Investor Day 2012 - Insurance Underwriting and Claims

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Information about Investor Day 2012 - Insurance Underwriting and Claims
Investor Relations

Published on March 4, 2014

Author: Ageas

Source: slideshare.net

Description

Mark Cliff on Ageas UK's Insurance Underwriting and Claims

Ageas UK Insurance Underwriting & Claims Mark Cliff MD Ageas Insurance Limited INVESTOR DAY 2012 Investor Day 2012

Profile Underwriting excellence Claims excellence Conclusions

Profile Underwriting  Technical excellence  Data  Anti-fraud management Claims  Process excellence = low cost, high service  Supply chain management  Anti-fraud management Investor Day 24-25 September 2012 | Andaz Liverpool Street London 2

Profile Key market positions Private Motor Household GWP in £ mio GWP in £ mio Admiral 1,729 RBS 1,627 Aviva Royal Bank Scot 967 Lloyds Banking Grp 963 Aviva plc 1,218 Liverpool Vic FS 1,034 RSA Ins Grp Ageas 1,028 837 AXA AXA 281 Nat Farmers 413 Zurich Fin Serv 283 Zurich Fin Serv 457 esure Hldgs 395 Legal&General 517 Co-operative 494 Ageas 616 RSA 565 Co-operative 300 195 163 Travel GWP in £ mio AXA 138 Aviva plc 91 Royal Bank Scot 84 Munich RE 76 Ageas 61 BUPA 31 AIG 28 ACE 25 Groupama HDI Haftpflicht 16 7 Investor Day 24-25 September 2012 | Andaz Liverpool Street London Source: Datamonitor 3

Profile Underwriting excellence Claims excellence Conclusions

Underwriting excellence Sustained improvement resulting from corrective measures Combined ratio 2008 – 6M 12 102.6% 29.5% 108.1% 109.5% 99.9% 27.7% 98.8% 25.3% 25.8% 28.0% 73.1% 80.4% 81.5% 74.6% 73.0% 2008 2009 2010 2011 Following Motor market issues in 2009 & extreme weather in 2010, we are now on an improving trend. 6M 12 claims ratio expense ratio Investor Day 24-25 September 2012 | Andaz Liverpool Street London 5

Underwriting excellence Sustained improvement Technical Excellence Data  Strong technical discipline  Revamp of Motor & Household rating structures  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  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

Underwriting excellence Motor performance better than market norms Benchmarking of Individual Insurers Total Market Overview 2011 Insurance Benchmarking of Individual  The largest insurer with a 106.1% 14 COR below 100% Aviva Insurance  Outperforming vast UKI Gross Market Share 2011 (%) Gross market share 2011 (%) 12 majority the market 10 RSA Overall Ageas (TU and Ageas combined) 8 AXA Insurance UK Liverpool Victoria 6 4.6% 4 Allianz CIS esure NFU Mutual Highway 2 Travelers Brit 0 140 130 Groupama Provident AIOI Ecclesiastical Chubb Sabre Tradex MMA USAA 120 110 Net combined ratio 2011 (%) Prudential 100 90 80 Net Combined Ratio (%) Source: Deloitte Analytics based on AM Best data Investor Day 24-25 September 2012 | Andaz Liverpool Street London 7

Profile Underwriting excellence Claims excellence Conclusions

Claims excellence Sustained improvement Process Excellence Supply Chain Management  The Ageas Way  Innovative/quicker settlement  Processes designed to deal with customers predicament  Identify new and upcoming providers or independents  Handled by employee closest to customer  Solution Centres – working closely with small but more innovative repairers  No call boards/IVR/offshoring  Have our own overseas Assistance Service  As much dealt with in 1 call  Efficient processes = low cost = high service Anti-Fraud management   Care flag system  Investor Day 24-25 September 2012 | Andaz Liverpool Street London Every call handler trained to spot fraud Supplemented by investigation team 9

Claims excellence Solution Centre Concept 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 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

Claims excellence Low cost: Operate at lowest level of cost Incurred claims handling expense /net incurred claims  Lowest unit costs of production in Motor  One of the most efficient for claims operations Direct Line Allianz Aviva / Gresham RSA esure NFU Ageas Co-Op LV= / Highway AXA UK Market Estimated Unit Cost Production (Private Motor 2011 8.9% 11.5% 8.0% 6.2% 6.2% 5.6% 5.4% 4.8% 4.8% 4.0% 7.4% RBSI Allianz Co-Operative LV= Tradex esure Tesco… Highway RSA Aviva Groupama Sabre NFU AXA Ageas 91. 82.5 76.7 61.4 57.1 56.2 53.4 51.4 47.0 45.7 44.4 43.3 41.9 40.2 17.8 UK Non-Life… 63.1 Household claims mgmt costs / net incurred claims  Ageas almost half that of UK Market average Direct Line Aviva / Gresham Lloyds TSB / St Andrews Allianz RSA NFU L&G LV= / Highway Ageas Co-Op Source: FSA 2010 returns and Ageas internal analysis Figures concern Ageas Insurance Limited Investor Day 24-25 September 2012 | Andaz Liverpool Street London UK Market 11.2% 10.8% 10.1% 9.7% 9.3% 6.6% 5.9% 5.4% 4.6% 4.3% 9.0% 12

Profile Underwriting excellence Claims excellence Conclusions

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 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

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