Georges de Macedo: Chief exec promotes five pillar plan to keep Covéa Insurance in the black

Georges de Macedo, chief executive at Covéa Insurance – the UK arm of Paris-headquartered Covéa Group – has declared the British insurer “open to business” as his three-year plan to improve profitability sees the firm begin to “turn the corner” financially and strategically.

It is undeniable that Covéa Insurance has maintained its distance from the trade press in recent years as tumbling financial figures, “weaknesses in [the] business” and challenging market conditions “hurt” the insurer.

Looking to rectify the situation, Covéa Group sent French father of two De Macedo – who was at the time working as a director within the wider business – across the Channel to reinvigorate its UK operation.

“I like challenge,” De Macedo tells Insurance Times. “The UK market is important for Covéa Group. The situation in the UK required some actions and it was, for me, a good challenge.”

De Macedo – who has an engineering background – assumed the helm of Covéa Insurance in June 2023, succeeding Adrian Furness, and immediately set about ringfencing the firm’s weaknesses that needed addressing.

This included the company’s “lack of clear strategy”. De Macedo continues: “[A] very clear strategy was missing. We had many distractions and then it’s very difficult to define priorities.”

One such “distraction” was attempting to get a handle on the structure of the business – De Macedo confirms that post-acquisition integrations “didn’t go too far”, meaning that the insurer had “inefficiencies” due to “different locations, different systems, different ways of working and not really [having] one single culture and one single entity”.

Covéa Insurance bought high net worth and property focused firm Sterling Insurance Group in February 2015, as an example past acquisition.

De Macedo further admits that investments around “partnerships and affinity business”, as well as previous commercial lines MGA agreements, were “proven to not be the right strategic decision”.

Previous capacity arrangements Covéa Insurance has undertaken, as an example, include its three-year backing of Kent-based MGA Gresham Underwriting for a retail shops and salons proposition. This was announced back in August 2020.

As well as these internal challenges, inflation headwinds were also buffeting Covéa’s UK business. The Office for National Statistics reported a 40-year record high inflation level of 11.1% in October 2022 – this impacted a myriad of UK businesses.

This amalgamation of factors meant that De Macedo was tasked with spearheading a tough financial turnaround – part of which saw him reduce Covéa Insurance’s headcount by around 26% in 2023.

Analysis of the insurer’s Solvency and Financial Condition Reports (SFCRs), conducted by Insurance DataLab exclusively for Insurance Times, further depict the extent of this expense challenge – this found that Covéa Insurance has reported a loss-making combined operating ratio (COR) since its 2018/19 result of 102.24%.

Although recording a slight improvement in 2021/22 of 100.37% after two years of worsening figures, Covéa Insurance’s COR for 2023/24 saw the UK insurer plunge further into unprofitability as it confirmed a 195.4% result.

Its 2023/24 SFCR additionally revealed that the insurer’s gross written premium (GWP) had declined 17% compared to 2022, with the company making an £87.3m loss after tax for 2023.

Within Insurance Times’ Top 50 Insurers 2024 report, published in October 2024, Insurance DataLab identified Covéa Insurance’s GWP as £711m for 2023/24 – this contributed to the insurer falling nine places in 2024’s final ranking to 38.

However, Insurance DataLab flagged that Covéa Insurance’s sky-high COR is in part due to a reinsurance deal Covéa confirmed last year with a number of different reinsurers, which was “made to protect the company against material deterioration in claims reserves for 2022 and prior years”, stated the SFCR.

Five pillars to profitability

So, how has De Macedo sought to bring Covéa Insurance back into the black?

In December 2023, the business’ board approved De Macedo’s three-year strategic plan, entitled ‘Doing what really matters’.

The strategy, which is centred around five key pillars, aims to home in on Covéa Insurance’s “core business” areas across personal and commercial lines. De Macedo describes these as motor, van, home and pet personal lines propositions, as well as SME and mid-market commercial lines products.

He believes this mix of personal and commercial policies, as well as the insurer’s focus on developing broker relationships, makes Covéa Insurance “quite unique”.

In terms of the five pillars that underpin Covéa Insurance’s planned transformation, the highest up the agenda for De Macedo is profitability.

“This [is] a very important target because profitability means that we are able to generate capital and support our investment and our growth. There is no point [having] growth if you don’t generate capital, so this is really important,” he explains.

In order “to secure the capital structure of the company” De Macedo has turned to parent company Covéa Group for additional support.

