25 April 20171

Tryg Procurement- Releasing the full potential of Tryg’s cost base

Morten Ochsner Hald, CPO

2

Background

NLS

Methodology

Supplier strategy

Claim systems, Scalepoint, In4mo and E-Auction

3

NLS activated in 2011

- Efficio consultants onsite the first 1 ½ year

- Total reconstruction of the Procurement organization and The

winner of the CIPS, Supply Management Awards 2013

- 25 % fewer suppliers

- All targets have been reached every year

- IT procurement are added to team in FEB 2016 and Efficio

consultants are onsite again between SEP 2016 – DEC 2017

- The team consists of 40 FTE

CV for CPO/VP Morten Ochsner Hald

- 4 years in Tryg

- 7 years in Scalepoint as Head of Procurement and Data

management + the office in Luzern and Dublin. Working with

+ 30 Insurance companies in Europe

Background

Annual spend (Claim ~ DKK13 bn + Indirect ~DKK1.3 bn )

Motor

28%

Building

19%

Content

15%

Other Claims 4%

Health & Travel

22%

Indirect

12%

Spend by categories

Motor Building Content Other Claims Health and Travel Indirect

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• E-auctioning/RFQ of major reconstruction tasks

• Consolidated network of craftsmen and damage control

• Fixed prices on subtasks (incl. hourly wage and materials)

• In4mo claims handling system

• Scalepoint Content

• Stricter control of documentation

• Consolidated network of workshops and increased referral rates

• Consolidated network of glass repair suppliers

• Nordic roadside assistance supplier

• Outsourcing/new supplier of Tryg’s emergency centre

• Consolidated network of clinics and increased referral rates

• Concept development e.g. health support team

• Outsourcing of Tryg’s health team

• Sourcing of contracts: cleaning, marketing, IT consulting, legal etc. (EFFICIO)

• Enhanced fraud detection

5

Next Level Sourcing initiatives

Text slide

700

500

2011

2014

2017

mDKK

6

Implementation & Supplier Mgt

Implement

contracts /

services &

handover

into BAU

Supplier

Manage-

ment

6 7

Sourcing Strategy

Baseline cost

analysis

Supply market

analysis

Business

specifications

Set up

sourcing

initiative

Develop

sourcing

strategy

0 1a

1b

1c

2

Sourcing Initiative Delivery

Execute

Strategy

e.g. RFP or

other

Evaluate

RFP &

develop

clarification

/

negotiation

strategy

Conduct

supplier

clarifi-

cations /

negotia-

tions &

select

3 4 5

Gate 3

Approve final

selection of suppliers

Sign off savings

Gate 2

Approve RFP

supplier shortlist

Approve negotiation

strategy

Gate 1

Approve scope and

strategy

Gate 4

Review progress

against

implementation plan

Gate 0

Submit Project

Definition Report

Process comments

• The sourcing process secures commercial efficiency and operational/deliverable quality

• A proper governance structure is required to fully maximize potential

• Gates secures accountability among stakeholders

Methodology – 7 step sourcing & procurement process

Successful sourcing initiatives, Supplier strategy

• 10 - 20% saving on cost after outsourcing

• Improved service levels

• Increased customer satisfaction

• Customer complaints dropped

Tryg Alarm – A successful outsourcing case

Outsourcing of the health team to Falck

Benefits realised

Motor repair – Tryg is + 7 % under the market

Tryg

IC/DK

7

Claim system overview

Scalepoint – Private Content Solution

In4mo – Building Solution

Scanmarket – e-Auction

Online Settlement Tool

Matching Engine

Online Replacement Shop

Electronic Voucher (SMS)

Reduced pay outs

Reduced cycle time

Optimized use of business rules

Procurement volume utilized

Core features Value Proposition

Online Settlement Tool

Documentation

Online Customer site

Supplier responsibilities

Online Settlement Tool

Documentation

Unlimited supplier

High level of competition

Reduced pay outs

Reduced cycle time

High level of control

Use of ICC (fix prices)

Reduced pay outs

Reduced cycle time

High level of control

Transparency

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– amount of suppliers / (amount of supplier within 80% of the spend)

UncategorisedMarketingProfessional

Services

HR/TravelLogisticsIT &

Telecoms

Facilities

Management

Total

Spend

>3,282 / (92) 214 (12)

431 (34)

67 (4)

405 (59)

154 (30)

234 (26)

Uncategorised

Non-IT IT & Telecoms

Fairly high consolidation of spend, however still a challenge in terms of number of suppliers

Annual indirect expenditure is DKK1.3bn

Potential simplification and savings

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