1. The Future of Outsourcing THIRD PARTY OUTSOURCING THE OPPORTUNITY MIKE BENTON MANAGING DIRECTOR

2. The Future of Outsourcing A definition: “Long-term contracting of selected business processes to an outside provider to help achieve increased shareholder value”

3. The Future of Outsourcing What can be Outsourced: Policy administration –new business –existing business Underwriting Claims Finance / Returns / Valuation All of these functions

4. The Future of Outsourcing Why Outsource? Increasing business loads Reduced budgets Less underwriting availability Increased pressure for service

5. The Future of Outsourcing Why Outsource? In-house underwriting is expensive Pressure to reduce costs Guaranteed resources for peaks and troughs Recruitment and training

6. The Future of Outsourcing In-house Solutions Overtime Increase cost – short term need Recruiting Long lead time Pressure on accommodation

7. The Future of Outsourcing Reasons for selecting an outsourcer: Fit for purpose (now and future) Competence and track record Cultural ‘fit’ HR policy Service levels Financial (cost, impact, VAT)

8. The Future of Outsourcing BUT ……………………... It has to be a strategic decision with a long term commitment

9. The Future of Outsourcing AND …………………….. Both parties must enjoy a financial benefit with a relationship trending towards partnership

10. The Future of Outsourcing Management Involvement: Continual Contractual (negotiation and subsequent) Attitude and Approach In the detail Impact on own company Understand Regulatory implications

11. The Future of Outsourcing Regulatory Involvement: The Industry has a poor track record with managing regulatory risk We are heading for “risk-based” supervision Outsourcing = Risk

12. The Future of Outsourcing Regulatory Involvement: Regulatory obligations cannot be outsourced Outsourcers must employ Approved Persons Involve the Regulator Adequate risk management controls must be demonstrated

13. The Future of Outsourcing Impact on underwriting & claims Increasingly likely to include outsourcing of –medical evidence collection –technical assessment Outsourcing of whole of risk management cycle likely by some companies

14. The Future of Outsourcing Drivers of underwriting and claims outsourcing Market centralisation Automation –on critical mass of underwriting teams –impact on development of underwriters Specialisation/technical excellence

15. The Future of Outsourcing Drivers of underwriting and claims outsourcing Reinsurers –changes in service proposition –provision of outsourcing services –reinsurance structures

16. The Future of Outsourcing Practicalities of outsourcing Philosophy –familiarity Cost control Quality Control Errors –who picks up the tab –liability cover for non-risk carriers……..

17. The Future of Outsourcing Impact on outsourcing opportunities Greater opportunities Acceleration of time to market place for new products –acquisition of systems or skill sets –white labelling –outsourcing of back office New and existing players

18. The Future of Outsourcing Outsourcing Underwriting Quality Advantage Cost Service

19. The Future of Outsourcing Advantages of Outsourcing Pay as you use Switch on – switch off Flexibility of staffing No additional management needs No space issues

20. The Future of Outsourcing Some benefits of outsourcing: Better management information Easier to manage Could become a ‘virtual’ business Increase product range

21. The Future of Outsourcing The Future: Outsourcing will grow further Its scope will widen Technological advances make it easier

22. The Future of Outsourcing INFORMATION TECHNOLOGY What is Available today?

23. The Future of Outsourcing INFORMATION TECHNOLOGY Semi-Intelligent Underwriting/Admin Systems On Line Medical Tracking Systems Real Time Underwriting Links(DELIUS) Information Exchange (XML) Legacy Information Exchange(EDI)

24. The Future of Outsourcing INFORMATION TECHNOLOGY ISSUES with CURRENT SYSTEMS Not intelligent enough Expensive Not integrated to other systems

25. The Future of Outsourcing INFORMATION TECHNOLOGY How can Outsourcing & IT help with these Issues

26. The Future of Outsourcing INFORMATION TECHNOLOGY Outsourcer’s can develop acceptable systems which allow cost effective outsourcing

27. The Future of Outsourcing INFORMATION TECHNOLOGY FUTURE DEVELOPMENTS Intelligent Underwriting Fully Integrated Completely Flexible

28. The Future of Outsourcing INFORMATION TECHNOLOGY ADVANTAGES Cost Effective Underwriting End to End Immediate Rapid speed of Issue Lower NPW rate

29. The Future of Outsourcing SMART DELIUS MEDITRAK HTML Remote U/W XML Info Exchange U/W THE UNDERWRITING SOLUTION Information Exchange THE UNDERWRITING SOLUTION Information Exchange

30. The Future of Outsourcing Application Smart System MEDITRAK DELIUS UNDERWRITING Process Plan UNDERWRITING Process Plan

31. The Future of Outsourcing Application Smart System MEDITRAK DELIUS Broker Online application – sent electronically Insurance Office Application – electronic or imaged – sent electronically UNDERWRITING Process Plan UNDERWRITING Process Plan

32. The Future of Outsourcing MEDITRAK DELIUS Broker Online application – sent electronically Insurance Office Application – electronic or imaged – sent electronically Application Smart System UNDERWRITING Process Plan UNDERWRITING Process Plan

33. The Future of Outsourcing Application Smart System MEDITRAK DELIUS Office A Underwriting Philosophy Office B Underwriting Philosophy Office C Underwriting Philosophy Office D Underwriting Philosophy UNDERWRITING Process Plan UNDERWRITING Process Plan

34. The Future of Outsourcing Application MEDITRAK DELIUS Smart System Broker Decision sent electronically Insurance Office Decision sent electronically Where decision can be made by Smart System UNDERWRITING Process Plan UNDERWRITING Process Plan

35. The Future of Outsourcing Application MEDITRAK DELIUS Smart System DELIUS Where decision cannot be made by Smart System UNDERWRITING Process Plan UNDERWRITING Process Plan

36. The Future of Outsourcing Application Smart System MEDITRAK DELIUS UNDERWRITING Process Plan UNDERWRITING Process Plan

37. The Future of Outsourcing Application Smart System MEDITRAK DELIUS Office A Underwriting Philosophy Office B Underwriting Philosophy Office C Underwriting Philosophy Office D Underwriting Philosophy Underwriting Guides SURE LUIS etc UNDERWRITING Process Plan UNDERWRITING Process Plan

38. The Future of Outsourcing Application MEDITRAK Smart System DELIUS Where decision can be made by underwriters Broker Decision sent electronically Insurance Office Decision sent electronically UNDERWRITING Process Plan UNDERWRITING Process Plan

39. The Future of Outsourcing Application Smart System MEDITRAK DELIUS MEDITRAK Where further evidence is required by underwriters UNDERWRITING Process Plan UNDERWRITING Process Plan

40. The Future of Outsourcing Application Smart System DELIUS Special tests Letters to GPs GPRs MEDITRAK Exam by doctors Exam by nurses Where further evidence is required by underwriters UNDERWRITING Process Plan UNDERWRITING Process Plan

41. The Future of Outsourcing Application Smart System MEDITRACKMEDITRAK DELIUS UNDERWRITING Process Plan UNDERWRITING Process Plan

42. The Future of Outsourcing Application MEDITRAK Smart System DELIUS And once decision can be made by underwriters Broker Decision sent electronically Insurance Office Decision sent electronically UNDERWRITING Process Plan UNDERWRITING Process Plan

43. The Future of Outsourcing If managed correctly……. Third Party Outsourcing is Cost effective Financially efficient and ‘’a good place to be ” SUMMARY

44. The Future of Outsourcing Questions