He says: “We are leveraging the group’s expertise in terms of underwriting expertise. We are also leveraging the capital position of the group, [which] is very strong. We benefit also from the rating of the group and can leverage the relationships that the group has with some [supplier] partners.”

As the one year milestone for De Macedo’s plan approaches this December, he confirms that Covéa Insurance is “on track” in terms of “financial indicators”.

The second strategic pillar is around “great relationships” with “brokers, customers, institutions, regulators – anybody around us because as an insurer, relationships [and] trust [are] very important”.

Part of forging these strong bonds with brokers, in particular, meant squashing rumours set in motion at the beginning of 2024 about the business being up for sale.

“We had a lot of noise recently regarding the sale of Covéa, which was clearly not part of my strategy. It was just impossible to come here, set a new strategy and to have a sale process ongoing. It’s just not possible. So, it was really important to share [the] message that we are here [for brokers],” he notes.

Defining priorities

The third pillar De Macedo is focused on is around working smarter and using technology to create internal efficiencies. One example here is around better leveraging data – a project he got off the ground in September 2024.

He explains: “We are making good progress and delivering significant improvements that allow us to better understand our business, be more efficient and make sure that our teams focus on more added value tasks than data crunching.”

Another key initiative has been Covéa Insurance’s move to insurer hosted pricing (IHP) in its personal lines business. This started in 2023 with motor products, while 2024 saw the project expand to include home insurance pricing.

IHP typically involves cloud-based software that allows insurers to control their own pricing and product distribution.

De Macedo hopes that this work will be “delivered shortly”.

He says: “Going forward, Covéa will be really leveraging IHP with new pricing capabilities and this [will] open other opportunities in terms of pricing models, machine learning, leveraging on data.”

De Macedo’s fourth pillar has the slogan “protect our future”.

This encompasses the “really critical” environmental, social and governance (ESG) agenda, both in terms of reducing Covéa Insurance’s own carbon footprint – through reviewing its investment portfolio, for example, or using supply chain partners that are also ESG conscious – as well as using working groups to evaluate where product sets or propositions need to be updated.

De Macedo says: “Businesses that [do not] consider climate change in [their] strategy will fail.

“If you take ESG as a constraint, you miss the point. The value is when you really embed this in your thinking and in your strategy.

“We have defined priorities and we set up internal working groups to work on those priorities in order to identify clearer actions in terms of how we should reshape our products [and] the additional services we can provide.

“[Depending on how the global market changes, there will be] new opportunities where Covéa should start to offer services to support [this] change [in] global economy.

“The ESG agenda is not just for Covéa – it’s for the entire economy. And as an insurer, we have to support the economy and the evolution of the economy.”

The final pillar of De Macedo’s five-point plan is people – he says Covéa Insurance’s staff form “the centre of our strategy”.

This includes new joiners to the c-suite, for example, such as Emeric de Souance, who became chief risk and compliance officer in November 2023, shortly after De Macedo took up post. Claire Ferrari, chief financial officer, is another new addition – she started in January 2024.

“This makes a lot of difference because it brings a different perspective,” De Macedo adds.

Rather than revealing GWP growth metrics or numerical goals linked to the three-year strategy and individual pillar performance, De Macedo tells Insurance Times that the insurer has instead agreed “peer targets” with its board. These are currently being updated for 2025.

De Macedo continues: “We’ll raise the bar for 2025. The top priority was profitability and I can say that we have turned the corner and we are ahead of our plan in terms of profitability.”

Trust is the ‘centre of everything’

As 2024 is on the brink of turning into 2025, De Macedo and his team are preparing for the second year of ‘Doing what really matters’ – for him, this mainly involves continuing “in the same direction” and delivering the insurer’s transformation ambitions.

However, De Macedo is keen to emphasise that transformation is not a ‘one and done’ initiative at Covéa Insurance, so the work is never really completely finished.

Instead, he promotes a “continuous improvement culture”, which he believes “will protect the company for the future, make sure that we continue to improve and continue to be good in terms of delivery”.

He concludes: “Our ambition is to be the preferred, trusted insurer for our brokers, for our customers and for our people because trust is a very important value for me.

“If you want to [work in] insurance, trust is in the centre of everything. To achieve this, we need to continue to be very disciplined in terms of underwriting, be very clear on the risks that we are taking and provide the right price for the risk that we underwrite.

“[We] also [need] to continue to provide high quality service to our customers and [maintain] strong support from our brokers.

“It’s very important for our strategy to have this trusted and win-win relationship with our brokers.”