Where Do We Want to Go?
In the summer of 2006, Mexico's largest national insurance company, Grupo Nacional Provincial (GNP), was facing challenges on many fronts. Founded in 1901, it had a proud heritage as the nation's first life insurance company. In 1969 it became a universal insurer, and in 1972 it was purchased by the family-owned Grupo Bal, one of the largest entrepreneurial conglomerates in the country. The company prospered for many years, enjoying a privileged position as the largest Mexican-owned insurer in a regulatory environment that favored domestic players.
But as the twenty-first century dawned, the industry began to experience a dramatic increase in competitive intensity. In the wake of sweeping government reforms, a host of new players piled into the market: multi-national insurers, mono-line attackers specializing in particular products, and global banks looking to extend their reach into insurance. With them came a push toward doing business through direct channels, along with a number of product offerings that were not natural strengths for GNP.
At this point, enter new CEO, Alejandro Baillères, the son of the chairman of Grupo Bal, Don Alberto Baillères. The company he was inheriting was not in the best of shape. Prior to his appointment, GNP had lost money for two years running. Its market share was eroding fast, its cost structure was high for the industry, and employee satisfaction was on a downward trajectory. It was Alejandro's responsibility ...