Strategic Decision Making for the Claims Handling Function

“Strategic Decision Making for the Claims Handling Function” ALARM Seminar, London 24 th January 2007 Mark Hudman Claims Executive Leader, Marsh Ltd Tel: 029 20431127 (office) Tel: 07787 565346 (mobile) Email: Mark. Hudman@marsh. com

Mark Hudman’s Background n Customer Service/Managerial Positions – Retail and South Wales Electricity n Claims Manager – South Wales Electricity n Group Claims Manager – Hyder Plc n Claims Executive – Marsh Ltd n Claims Executive Leader – Marsh Ltd Marsh 2

Claims Handling Options n Outsource n In-house n Part outsource/part in-house n Outsource/mutual n In-house/mutual Marsh 3

Key Strategic Decisions In-house v Outsource n n Cost – Total cost of handling team (including overheads), claims settlements and hidden costs Management control Recruiting the right people or selecting the best Third Party Administrator Customer service Marsh 4

Key Strategic Decisions In-house v Outsource (cont) n Management information – data capture and transfer n Claims handling charter n Claims protocols – authority levels n S. L. A’s/Tenders/Contracts n Claims review meetings/audits Marsh 5

Claims Handling Services Liability & quantum tools ( See page 8&9) Identify Number of Claims Handlers Claims Section Structure Good Balance Recruitment - Referrals - Adverts - Agencies T. P. A. selection & SLA’s (see page 7) Pre-launch Manage Run Off Claims Insurer Protocols/Authority Levels Marsh Claims Handling Charter “Smart & Efficient” “Fair but Firm” M. I. Bespoke Claims Handling System ------------STARS - LACHS Training Initial & Ongoing Claims Handling Protocols 6

Claims Handling Services Early intervention/ rehabilitation/ return to work services Auditing Internal & External Fraudline SLA’s Barristers/ Counsel T. P. A. Selection & Appointments Legal Cost Assessors On site Claims Investigation/ Surveillance Marsh Loss Adjusters/ Claims Consultancy Services Solicitors “Work Overflow” Claims Handling Services 7

Claims Handling Services Pre-Action Protocols Claims Handling Charter D. W. P. C. R. U. Registration Marsh Pre-Action Discovery (beware of costs) “Liability & Quantum Issues” “Claims Handling Tools” “C. P. R. Compliance” Fraudulent Claims Identification Pre-Action Request for Personal Records - HR Dept Defend Claims Whenever Possible “Claims Defensibility Review/Audit” 8

Claims Handling Services Success Fees ATE Insurance Premiums Successful Defence Own Costs Recoverability Cost Control Early Identification of Liability & Settlement Where appropriate T. P. Cost Control Negotiation “Liability & Quantum Issues” “Claims Handling Tools” “C. P. R. Compliance” Claims Payments Fund (ESCROW) Marsh Aggregate Stop Loss Indicators Quantum Kemp & Kemp Judicial Studies Guide On-Line Sites NHS Trust Costs Motor/EL/PL 9

SLA/KPI’s n Acknowledgement Letters n Pre-action protocol compliance n Decision on liability n Time to settle n Cost of damages n TP & own claims handling/legal costs n File reviews n Authority levels Marsh 10

SLA/KPI’s (cont) n Reserving philosophy n File closure policy n n Appointment of nominated Solicitors and Adjusters Appointment of appropriate Barristers & other experts Marsh 11

Make Best Use of Audits n What type of audit – reserve, systems or performance n Pre-renewal n Pre-funding report n Pre-claims handling tender n Mid term n System/performance n Damages v costs – TP and defence Marsh 12

General Considerations n n n What do you want to achieve How well does the claims handling function work at present Appetite for risk retention – what level Closer claims management control or deal with at arms length Claims process re-engineering project Marsh 13

MMC Claims Services & Solutions n n Reclaim - Full "cradle to grave" claims handling/management services for our clients. Claims Consultancy - experts in project managing incidents for our clients who have sustained a major, complex or contentious loss whether it be through fire, theft, vandalism, flooding, fraud or indeed any other cause. Marsh 14

MMC Claims Services & Solutions (cont) n n Employers or Public Liability Claims Defensibility Review - very beneficial for clients who have to accept liability and settle claims due to inadequate Risk Assessment, Health & Safety, training records, document retention procedures and/or implementation. Insurers & Supplier Technical Claims Audits useful exercise for the service and broking teams to ensure client's claim reserves are reasonably stated and/or old files closed prior to renewal negotiation or T. P. A. selection. Marsh 15

MMC Claims Services & Solutions (cont) n n Accident Management Service Reviews ensuring our clients have the most appropriate Accident Management and Uninsured Loss Recovery service provisions in place to minimise total cost of accidents and maximise their uninsured loss recoveries. Insurance Archaeology Services - a service that can be arranged through your Claims Executive with In. Solutions, when our clients/prospects are unable to trace previous insurers. Marsh 16

MMC Claims Services & Solutions (cont) n n Claims Analysis - capture and collation of as much historical claims data as possible to present a comprehensive claims report identifying clients' major risks and trends to help with their risk management programmes/initiatives. Claims Process Pre-engineering - primarily for clients/prospects with large deductibles-set up claims handling procedures, training and provide claims management support to clients/prospects internal/external claims management functions. Marsh 17

MMC Claims Services & Solutions (cont) n n Claims Programme Management - Implementing and maintaining agreed service standards; Claims Executives personally attending claims meetings and ensuring co-ordinated service delivery of Marsh specialists and other parties. National Claims Team - Claims Advisory & Technical Support Services - There is a wealth of experience in the National Claims Team to deal with our clients' claims whether of a general, technical or coverage dispute nature. Marsh 18

Conclusion n For more details Contact Mark Hudman Claims Executive Leader, Marsh Ltd Tel: 029 20431127 (office) Tel: 07787 565346 (mobile) Email: Mark. Hudman@marsh. com Marsh 19