1 Copyright © 2007 Accenture All Rights Reserved. About CIS Co-op Insurance Services (CIS)—a subdivision of the Co-Op Group—provides a full range of life, investment and insurance products, including personal, life and non-life insurance, personal pensions, unit trusts, ISAs and pre-paid funeral plans. Business challenge In 2004, CIS executives were increasingly concerned about high business operating costs and the potential for losing ground to more efficient competitors. The average cost of handling a claim exceeded those of comparable insurers by about 20 percent. CIS' 2004 combined ratio—a key success measure for insurance companies worldwide—was 118 percent, versus a market average of 102 percent. CIS determined that supply chain shortcomings were a key contributor to its efficiency problems— particularly the company's "household supply chain." The analysis also revealed that the core supply chain problem was lack of central governance. Decisions regarding a total household supply chain spend of approximately £70 million (US$133 million) were being made independently by 18 regional offices. The primary results were too many inefficiencies and no opportunity to identify and make improvements across the supply chain. In November 2004, CIS launched the Claims Transformation Project (CTP), covering workforce transformation, IT enablement, office consolidation and supply chain management. Accenture was selected as the delivery partner for the CTP Program. A key part of this was to establish a number of quick wins in order to drive immediate How Accenture helped The Household Supply Chain Project was launched in February 2005, managed by a joint CIS and Accenture team that included specialists in insurance, supply chain, spend analysis, procurement and sourcing and supplier relationship management. In order to establish an accurate and up to date spend baseline a two week closed file review of approximately 4,000 household claim files was conducted. The detailed baseline report provided a breakdown of spend per commodity including volume and expenditure, peril and claims centre splits. Co-op Insurance Systems (CIS) Raises the Bar in Continuous Improvement

2 Copyright © 2007 Accenture All Rights Reserved. How Accenture Helped (cont.) This baseline report formed the foundations of the household supply chain strategy that was developed for CIS. In addition to implementing this long term vision for CIS' supply chain— which involved establishing a Supply Chain Collaboration with another insurer and setting up a new Central Sourcing team—a number of quick wins initiatives were identified to secure additional up front benefits. These quick wins initiatives were identified for the provision of general building repairs and loss adjusting services. In addition, an opportunity was identified for the renegotiation of an existing contract for the provision of subsidence services. Each initiative was conducted with a focus on achieving the right balance between cost reduction, improvement of customer service and impact on the claims process. For general building repairs, following an RFI process, a three month pilot with two suppliers was established, each taking responsibility for claims in a defined geographic area. The pilot allowed price and performance benchmarking to be carried out after which the preferred supplier was selected. For Loss Adjusting services, CIS and Accenture undertook a six month tender process using Accenture's proven seven step process. This resulted in rationalization of CIS' panel for the provision of loss adjusting services for domestic and commercial claims. The renegotiation of the subsidence contract was client led, but supported by Accenture—defined contracting and negotiating processes. High performance delivered Subsidence contract renegotiations resulted in: –An annual savings approximately £250k (US$475). –A move from a previously uncapped to a fixed liability for CIS for Event period claims. –Approximately 10 percent saving was achieved in 2005 from the general building solution. The loss adjusting solution provided: –Significant reduction of rates for Loss Adjusting services leading to a savings on fees of up to 10 percent over two years. –Implementation of performance-driven contractual relationships driving significant improvements in service cycle time and overall customer service. –Enhanced management of overall claims cost, versus a previous focus on rates.