Corporate background
The roots of the Lähivakuutus and Tapiola companies go back to the 18th and 19th centuries. The history of Lähivakuutus starts from 1770, when king Adolf Frederick of Sweden enacted a law to found fire control groups in towns. The history of Tapiola starts from 1857 when the Paloapuyhtiö group was founded.[5] Of the direct predecessor companies of Tapiola, Pohja was founded in 1909 and Aura in 1917. After the 1933 law about mutual insurance companies several local Lähivakuutus companies were founded all over Finland.[5]
Tapiola and Lähivakuutus (1928-2012)
Tapiola was founded on the nameday of Tapio on 18 June 1982 when the Aura and Pohja companies were merged.[5] In 1983 Lähivakuutus was chosen as the common marketing name for the group of Lähivakuutus insurance companies, used both nationally and locally.[5]
In the 2000s Tapiola decided to expand its activity to financial services. The company first founded Tapiola Omaisuudenhoito Oy and Tapiola-rahastoyhtiö Oy, which later merged into Tapiola Varainhoito Oy. Tapiola Pankki Oy started operation in 2004.[5]
In 2011 the already existing plans for a fusion between Lähivakuutus and Tapiola were opened and the agreement of the fusion was signed on 23 December. In February 2012 Tapiola and Lähivakuutus announced their merger. The supervisory boards of the companies signed the foundation contract of LähiTapiola and the fusion was accepted by the corporate meetings in May 2012. In June 2012 the new marketing name was announced as LähiTapiola.[2]
LähiTapiola's early years (2013-2014)
The LähiTapiola group officially started operation in 2013.[2] The first CEO of LähiTapiola was Erkki Moisander.[6] The fusion was one of the largest and arguably one of the most difficult in the economic history of Finland, as the corporate cultures of the two companies were different. The Tapiola group was a centralised, professionally led company, where the CEO at the time Asmo Kalpala had a great deal of power. The corporate culture was described as polite and including academic discussion.
On the other hand, Lähivakuutus had distributed management, where the power lay in independent insurance companies in the Finnish regions, acting in an agile and professional manner. The company led by Moisander employed a direct way of speaking. Throughout the years, there had been multiple attempts to fuse the two companies and both of them had futilely tried to merge with Fennia. The companies feared the business would turn to be led by banks, as their competitor the OP Group provided bonuses to its bank clients, which could be used in insurance payments. The fusion brought a competitive advantage in the growing competition. The birth of LähiTapiola was the responsibility of Kalpala, Moisander and the chairman of the board of Lähivakuutus, Ralf Wikström. In the negotiations, Lähivakuutus had a good position, as it did not need the fusion as much as the Tapiola Bank which had lost part of its market share. Kalpala himself was motivated by a need to go through the fusion before retiring. The board of Lähivakuutus wanted to retain the independence of its regional communities in the fusion.
In practice the fusion was equal, but it was met with much resistance to change.
LähiTapiola (2015-)
In 2016 LähiTapiola was the second largest damage insurance company with a revenue of 1.1 billion euro, of which the life insurance company had a share of 422 million euro. The company had 1.6 million owner customers. The total sum of client funds controlled by LähiTapiola was 9.7 billion euro, and its associates included the S-Bank, Elo and Pihlajalinna. LähiTapiola employed about 3400 people.[13]
In January 2017 LähiTapiola announced it would renew its strategy by diminishing its role as an insurance company and making life support into its core function. Life support in this case means services for safety, finance and health, for example damage and life insurance, fund control and services related to health and wellbeing.[14] In June LähiTapiola and the healthcare company Mehiläinen announced they would start strategic cooperation.[15]
In May 2018 LähiTapiola raised its ownership share of Mehiläinen from 9% to 20%.[16] In October the company announced its first results from healthcare chains by the healthcare service provided by Mehiläinen. Use of remote doctors in healthcare chains of less than 500 euro provided a saving of 56 percent in costs.
