2. IASA 86 TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW Supporting Cultural Change Through Technology Session Number 273

3. Case Study #1 – Knightbrook Insurance Group Assumptions: Claims Performance is a Core Function of an Insurance Company; Effective Claims Service Enhances Retention; Poor Claims Service increases Regulatory and Business Risk. Initiative: Provide a Premier Level of Claims Customer Service, without sacrificing Effective Loss Controls.

4. Case Study #1 – Knightbrook Insurance Group New Values Customer Service Values New Processes Increase effectiveness and efficiency of claims process New Controls Regulatory and service oriented metrics to communicate stretches and goals to management and staff New Leadership National Search for VP Claims for Knight Insurance Group Hired Mr. Gordon Pennington, recently of Farmers New System Extensive investigation of Claims Systems which would meet our goals

5. Case Study #1 – Knightbrook Insurance Group  Software company diligence; what we looked for: Platform; modern, web-based Project Expertise/experience Someone we trusted and could become part of the “change-team” A Company that listened A Partner for the long-term Selected B2-USA’s EZ*Insure Claims System

6. Case Study #1 – Knightbrook Insurance Group  Issue identified in 4 th quarter of 2011  Increased complaint activity  Claims data provided only at high level  On site audit conducted January 2012  Audit findings included:  Reserve inadequacy  Regulatory compliance issues  Lack of proactive claim handling resulting in low closure ratio and high severity

7. Case Study #1 – Knightbrook Insurance Group  Audit findings (cont.) included:  Inadequate staffing resulting in high case loads with little to no activity  Inappropriate coverage determination and application  Corrective Action  Complete review of all open pending resulting in a estimated reserve inadequacy of $6 million  On Site presence from 4/2012 to 6/2012 to assist CMR with establishing proper claim handling protocols  Provided best practices and protocols to be established

8. Case Study #1 – Knightbrook Insurance Group June 2012 Knight assumed handling of all claims Inventory and overnight shipment of 3400 files Created a duplicate claims operation (office space, systems, hardware) Staffed with 25 new employees

9. Case Study #1 – Knightbrook Insurance Group Impact during 2012 Severity decreased by $3672 per claim Average earned premium vs. average total incurred increased by $2100 per policy Ability to establish stronger underwriting controls and take appropriate rate increase based upon accurate claims data Pending Reduction CMR had a 6% closure ratio on loss year 2011 claims Knight closed 74% of all loss year 2011 pending in 6 months (1300 claims) Subrogation Increased from $106,600 collected in three years, to $498,000 collected in one year

10. IASA 86 TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW Please Complete the Session Evaluation Form on the Conference App and Include Your Conference Registration ID# to be Included in a Drawing for a Free Conference Registration for the 2014 Annual Conference! NOTE: Your Conference Registration ID# is Located at the Bottom Left Hand Corner of Your Badge.