Investor Day 2012 - Insurance Underwriting and Claims

Investor Day 2012

Ageas UK

-

Insurance Underwriting

& Claims

Mark Cliff

MD Ageas Insurance

Limited

INVESTOR DAY 2012

Profile

Underwriting excellence

Claims excellence

Conclusions

Underwriting Claims

Profile

Technical excellence

Data

Anti-fraud management

Process excellence = low

cost, high service

Supply chain management

Anti-fraud management

Investor Day 24-25 September 2012 | Andaz Liverpool Street London 2

7

16

25

28

31

61

76

84

91

138

HDI Haftpflicht

Groupama

ACE

AIG

BUPA

Ageas

Munich RE

Royal Bank Scot

Aviva plc

AXA

Source: Datamonitor

Profile Key market positions

Household Private Motor

Travel


GWP in £ mio

163

195

281

283

395

494

565

837

963

967

Co-operative

Nat Farmers

Zurich Fin Serv

Legal&General

Ageas

AXA

RSA Ins Grp

Aviva plc

Lloyds Banking Grp

Royal Bank Scot

300

413

457

517

616

1,028

1,034

1,218

1,627

1,729

Zurich Fin Serv

esure Hldgs

Co-operative

RSA

AXA

Ageas

Liverpool Vic FS

Aviva

RBS

Admiral

GWP in £ mio

GWP in £ mio

Profile


Claims excellence

Conclusions

Underwriting excellence Sustained improvement resulting from corrective measures

Following Motor market issues

in 2009 & extreme weather in

2010, we are now on an

improving trend.

Combined ratio 2008 – 6M 12

73.1% 80.4% 81.5% 74.6% 73.0%

29.5%27.7% 28.0%

25.3% 25.8%

102.6%108.1% 109.5%

99.9% 98.8%

2008 2009 2010 2011 6M 12

claims ratio expense ratio


Underwriting excellence Sustained improvement

Technical Excellence

Strong technical discipline

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

Data

Revamp of Motor & Household rating

structures

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


Benchmarking of Individual InsurersTotal Market Overview 2011

Source: Deloitte Analytics based on AM Best data

Gro

ss M

arke

t Sh

are

20

11

(%)

Net Combined Ratio (%)

PrudentialChubb

EcclesiasticalTravelersUSAABrit

MMA TradexAIOISabre

GroupamaProvident

Highway

esureCISAllianz

NFU Mutual

Liverpool VictoriaAXA Insurance UK

RSA

UKI

4.6%

106.1%

0

2

4

6

8

10

12

14

8090100110120130140

Overall Ageas (TU and Ageas combined)

AvivaInsurance

The largest insurer with a

COR below 100%

Outperforming vast

majority the market

Underwriting excellence Motor performance better than market norms

Benchmarking of Individual Insurance

Net combined ratio 2011 (%)

Gro

ss m

ark

et sh

are

20

11

(%

)


Profile


Claims excellence

Conclusions

Claims excellence Sustained improvement

Process Excellence

The Ageas Way

Processes designed to deal with

customers predicament

Handled by employee closest to

customer

No call boards/IVR/offshoring

As much dealt with in 1 call

Efficient processes = low cost = high

service

Supply Chain Management

Innovative/quicker settlement

Identify new and upcoming providers or

independents

Solution Centres – working closely with

small but more innovative repairers

Have our own overseas Assistance

Service

Anti-Fraud management

Every call handler trained to spot fraud

Care flag system

Supplemented by investigation team


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

Claims excellence Solution Centre Concept


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


http://www.insuranceage.co.uk/insurance-age/news/2205939/sentiment-survey-launches-for-brokers

Source: FSA 2010 returns and Ageas internal analysis

Figures concern Ageas Insurance Limited

Ageas almost half that of UK

Market average

Claims excellence Low cost: Operate at lowest level of cost

Incurred claims handling expense /net incurred claims Estimated Unit Cost Production (Private Motor 2011

Household claims mgmt costs / net incurred claims

One of the most efficient for claims

operations

Lowest unit costs of production in Motor


7.4%

4.0%

4.8%

4.8%

5.4%

5.6%

6.2%

6.2%

8.0%

8.9% 11.5%

UK Market

AXA

LV= / Highway

Co-Op

Ageas

NFU

esure

RSA

Aviva / Gresham

Allianz

Direct Line

63.1

17.8

40.2

41.9

43.3

44.4

45.7

47.0

51.4

53.4

56.2

57.1

61.4

76.7

82.5

91.1

UK Non-Life…

Ageas

AXA

NFU

Sabre

Groupama

Aviva

RSA

Highway

Tesco…

esure

Tradex

LV=

Co-Operative

Allianz

RBSI

9.0%

4.3%

4.6%

5.4%

5.9%

6.6%

9.3%

9.7%

10.1%

10.8%

11.2%

UK Market

Co-Op

Ageas

LV= / Highway

L&G

NFU

RSA

Allianz

Lloyds TSB / St Andrews

Aviva / Gresham

Direct Line

Profile


Claims excellence

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

Conclusions


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 Relations

Investor Day 2012 - Insurance Underwriting and Claims