Investor Day 2012 - Insurance Underwriting and Claims
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Transcript of Investor Day 2012 - Insurance Underwriting and Claims
Investor Day 2012
Ageas UK
-
Insurance Underwriting
& Claims
Mark Cliff
MD Ageas Insurance
Limited
INVESTOR DAY 2012
Profile
Underwriting excellence
Claims excellence
Conclusions
Underwriting Claims
Profile
Technical excellence
Data
Anti-fraud management
Process excellence = low
cost, high service
Supply chain management
Anti-fraud management
Investor Day 24-25 September 2012 | Andaz Liverpool Street London 2
7
16
25
28
31
61
76
84
91
138
HDI Haftpflicht
Groupama
ACE
AIG
BUPA
Ageas
Munich RE
Royal Bank Scot
Aviva plc
AXA
Source: Datamonitor
Profile Key market positions
Household Private Motor
Travel
Investor Day 24-25 September 2012 | Andaz Liverpool Street London 3
GWP in £ mio
163
195
281
283
395
494
565
837
963
967
Co-operative
Nat Farmers
Zurich Fin Serv
Legal&General
Ageas
AXA
RSA Ins Grp
Aviva plc
Lloyds Banking Grp
Royal Bank Scot
300
413
457
517
616
1,028
1,034
1,218
1,627
1,729
Zurich Fin Serv
esure Hldgs
Co-operative
RSA
AXA
Ageas
Liverpool Vic FS
Aviva
RBS
Admiral
GWP in £ mio
GWP in £ mio
Profile
Underwriting excellence
Claims excellence
Conclusions
Underwriting excellence Sustained improvement resulting from corrective measures
Following Motor market issues
in 2009 & extreme weather in
2010, we are now on an
improving trend.
Combined ratio 2008 – 6M 12
73.1% 80.4% 81.5% 74.6% 73.0%
29.5%27.7% 28.0%
25.3% 25.8%
102.6%108.1% 109.5%
99.9% 98.8%
2008 2009 2010 2011 6M 12
claims ratio expense ratio
Investor Day 24-25 September 2012 | Andaz Liverpool Street London 5
Underwriting excellence Sustained improvement
Technical Excellence
Strong technical discipline
Chartered status
Strengthening of actuarial & pricing team
Funded for extreme weather on
Household line
AIL has a 10 bp advantage on Motor:
Combined ratio of 96% vs. 106% market
average
Data
Revamp of Motor & Household rating
structures
Increased use of predictive external
sources
Introduction of dynamic pricing starting
with credit scoring
Utilisation of unique customer data, eg
Tesco & M&S clubcards
Anti-Fraud management
Block, validate & reward
Signed up to SIRA database
Fraud investigation team working with
Insurance Fraud Bureau
Claims Underwriting Exchange (CUE) at
point of sale
Investor Day 24-25 September 2012 | Andaz Liverpool Street London 6
Benchmarking of Individual InsurersTotal Market Overview 2011
Source: Deloitte Analytics based on AM Best data
Gro
ss M
arke
t Sh
are
20
11
(%)
Net Combined Ratio (%)
PrudentialChubb
EcclesiasticalTravelersUSAABrit
MMA TradexAIOISabre
GroupamaProvident
Highway
esureCISAllianz
NFU Mutual
Liverpool VictoriaAXA Insurance UK
RSA
UKI
4.6%
106.1%
0
2
4
6
8
10
12
14
8090100110120130140
Overall Ageas (TU and Ageas combined)
AvivaInsurance
The largest insurer with a
COR below 100%
Outperforming vast
majority the market
Underwriting excellence Motor performance better than market norms
Benchmarking of Individual Insurance
Net combined ratio 2011 (%)
Gro
ss m
ark
et sh
are
20
11
(%
)
Investor Day 24-25 September 2012 | Andaz Liverpool Street London 7
Profile
Underwriting excellence
Claims excellence
Conclusions
Claims excellence Sustained improvement
Process Excellence
The Ageas Way
Processes designed to deal with
customers predicament
Handled by employee closest to
customer
No call boards/IVR/offshoring
As much dealt with in 1 call
Efficient processes = low cost = high
service
Supply Chain Management
Innovative/quicker settlement
Identify new and upcoming providers or
independents
Solution Centres – working closely with
small but more innovative repairers
Have our own overseas Assistance
Service
Anti-Fraud management
Every call handler trained to spot fraud
Care flag system
Supplemented by investigation team
Investor Day 24-25 September 2012 | Andaz Liverpool Street London 9
Principles:
Concentrate on customer service and desire to get car back quickly
Disturb fabric of car as little as possible
