Guillaume RosenwaldDeputy Managing Director
of insurance activitiesMacif
( France )
Friday, 3 September 2010
MACIFGROUP
From 1960 to the present dayMACIF
Macif established in motor insurance
Chairman : Gérard AndreckManaging Director : Roger IseliHead Office : Niort
8,900 employees
1960
First diversification – home insurance1970
Regionalisation : with over 2.5 millionpolicyholders, Macif is reorganised into 11 mainly autonomous geographical areas
1987
Macif is a group with diversified activities2010
4.7 million policyholdersFrench leader in car and motorcycle insurance
Commitment towards solidarityMACIF
Macif is a mutual insurance company with no intermediaries
Macif is committed to the principles of social economy
It has no shareholders, no need for return on investment
Its policyholders insure each other mutually and are individually insured
Breakdown of Group Turnover (2009)DIVERSIFIED ACTIVITIES
33 %33 %MotorMotor
Health, Disability & Life
42 %
9 %
Savings
10 %10 %HomeHome
Other6 %
5.7Billion €
MACIF GROUPMAIN PROJECTS
Start-up of our banking offer :Start-up of our banking offer :2nd half of 2010
Strategic allianceStrategic allianceMacif/Maif/Caisse d’Epargne GroupMacif/Maif/Caisse d’Epargne Group
An offer based on mutualistic principlesAn offer based on mutualistic principles
MACIF GROUPMAIN PROJECTS
Creation of a partnership (SGAM) between Creation of a partnership (SGAM) between Macif/Maif/Matmut : Macif/Maif/Matmut : SferenSferen
perpetuate the mutual insurance model
reinforce our position and our competitivity
In order to :
Signature of the SGAM’s Articles of Association and Membership Agreements
December 2009December 2009
Approval by the Insurance Companies’ Committee February 2010February 2010
Approval by the Office of Fair TradingJune 2010June 2010
MACIF GROUPEuropean partnership with mutuals
Direct settlement agreements in France
Guillaume RosenwaldDeputy Managing Director of insurance activities, Macif France
12th Hydra meeting 3.9.2010
3.9.2010 12th Hydra meeting – G. Rosenwald10
1/ Direct Settlement Agreement objectives.
2/ Requirements for an efficient and long-term agreement.
3/ Three examples in the French market
- Motor insurance material damages (IRSA)- Home insurance water damages (Cidre – Cidecop)- Motor insurance light bodily injuries (IRCA)
4 / Direct settlement and market of insurance
Direct settlement agreements in France - IndexPages
3
4
5
22
3.9.2010 12th Hydra meeting – G. Rosenwald11
Improve claims settlement services, time, quality and innovation.
Simplify processes and saving operational costs.
Control of claims costs
1/ Direct Settlement Agreement objectives
3.9.2010 12th Hydra meeting – G. Rosenwald12
Economy :- Approaching cost neutrality,- Market statistics - Transparency /costumers.
Legal :- Respect of EU and national laws,- Taking account of precedents (simplicity and stability of precedents),- A very low demand to sue opponents.
Operational :- very good experts (assessors) in the topic,- high level of trust between the actors.
2/ The requirement of an efficient and long term agreement
3.9.2010 12th Hydra meeting – G. Rosenwald13
o The “agreed accident statement” has been used by she insured since 1964,o First agreement of direct settlement set in 1968 (under pressure of the French government)o Experts’ (assessors) competence and honesty supervised by the Ministry in charge of transporto Clear and precise laws and precedents
1.7 million claims / year
3/ Example 1 : Motor material damages
Context
3.9.2010 12th Hydra meeting – G. Rosenwald14
« Indemnisation et Recours des Sinistres Automobile, IRSA »« Indemnisation et Recours des Sinistres Automobile, IRSA »
Quick descriptionQuick description
Direct Settlement for all material Direct Settlement for all material damagesdamages
Fully computerized Fully computerized exchanges and fixed exchanges and fixed
compensation if 2 compensation if 2 vehicles andvehicles and
damages < 6500 € damages < 6500 €
Precise rules of recourse Precise rules of recourse for all other situation for all other situation
(including pile up)(including pile up)
3/ Example 1 : Motor material damages
Exhaustive codification of the accident’s Exhaustive codification of the accident’s situationssituations
Extensive statistical analyses …Extensive statistical analyses …
3.9.2010 12th Hydra meeting – G. Rosenwald15
« Indemnisation et Recours des Sinistres Automobile, IRSA » « Indemnisation et Recours des Sinistres Automobile, IRSA » Benefits :Benefits :
Great value for the insured (quick and high Great value for the insured (quick and high level service)level service)
Simplicity of computing for all the actors,Simplicity of computing for all the actors,
Insured self settlement by internet made Insured self settlement by internet made possible for most of 2 vehicles accidents. (if possible for most of 2 vehicles accidents. (if developed by the insurer)developed by the insurer)
Great freedom of organization left to the Great freedom of organization left to the insurance companies, full benefits for repair insurance companies, full benefits for repair shops agreementsshops agreements
3/ Example 1 : Motor material damages
3.9.2010 12th Hydra meeting – G. Rosenwald16
« Indemnisation et Recours des Sinistres Automobile, IRSA » « Indemnisation et Recours des Sinistres Automobile, IRSA » Limits :Limits :
Economic neutrality is imperfect,Economic neutrality is imperfect,
Applies correctly to cars, but trucks are Applies correctly to cars, but trucks are over compensated and bikes are under over compensated and bikes are under compensated.compensated.
