Interview with Huub Arendse, CFO Achmea

Could you tell us something about yourself, your education, and your career?
In 1982, I started my career at one of the predecessors of KPMG, where I started in the accounting practice. With this company, I worked for a few years in America. After my return to the Netherlands, I did a lot of work at the department transaction services and eventually I made the transfer to the advisory practice. In 2006, Achmea went out for tender regarding the accounting practice and this was partly the reason that I returned to the audit practice. KPMG won the tender and from that moment on I signed the audit opinion of KPMG regarding the reviewed financial statements until 2010. In 2010, I returned to the advisory practice, where I worked until April 2013 when I became Chief Financial Officer at Achmea. Currently, I work almost four years at Achmea and I still enjoy it!  It is very special to be at the other side of the table. Right now, I can implement things that I advised my customers before. This is quite a difference, but it is a very interesting switch. This is something that I always wanted and I got this opportunity at Achmea.

What does a normal work week look like for you?
My agenda is quite filled with diverse appointments. Appointment items that are on the agenda are well-prepared the day before the meeting. On Mondays, the weekly meeting of the executive board of Achmea is taking place and I regularly prepare myself for that meeting on the Sunday. I always try to really take a day off on the Saturday. The time spent is in the end quite intensive. Luckily, I obtain a lot of satisfaction and joy from my job.

Everyone knows the term Chief Financial Officer and most people know what it stands for, but what are the specific tasks that are related to the term CFO?
As the CFO of Achmea, I am responsible for a broad spectrum of activities. Almost every insurance company has its own dynamics. Achmea has a balance sheet total of approximately 100 billion euros and written premiums total around 20 billion euros per year. Everything that has to do with solvency, but also profitability and liquidity, asks for the right amount of attention. Costs, rate of return, asset management and investment performance, and the accounting effects that could have an influence on it…

For me, this makes the job interesting and diverse. As a CFO, it is important to really understand the business you’re in. You want to make decisions that are based on the right grounds. Different from the advisory practice as an accountant, as I am myself in charge now. Therefore, it is crucial that all components of the business activities are well thought through. In the beginning, it takes a lot of energy; however, eventually it will pay off with a lot of energy.

“The core is that you need to anticipate.”

Luckily, there are a lot of valuable people within Achmea, who perfectly know their field of expertise. Without good preparation and for instance reliable reports, it is very hard to make good rational decisions at the top of the organization.

To what extent are you currently involved in the accounting practice?
I am up to speed with the latest developments and standards in the accountancy practice. Any changes there are of course also important for my current responsibilities. The core is that you need to anticipate. Within the Dutch Association of Insurers, the committee Financial and Economic Matters (FEZ) handles with economic and financial cases. The six largest Dutch insurance companies and some medium-sized companies are represented and currently, I perform as chairman. Subjects that are relevant for all insurers, are addressed yearly by me as chairman with the sector Insurance and Pensions of the Dutch Professional Organization of Accountants (NBA). Of course, I also have frequent discussions with the external accountant of Achmea. Last but not least, I always faithfully obtain my PE-points (Dutch equivalent of CPE) to preserve my RA-title (Dutch equivalent of CPA). I would like to keep this title, because I studied for it for years and it is a wonderful title to have!

What do you think about the education of the current RA students?
The post master Accountancy is an outstanding study. An economical education program with an accountancy study afterwards is an incredibly good way of learning. I got to know a lot of companies from the inside; from entertainment to production, from trade to insurance and banks. Someone with such an education thinks quickly in terms of wealth-creation versus risks. That is a very valuable approach. What are the most important value drivers of this company and where are the most important risks? It is then really in your genes to think in that way and that is of course also really valuable in a CFO position. I did not want to miss it. The structure of starting with accountancy and to start your educational program is simply very good. I can recommend it to everybody!

For the study area, it is good to pay close attention to the discussion between rule and principle-based. The trend is moving towards rule based. Initially, a reference is made to the rules, when a problem is occurring. That is understandable because people want as much assurance as possible. Principle-based can be complex, but it is important to keep thinking about ‘the conceptual basis of the regulation’ and not only to act by the letter… It would be a shame if an accountant would only be seen as an ‘IFRS-police’.

