© 2014 Finity Consulting Pty Limited

Why claims needs a

strategic focus Presented by Graeme Adams | 13 November 2014

Panel

Nick Careless − Frazer Walker, Graham Howard − Limebridge

Today’s presentation

1. Claims trends and strategic issues

2. Panel discussion

2

Trends impacting claims

3

MEGA TRENDS Operating models

Technology

Customer experience

People investment

INSURANCE CYCLE

Channel strategy Pricing strategy Claims strategy?

• Demographics

• Technology

• Social (Gen Y!)

• Economic shifts

• Regulation

• Premium increases

harder to achieve

• Desire for certain

results

• Focus on reducing

costs

Why be strategic?

Biggest cost to the business

Potential risk and reputation issues

Good execution = potential to rust on the customer

Good execution = competitive advantage

4

5

Trends and drivers of change

Trend Driver Big insurers

response

Niche insurers

response

Changes to operating

models

Reduce claims handling costs

Reduce claims costs

Use scale advantage Use niche

advantage

Increased technology

Reduce claims handling costs

Reduce claims costs

Richer customer experience

(online, SMS)

Use scale advantage Apply low cost

technologies

Investment in reporting

and analytics

Improve cost control Extend existing

capabilities

Develop new

capabilities

Integrated approach to

customer experience

Improve customer experience Reduce risk

exposure

Grow the top line

The place to start …manage what you

measure!

Gain deeper insights through

Existing, well understood data

sources and business intel

Easy but sophisticated reporting

eg: applying pricing and reinsurance data and

models to claims management

6

Claims management: balancing stakeholder

needs

7

Strategic

end state

Customer experience improvement

Insurer

Process improvement

Supplier

Optimal cost outcomes

Measure customer outcomes

Improve the customer experience

Drive process efficiency

Optimise technology

Engaged people

Improve and integrate

supply chain

Sustainable cost

improvement

• Know what to measure,

report, respond and refine

• Benchmark your business

Claims management : balancing stakeholder

needs

8

Claims strategy

Customer experience improvement

Process improvement

Operating model

improvement

Improve the customer experience

Measure customer outcomes

Drive process

efficiency

Optimise technology

Drive culture alignment

Manage risks

Manage your brand

Improve and integrate

supply chain

Sustainable cost

improvement

How do you turn claims

into a competitive

advantage?

Strategic end

state

Customer experience

improvement

Insurer

Process improvement

Supplier

Optimal cost

outcomes

Our panel experts

10

Graham Howard

Nick Careless

Graeme Adams

It is how well and how

quickly you execute that

will give you a competitive

advantage

Distribution & use

This presentation is being provided for the Finity Niche conference.

It is not intended, nor necessarily suitable, for any other purpose.

This presentation should only be relied on for the purpose for which

it is intended.

No other distribution of this presentation is permitted without our

prior written consent.

Third parties, whether authorised or not to receive this presentation,

should recognise that the furnishing of this presentation is not a

substitute for their own due diligence and should place no reliance

on this presentation or the data contained herein which would result

in the creation of any duty or liability by Finity to the third party.

Reliances & limitations

We have relied on the accuracy and completeness of all data and

other information (qualitative, quantitative, written and verbal)

provided to us for the purpose of this presentation. We have not

independently verified or audited the data but we have reviewed it

for general reasonableness and consistency. It should be noted that

if any data or other information is inaccurate or incomplete, we

should be advised so that our advice can be revised, if warranted.

It is not possible to put a value on outstanding claim and premium

liabilities with certainty. As well as difficulties caused by limitations

on the historical information, outcomes remain dependent on future

events, including legislative, social and economic forces. In our

judgement, we have employed techniques and assumptions that are

appropriate, and the conclusions presented herein are reasonable,

given the information currently available. However, it should be

recognised that future claim emergence will likely deviate, perhaps

materially, from our estimates.

Contact

Graeme Adams

Tel: +61 2 8252 3314

Mobile: +61 411 012 646

www.finity.com.au

Questions for the Panel

1 What should a CEO be concerned about in relation to the claims operation.

2 To what degree should insurers be concentrating their efforts on improving the process and culture, rather than

just the technology?

3 How is digital transforming claims?

4 What should a niche insurer be focussing on to improve the customer claims experience?

Is a better customer experience always more expensive to deliver?

What drives the most value – driving down the cost of claims, or driving up the customer experience, or brand

protection?