(Some insurers specialized in bikes stay out (Some insurers specialized in bikes stay out of the agreement)of the agreement)
Promote the settlement of micro claimsPromote the settlement of micro claims
3/ Example 1 : Motor material damages
3.9.2010 12th Hydra meeting – G. Rosenwald17
« Indemnisation et Recours des Sinistres Automobile, IRSA » « Indemnisation et Recours des Sinistres Automobile, IRSA » ConclusionConclusion
Possible next evolution :Possible next evolution :
Fixed compensation depending on the Fixed compensation depending on the type of vehicles.type of vehicles.
3/ Example 1 : Motor material damages
IRSA is considered by the French Market IRSA is considered by the French Market as a successas a success
3.9.2010 12th Hydra meeting – G. Rosenwald18
o Creation of “agreed accident statement”o Experts (assessors) corps largely heterogeneous.o Few and imprecise laws and precedentso Low satisfaction from the insured
1.2 million claims / year
3/ Example 2 : Home insurance water damages
Context
3.9.2010 12th Hydra meeting – G. Rosenwald19
«Convention d’Indemnisation et De Recours des «Convention d’Indemnisation et De Recours des dégâts des Eaux, CIDRE and CIDECOP »,dégâts des Eaux, CIDRE and CIDECOP »,
Quick description :Quick description :
Direct settlement for Direct settlement for damages < 1600 €damages < 1600 €
No compensation No compensation between insurersbetween insurers
For other cases : For other cases :
conduct of an assessment conduct of an assessment and organization of the and organization of the
recourserecourse
3/ Example 2 : Home insurance water damages
No computerized exchanges,No computerized exchanges,
No statisticsNo statistics
3.9.2010 12th Hydra meeting – G. Rosenwald20
«Convention d’Indemnisation et De Recours des «Convention d’Indemnisation et De Recours des dégâts des Eaux, CIDRE and CIDECOP»dégâts des Eaux, CIDRE and CIDECOP»
Benefits :Benefits :
Simplicity for very small damages.Simplicity for very small damages.
A sensible improvement of satisfaction A sensible improvement of satisfaction from the insured.from the insured.
More frequent management of the More frequent management of the repair by the insurer.repair by the insurer.
3/ Example 2 : Home insurance water damages
3.9.2010 12th Hydra meeting – G. Rosenwald21
Economic neutrality is unknown,Economic neutrality is unknown,
No real benefits for medium damages No real benefits for medium damages because of the delay for drying off,because of the delay for drying off,
Allows poor reparation of the causes Allows poor reparation of the causes and generates repeated claims and generates repeated claims (especially in condominium) (especially in condominium)
3/ Example 2 : Home insurance water damages
«Convention d’Indemnisation et De Recours des «Convention d’Indemnisation et De Recours des dégâts des Eaux, CIDRE and CIDECOP»dégâts des Eaux, CIDRE and CIDECOP»
Limits :Limits :
3.9.2010 12th Hydra meeting – G. Rosenwald22
Probable next evolution :Probable next evolution :
Better classification of the claims Better classification of the claims situations.situations.
The French Market is largely unsatisfied The French Market is largely unsatisfied with Cidre and Cidecop agreements.with Cidre and Cidecop agreements.