What is the most important thing you have learned in the different functions you had in your career?
With KPMG as well as with Achmea, I have learned that working in a team almost always leads to better results. Every team has its’ own dynamics, but the outcome of cooperation is almost always the best. That is also how we work in the Executive Board at Achmea. Jointly and collegial, and of course everyone has its own responsibilities and areas of focus.

As a cooperative organization, I see this kind of teamwork in all the layers of our group. Achmea has a central role in society and plays, with numerous insurance propositions, an important role in the lifes of millions of Dutch people. We often make long-term agreements with our customers and of course we want to meet these arrangements. The awareness that the long-term continuity is more important than the short term, is strongly developed at Achmea. It is reflected in almost all the products and processes in our company.

“My advice is to work abroad for a while!”

The quickly changing customer demands is a second point. At Achmea, we started a large change program, a few years ago, where innovation of our services has a central role. Innovation at a high pace and more customer orientation are two major pillars of this program. The role of insurance companies is changing. More often, were are advising and helping clients with prevention. With our knowledge, we help our customers. We are actively involved with cases around healthcare, mobility, living and financial security. Insurance solutions facilitate the economy. Together we share the risks one cannot bare as an individual. By covering risks, you make yourself – as an individual or as a company – future proof. Innovation will always have a central role in our strategy and operations.

This means there needs to be room for new ideas from for instance new colleagues. It is important that there is enough space for someone who is a bit lower in the formal hierarchy. He or she has to be able to contribute in his or her own way.  As CFO I try to actively convey this message. You need a lot of different people with a widespread range of perspectives to come up with a good product. In the end, it does not really matter, whether you’re  working on advice or the implementation of an investment plan.

A trend that has been visible in recent years at accounting firms is the growth of the consultancy-branch. How did you experience this during your time at KPMG and do you think that this will increase in the future or do you think it has reached the highest level?
For an accountancy firm it is chiefly important to have a well-balanced portfolio of customers. When you have 80 percent audit customers and only 20 percent advisory customers, you know that after ten years you will have lost eighty percent of your customers, because of the mandatory audit rotation. This is not good for the long-term continuity of a firm. Therefore, it is important to think about a good balance between both activities. An accounting firm cannot function without the advisory practice. There are a lot of complex cases related to audit, where you need specialists, that you cannot entirely do as a generalist. You need to have an office that combines both qualities.

What advice would you give to accountancy students?
The world is getting more and more international. Foreign experience is very valuable. It starts with speaking multiple languages. Next to that, it is good to really understand different cultures. Germans deviate on some parts from Dutch people as much as Japanese people do. At first sight, American people look very open and call for example everybody by their first name. However, society-wise they could be quite hierarchical. Especially, in the American culture it is vital to really read between the lines to understand what is really meant.  Eventually, you learn to appreciate a different culture if you work in a foreign country for a while. The different culture is not good or bad, but it is different. When you have reached that point, your foreign-experience has really paid off. In conclusion, my advice is to work abroad for a while!

Achmea is the largest Dutch insurance company in terms written premium nationally.
The company is the parent company of insurers, like Centraal Beheer, Zilveren Kruis, Interpolis, FBTO, Avéro and Inshared, and has approximately 10 million customers in the Netherlands. Internationally, Achmea is active in five countries, namely Greece, Turkey, Slovakia, Ireland, and Australia. The company has a cooperative identity and has bonds for about 10 billion euros in several international stock exchanges.

In the Netherlands, Achmea is the market leader in non-life insurances, like car- and household insurances, and health care insurance. Achmea also provides income insurances and with Centraal Beheer APF an overall pension proposition. The asset manager Achmea Investment Management has 100 billion in assets under management. Through among others “Centraal Beheer” and “Woonfonds” Achmea provides mortgages, with a portfolio totaling about 12 billion euros.

The shares of Achmea are for approximately two-thirds owned by the Achmea Association, the association related to the customers of Achmea. The goal of the Achmea Association is to ensure the continuity of Achmea and to guarantee the collective interest of its customers.