Payments Automation at Gjensidige

by Jørn Einard Skjærlund, Head of Accounts Receivable, Gjensidige

The cash management organisation at Gjensidige is responsible for banking communications, payments, collections and daily cash management, with investments handled separately. We work with SEB and DNB; currently SEB is a primary banking partner in Norway but we may extend this relationship in the future to other countries in which we have subsidiaries. Cash centralisation is more difficult for an insurance company than for other types of company as special rules apply to the industry, but we are aiming to adopt a single banking relationship to achieve better terms and visibility over our cash. In Sweden, we are restructuring the organisation in October 2009 which will allow us to centralise cash more easily.

Relationship with SEB

We have worked with SEB for three years, and recently renewed our agreement for a further three years, which can be extended for a further two years before the next renewal. There were a variety of reasons why we chose SEB as our partner bank. Firstly, pricing was competitive, which was an important consideration for a company with 4.7 million incoming payments each year; secondly, the SEB team provided highly personalised solutions and services. We do not manage any debt, so cash management is our primary focus, with an emphasis on cost-effective, efficient payments and collections, and visibility and control over cash flow.

Consequently, optimising systems and processes is very important to Gjensidige. We have a strong culture of identifying and resolving process inefficiencies in the company, but in addition, we worked through a detailed process evaluation with SEB, known as the SEB Corporate Value Chain™. Based on the outcome of this, together with our internal process analysis, we identified a variety of efficiency improvements and we have worked closely with SEB to implement them.

Enhancing payments efficiencies

One example was that until recently, we managed various payment types in Norway, both electronic and paper-based instruments, such as mail giros, which were more expensive and difficult to reconcile. With SEB’s help, we abolished giro payments, in order to fully automate our payments process. We made the necessary changes to our internal systems and requested payment instructions from customers, which was a substantial task for a company with over a million customers, as we did not have a complete set of account details per customer, and those that we had were not necessarily up to date. This will be difficult to maintain, and we are working with SEB to find a pragmatic solution.

In addition to rationalising our payment types, we wanted payment information to be passed to SEB through a central system and in a single format, for which we use EDIFACT. We now send a single file directly to SEB with all our Norwegian payments, which originate from a central insurance system in Norway. We intend to roll the system out to other countries in the future so that we have one communication channel to SEB, who will then convert information into the relevant formats for each country.

Looking to the future, we are working with SEB to suggest enhancements to the user interface for their C&I Online system, to cater specifically for the needs of local markets, a process to which SEB has been very receptive. We are constantly aiming to reduce the costs and enhance the richness of payments data in order to provide a better service to customers. We will continue to maintain a close relationship with SEB and we have a variety of different touchpoints in our business, ensuring a depth of understanding of our business and our current and future needs.