Economically, all the actors are quite Economically, all the actors are quite sure to loose money …sure to loose money …
3/ Example 2 : Home insurance water damages
«Convention d’Indemnisation et De Recours des «Convention d’Indemnisation et De Recours des dégâts des Eaux, CIDRE and CIDECOP»dégâts des Eaux, CIDRE and CIDECOP»
Conclusion : Conclusion :
3.9.2010 12th Hydra meeting – G. Rosenwald23
o Since 1985 the “Badinter law” forces the liability insurer to offer an “honest” compensation directly to the victims. o Insurers receive automatically the statements made by police for bodily accidents.o More than 95 % of the bodily damages are compensated without trial. (about 99 % for lights injuries),o The medical experts are well organized and use a very clear method of physiological evaluation.o All courts use the same method of economic evaluation but level varies.
0.2 million claims / year
3/ Example 3 : Motor insurance bodily damagesContext
3.9.2010 12th Hydra meeting – G. Rosenwald24
«Convention d’Indemnisation et De Recours des Corporels «Convention d’Indemnisation et De Recours des Corporels IRCA (2003) » IRCA (2003) »
Quick description :Quick description :
Direct settlement if partial disablement Direct settlement if partial disablement =< 5 % =< 5 %
Fixed compensation if definitive Fixed compensation if definitive disablement = 0 disablement = 0 Recourse on real costs with a limit for Recourse on real costs with a limit for
other casesother cases
For other cases : For other cases :
conduct of an conduct of an assessment and assessment and
organization of the organization of the recourserecourse
No computerized exchanges since No computerized exchanges since inception,inception,
Fully computerized exchanges since Fully computerized exchanges since 1/1/2010, statistics tool in place1/1/2010, statistics tool in place
3/ Example 3 : Motor insurance bodily damages
3.9.2010 12th Hydra meeting – G. Rosenwald25
«Convention d’Indemnisation et De Recours des Corporels «Convention d’Indemnisation et De Recours des Corporels IRCA (2003) »IRCA (2003) »
Benefits :Benefits :
Great value for the insured (quick and high Great value for the insured (quick and high level service).level service).
Large freedom of organization left to the Large freedom of organization left to the insurers.insurers.
Full benefits dedicated to the victim and their Full benefits dedicated to the victim and their family’s help.family’s help.
Strong management simplification for fully Strong management simplification for fully computerized insurerscomputerized insurers
3/ Example 3 : Motor insurance bodily damages
3.9.2010 12th Hydra meeting – G. Rosenwald26
Cost management issue : No real Cost management issue : No real benefits for medium and small size benefits for medium and small size companies who can’t afford to companies who can’t afford to computerize bodily claims,computerize bodily claims,
3/ Example 3 : Motor insurance bodily damages
«Convention d’Indemnisation et De Recours des «Convention d’Indemnisation et De Recours des Corporels IRCA (2003) »Corporels IRCA (2003) »
Limits :Limits :
3.9.2010 12th Hydra meeting – G. Rosenwald27
Probable next evolution :Probable next evolution :
Fixed compensations based on a table Fixed compensations based on a table depending on the disability seriousnessdepending on the disability seriousness
Big and fully computerized insurers are Big and fully computerized insurers are very happy with this agreement.very happy with this agreement.
Small insurers are “perplexed”Small insurers are “perplexed”
3/ Example 3 : Motor insurance bodily damages
«Convention d’Indemnisation et De Recours des «Convention d’Indemnisation et De Recours des Corporels IRCA (2003) »Corporels IRCA (2003) »
ConclusionConclusion
3.9.2010 12th Hydra meeting – G. Rosenwald28
Direct settlement has a real sense if the Direct settlement has a real sense if the quality of the settlement is a quality of the settlement is a
differentiation in the competition.differentiation in the competition.
4/ Direct settlement and the insurance market
Direct settlement allows cuts of cost on Direct settlement allows cuts of cost on the global amount (claims the global amount (claims
+management)+management)
But not always on each separate cost.But not always on each separate cost.
Some statements …Some statements …
3.9.2010 12th Hydra meeting – G. Rosenwald29
4/ Direct settlement and market of insurance
Direct settlement and computerized Direct settlement and computerized exchanges are mainly profitable for exchanges are mainly profitable for
medium and big size firms.medium and big size firms.
But a dominant actor do no need such But a dominant actor do no need such agreement …agreement …
more statements …more statements …
3.9.2010 12th Hydra meeting – G. Rosenwald30
4/ Direct settlement and market of insurance
Direct settlement can succeed on a Direct settlement can succeed on a market if :market if :
- Most insurers manage themselves the Most insurers manage themselves the claims (or by subsidiaries) claims (or by subsidiaries)
- The market is shared between medium The market is shared between medium size companies.size companies.
““My own conclusions”My own conclusions”
3.9.2010 12th Hydra meeting – G. Rosenwald31
Thank You
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