Increased repairer profitability – sustainability of supply chain
Consume less
Results:
Average key to key time now 6.3 days (market 12-14)
Best 20 repairers consistently under 3 days. PMC 1.8 days
Claims excellence Solution Centre Concept
Investor Day 24-25 September 2012 | Andaz Liverpool Street London 10
Claims excellence Ageas scores consistently highly vs. competitors on Service satisfaction
Top 3 claims provider compared to market
Ageas scores consistently highly vs
competitors on service satisfaction
“World Class” status, Institute of
Customer Services
Claims Innovation awards 2012
Joint top for Personal lines Claims
Service, 1st for Personal lines Underwriting
Service - Insurance Age Sentiment Survey
May 2012
Top for Personal lines E-trading Service – Insurance Times ‘Broker Service Survey
– Personal lines’ 2011
Investor Day 24-25 September 2012 | Andaz Liverpool Street London 11
Source: FSA 2010 returns and Ageas internal analysis
Figures concern Ageas Insurance Limited
Ageas almost half that of UK
Market average
Claims excellence Low cost: Operate at lowest level of cost
Incurred claims handling expense /net incurred claims Estimated Unit Cost Production (Private Motor 2011
Household claims mgmt costs / net incurred claims
One of the most efficient for claims
operations
Lowest unit costs of production in Motor
Investor Day 24-25 September 2012 | Andaz Liverpool Street London 12
7.4%
4.0%
4.8%
4.8%
5.4%
5.6%
6.2%
6.2%
8.0%
8.9% 11.5%
UK Market
AXA
LV= / Highway
Co-Op
Ageas
NFU
esure
RSA
Aviva / Gresham
Allianz
Direct Line
63.1
17.8
40.2
41.9
43.3
44.4
45.7
47.0
51.4
53.4
56.2
57.1
61.4
76.7
82.5
91.1
UK Non-Life…
Ageas
AXA
NFU
Sabre
Groupama
Aviva
RSA
Highway
Tesco…
esure
Tradex
LV=
Co-Operative
Allianz
RBSI
9.0%
4.3%
4.6%
5.4%
5.9%
6.6%
9.3%
9.7%
10.1%
10.8%
11.2%
UK Market
Co-Op
Ageas
LV= / Highway
L&G
NFU
RSA
Allianz
Lloyds TSB / St Andrews
Aviva / Gresham
Direct Line
Profile
Underwriting excellence
Claims excellence
Conclusions
Technical excellence in underwriting driven by people & processes
Motor performance well above market norms
Market leading reputation for service & claims innovation
Delivered whilst maintaining low cost model
Conclusions
Investor Day 24-25 September 2012 | Andaz Liverpool Street London 14
Disclaimer Certain of the statements contained herein are statements of
future expectations and other forward-looking statements
that are based on management's current views and
assumptions and involve known and unknown risks and
uncertainties that could cause actual results, performance or
events to differ materially from those expressed or implied in
such statements. Future actual results, performance or
events may differ materially from those in such statements
due to, without limitation, (i) general economic conditions,
including in particular economic conditions in Ageas’s core
markets, (ii) performance of financial markets, (iii) the
frequency and severity of insured loss events, (iv) mortality
and morbidity levels and trends, (v) persistency levels, (vi)
interest rate levels, (vii) currency exchange rates, (viii)
increasing levels of competition, (ix) changes in laws and
regulations, including monetary convergence and the
Economic and Monetary Union, (x) changes in the policies of
central banks and/or foreign governments and (xi) general
competitive factors, in each case on a global, regional and/or
national basis. In addition, the financial information
contained in this presentation, including the pro forma
information contained herein, is unaudited and is provided
for illustrative purposes only. It does not purport to be
indicative of what the actual results of operations or financial
condition of Ageas and its subsidiaries would have been had
these events occurred or transactions been consummated
on or as of the dates indicated, nor does it purport to be
indicative of the results of operations or financial condition
that may be achieved in the future.
Investor Day 24-25 September 2012 | Andaz Liverpool Street London 15