Andy Jones Associate Partner 09 October 2008

1. Workshop 2Supply Chain ManagementEnsuring effective supply chain management to reduce market fragmentation Andy Jones Associate Partner 09 October 2008

2. Workshop - Proposed Agenda • Introductions • Workshop objectives • Supply chain – how effective is it? • Interactive discussion around challenges and issues • Supply Chain – potential solutions • Interactive discussion around solutions • Greater collaboration – IT consumerisation and social networking software • Conclusions and Summary

3. Introductions

4. Andy Jones - Introduction • Over 20 years experience working in general insurance and consulting firms within financial services markets • Held senior management positions at Royal & SunAlliance, FirstAssist, youatwork Ltd and GHL Insurance Services (Zenith and Link Insurance) • Operations, IT and Change Management positions • Worked as a consultant at Impact Plus (now Hitachi Consulting) – independent consulting firm • Key area of expertise is Operational Transformation – helping companies to ‘operationalise’ their business strategy through defining new operating models, implementing changes and realising benefits • Joined CSC Financial Services EMEA Consulting Group in April 2008

5. Claims Supply Chain • Questions • Can a procurement centric focus on the claims supply chain lead to a • fragmented customer service? • Will greater collaboration in the claims supply chain help to reduce claims • costs and improve customer service? • Is the claims supply chain as effective as it could be?

6. Workshop Objectives

7. Objectives • To explore the effectiveness of the supply chain • Why is it not effective as it could be – what are the market drivers? • Is it fragmented and if so what are the consequences? • What are the key challenges that everyone is facing? • What are the potential solutions we should be looking at to improve effectiveness and reduce fragmentation? • How can we reduce overall claims costs • How can we improve customer service?

8. Supply Chain – how effective is it?

9. Salvage Supplier Approved Repairer Inspection Medical Report Driver Salvage Supplier Solicitor Vehiclerecovery ApprovedRepairer Procurement Materials Third Parties Driver Inspection MedicalReport Co-insurance Recovery PrivateMotor Repairer ExpertEstimatingSystem Invoices Re-insurance Claimant Estimate BodilyInjury Statement Renewal FNOL CallCentre CaseManagement Fulfillment Payee Recovery ClaimsFinalisation Verification Settlement Negotiation Payment DocumentManagement Assignment FNOL Assignment Investigation Litigation Recoveree MIS PolicyCover Reserve Liability PaymentMechanism Reports Third Party Approved Supplier Witness PropertyDamage Workflow Fraud LegalManagement GeneralLedger Contents Image Negligence Accounting ApprovedSupplier ThirdParty Witness ApprovedRepairer LossAdjuster Catastrophe Supply Chain - end to end claim process is complex Insured Claimdetails Statusenquiry Disputeresolution Salvage &subrogation FNOL Offer Claims process Event Closure Approved Repairer Loss Adjustor Coverageverification Assessment Negotiation Settlement

10. Supply Chain - Numerous Third Parties / Multiple Touch Points

11. Creating the right balance – administration and indemnity costs • Indemnity costs • settlement amounts • subrogation, salvage and recoveries • Administration costs • handling costs – management, negotiators, clerical • audit, inspection and loss adjusting fees Supply Chain Costs Managing the supply chain effectively is essential to creating the right balance

12. Supply Chain – Challenges and Issues • Outsourcing (delegated authority, third party administrators, on-shore, offshore etc) leads to increased hand-offs and potentially reduces the customer experience • Referral fees for credit hire, bodily injury claims, repair and replace networks • Distributors (Brokers and Intermediaries) are often the first point of contact before hand-off to the Insurer • Procurement centric models can reduce costs at points in the supply chain but is the value provided and customer service optimised? • Third parties promoting making injury claims and potential litigation

13. Supply Chain – Potential Solutions

14. Supply Chain – Potential Solutions • Greater collaboration between parties to change outcomes within the supply chain – reduce cycle times and costs, improve service • On-line claims enquiry and tracking for the claimant • Self service claims - on-line tools for the claimant to manage their claim • On-line delivery of goods and services– using eBay, Amazon, PayPal, for example • Automation of processes between suppliers to reduce hand-offs and opportunities for inconsistency and mistakes Is there an opportunity to do what Apple did to the music industry – a game changing approach?

15. Greater CollaborationIT Consumerisation andSocial Networking Software

16. The origins of IT Consumerisation Top-down Innovation 1964-2000 • Military Applications • Business Usage • Consumer R&D • Military R&D • Business Applications • Consumers and Small Business • Usage Mainframes,Displays, Storage Networks, Software PCs, PDAs, Phones, CDs, Cameras, Video, Semiconductors, Broadband, Wireless, etc Bottom-up Innovation 1980-2010

17. Consumerisation today 9,659,276 Users Online Do your employees havebetter ITat home thanat work?

18. An emerging public infrastructure Advertising – Google, Yahoo!, Microsoft Used market – eBay – Amazon, PayPal, credit cards E-commerce Accounting/payroll – Intuit CRM/HR – Salesforce.com, Employease Hosting/Software – Amazon, open source Support – Geek Squad, Best Buy – Webex, MSN, Google Mashup Editor Collaboration Voice & mobility – Wi-Fi, Skype Email & IM – Gmail, Yahoo! Public Infrastructure

19. Consumerisation as a bottom-up process Large Mid-size Small business Utility- Style Public Infrastructure Consumers Time

20. The great transition, 2000-2020? Private Infrastructure – One-to-One 100% IT Usage Open Public Infrastructure -- One-to-Many Proprietary Social Networking Software 2020 2000 IT Consumerisation has led to a growth in Social Networking Software that can support greater collaboration

21. What is Social Networking Software? Software that helps people find, and collaborate with other people.

22. Build social networking software functionality into our business processes How can we use Social Networking Software? We want to enable people to find each other...

23. ....to collaborate with each other, all within the “flow” of their normal tasks. How can we use Social Networking Software? Benefits – less friction and lower co-ordination costs

24. Example Current Model Ask supervisor or creates activity in internal workflow system Telephone call, letter or email Telephone call, letter or email Potentially multiple contacts Potential time delay Contacts an Expert to get guidance and advice Claims Negotiator suspects fraud, not sure how to handle Receives advice and makes decision Progress the claim to the next stage • Potential to reduce • cycle times • claims costs Future Model?

25. Information and Information Technology Jobs/Skills/ Structure Business Processes Values and Beliefs Management Systems What does this mean for the way we currently work? • Instant messaging • Blogs • Wikis • Mash-ups etc • Job role definitions that encourage more collaborative working • Use of IT ‘social networking’ IT skills in the workplace • A collaborative way of working • Customer centric operating model • Clear performance measures and monitoring • Integrated employee reward and incentives • Redefine processes to reduce cycle times • Embed the use of social networking software into processes Need to transform current operating models

26. Conclusions and Summary

27. Conclusions • Collaboration • Social network software • Procurement centric models • Customer service • On-line claims enquiry and tracking • Self servicing claims • Cycle times

28. Summary – Workshop objectives • To explore the effectiveness of the supply chain • Why is it not effective as it could be – what are the market drivers? • Is it fragmented and if so what are the consequences? • What are the key challenges that everyone is facing? • What are the potential solutions we should be looking at to improve effectiveness and reduce fragmentation? • How can we reduce overall claims costs • How can we improve customer service? Thank You

29. End