1. Benchmarking: Gaining a 360o view of your claims operation
28 April 2010
Paul Tomlinson

2. Agenda How do UK Insurers currently evaluate performance
relative to industry peers? 1
What are the Major Challenges to gaining a clear
Understanding of performance? 2 3
How does benchmarking act as a solution?

3. How do UK insurers currently evaluate performance relative to industry peers? Top Down Financial Performance
Key Points
Top down Financial Metrics that are available in the public domain provide an Insurer a macro view of peer competitor performance measure such as;
Market Share (GWP)
Operating and Loss Ratios
Expense Ratios
Reserve Releases
Source: AM Best, Deloitte Interpretation

4. How do UK insurers currently evaluate performance relative to industry peers? Comparison of Specific Capabilities
Insurers have differing priorities to
create shareholder value
Leakage – Industry Perspective through Closed File Review
Claims Efficiency Comparisons
Leakage - Identification at Specific Points

5. How do UK insurers currently evaluate performance relative to industry peers? Personal Networks and Rumour

6. What are the major challenges to gaining a clear understanding of performance? Comparing Apples with Apples
Differing Business Models
Influences effecting benchmarking interpretation
Claims Philosophy
Service Offerings
Brand
Distribution
Product
Underwriting\ coverage
Underwriting
Own
Partner
Standard
Bespoke
Whole market/scale
Niche
In-house
Single 3rd party
Service/Cost base
Basic – lowest cost
Service focus
Direct Phone
Direct Internet
Face to face
Multi-channel
Panel
Settlement Guidelines
Integrated Supply Chain
Brand
Distribution
Product
Underwriting coverage
Underwriting
Own
Partner
Standard
Bespoke
Whole market/scale
Niche
In-house
Service/Cost base
Basic – lowest cost
Service focus
Direct Phone
Direct Internet
Face to face
Multi-channel
Single 3rd party
Panel
Offshore / Onshore
Claim Ownership
Handler
Capabilities
Claims Segmentation Rules
Brand
Distribution
Product
Underwriting coverage
Underwriting
Own
Partner
Standard
Bespoke
Whole market/scale
Niche
In-house
Service/Cost base
Basic – lowest cost
Service focus
Direct Phone
Direct Internet
Face to face
Multi-channel
Single 3rd party
Panel
Clients often look to benchmark against their competitors however comparing like for like is difficult due different TOMS
Such as differing service offerings such as Claim ownership, integrated supply chain, devolved claims management, offshore & onshore blends, differing settlement guidelines and claims capabilities all impact on Customer Service, Opex and indemnity performance.
Thus confidence in the interpretation of benchmark results is lowered and the value lessoned. Benchmarking is also challenging as it is usually at a macro level (Expense Ratio, Loss Ratios etc) thus not at the required level of detail to support the identification of opportunities
Bi-Lateral Agreements
Quality of Underwriting
All these factors influence operational costs, average claim costs and customer service

7. Financial Perspective
How does benchmarking act as a solution? Knowing what good looks like for You!
Financial Perspective
Efficiency
Average cost per claim
Line of business
Peril
Leakage
Process stage
Failure demand
Calls per claim
End to end settlement time
Touches per claim
Opex Cost per claim
Customer Perspective
Employee Perspective
Total customer numbers
Average customer tenure
Customer advocacy / Net Promoter Score
Customer satisfaction / Complaint levels
Employee Engagement
Profit per employee
Time to competence for new joining customer facing employees
Employee attrition (unintended attrition)
Employee absence

8. This document is confidential and prepared solely for your information
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