden in 1963, followed by the Agder Assuranceselskab in Norway in 1964 and the Life Association of Scotland in 1968.
Nationale-Nederlanden continues its foreign acquisition policy because it is the most promising growth field, given the small, mature domestic market. In 1979 the company took a major plunge into the U.S. insurance market when it acquired Life Insurance of Georgia after a lengthy struggle. The new company has been the basis for additional U.S. acquisitions. Nationale-Nederlanden also continued to grow in Canada, where it acquired Calgary’s Western Union Insurance Company in 1987. Two years later a general management office for North America was set up in Washington, D.C., to coordinate activities in that part of the world.
At the same time, Nationale-Nederlanden moved into Australia, where it acquired Mercantile Mutual in 1981, indicating the company’s intention to focus more attention on the Pacific. Nationale-Nederlanden became the first European insurer to establish operations in Japan in 1985, reinstating ties The Netherlands Insurance Company had had until World War II. It moved into Taiwan in 1988 when its affiliate, the Life Insurance Company of Georgia, was granted one of two licenses given to U.S. insurance firms each year. The following year Life Insurance Company of Georgia was granted a license to operate in South Korea.
Nationale-Nederlanden also expanded within Europe. The company established operations in Greece and Spain in the 1980s to take advantage of these countries’ growing economies. At home the company began to offer new kinds of health insurance to meet the increased need for private health care created by a downsizing of the Dutch National Health Service, and increasing affluence.
In 1983 Nationale-Nederlanden consolidated its premier position in the Dutch insurance industry—despite the merger of the second- and third-largest firms, Ennia and AGO— when it took over Amfas, the number-four company. Amfas was in serious financial trouble at the time because of problems in its marine-insurance division and poor performance in its real estate division. Nationale-Nederlanden also added a credit company and a mortgage bank to its domestic operations to strengthen its presence in the country’s financial-services sector.
Despite the difficulty in meshing acquired companies into operations and sluggish earnings growth among acquisitions, Jaap van Rijn, who became chairman of Nationale-Nederlanden in January 1989, says the company remains on the lookout for other appropriate acquistions. He explained that the company will continue to emphasize local autonomy and open communication in managing its international network.
Van Rijn also said Nationale-Nederlanden will need to continue to develop innovative products and use technology more efficiently to keep growing in the saturated insurance market. Like his long-ago predecessor, Carel Henny, Van Rijn said the company must continue its commitment to employee benefits and community improvement.
Nationale-Nederlanden Life Insurance Company N.V.; Nationale-Nederlanden General Insurance Company N.V.; RVS Life Insurance N.V.; RVS General Insurance N.V.; Tiel Utrecht Insurances; N.V. Life Insurance Company Victoria-Vesta; N.V. General Insurance Company Victoria-Vesta; RVS Insurances N.V. (Belgium); De Vader-landsche N.V. (Belgium); Victoria-Vesta N.V. (Belgium); Hibernian Life Association Limited (Ireland, 50%); The Life Association of Scotland Limited; The Orion Insurance Company PLC (U.K.); The London & Overseas Insurance Company PLC (U.K.); Proodos General Insurances S.A. (Greece); Le Groupe Commerce Compagnie d’Assurances (Canada); La Compagnie d’Assurances Belair (Canada); The Halifax Insurance Company (Canada); Western Union Insurance Company (Canada); NN Financial (Canada); Midwestern United Life Insurance Company (U.S.A.); Security Life of Denver Insurance Company (U.S.A.); Wisconsin National Life Insurance Company (U.S.A.); Life Insurance Company of Georgia (U.S.A.); Southland Life Insurance Company (U.S.A.); Associated Doctors Health & Life Insurance Company (U.S.A.); Peerless Insurance Company (U.S.A.); The Netherlands Insurance Company (U.S.A.); Excelsior Insurance Company (U.S.A.); Indiana Insurance Companies (U.S.A.); First of Georgia Insurance Company (U.S.A.); FATUM General Insurance N.V. (Surinam); P.T. Maskapai Asuransi Nasuha (Indonesia, 49%); The Netherlands Insurance (Malaysia) Sdn. Bhd. (49%); Mercantile Mutual Insurance (Australia) Limited; Mercantile Mutual Life Insurance Company Limited (Australia); Mercantile Mutual Casualty Insurance Limited (Australia); Nationale-Nederlanden Reinsurance Company N.V.; Netherlands Reinsurance Group N.V. (51%); ‘Transatlántica’ Reinsurance Company N.V.; B.V. Finance Company ‘VOLA’; Westland/Utrecht Mortgage Bank N.V.; Georgia US Data Services, Inc. (U.S.A.); The Investment Centre, Inc. (U.S.A.); Blue Cross Medical Consultancy (Singapore) Pte. Ltd.; Mercantile Mutual Finance Corporation Limited (Australia); Mercantile Mutual Funds Management Limited (Australia); Mercantile Mutual Investment Mangement Limited (Australia); Alcredima (Belgium); Fiducre (Belgium); LAS Investment Assurance (U.K.): LAS Pensions Management (U.K.).
Dankers, Joost, and Jaap Verheul, Secure in a Changing World: Nationale-Nederlanden 1963-1988, Maarssenbroek, the Netherlands, Nationale-Nederlanden N.V, 1988; “Nationale-Nederlanden,” The Hague, Nationale-Nederlanden N.V., 1989.
—Ginger G. Rodriguez