Settlement of motor claims electronic assessment systems ensure
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Settlement of motor claims electronic assessment systems ensure profitability of motor insurance (best practise examples from Germany, Belgium and Poland) Dr. Richard J. Nathschlaeger Tashkent, April 2010 Global Innovation - Local Focus
Agenda • Audatex – a global company with a strong focus on Central & Eastern Europe (CEE) and Asia • Effective management of claims processes • Best practise examples – Germany, Belgium, Poland • Conclusions
• • 01 A Global Company with a strong focus on Central & Eastern Europe (CEE) and Asia
The World of Audatex Solera San Ramon , CA Argentina, Austria, Australia, Belarus, Belgium, Bosnia, Brazil, Bulgaria, Canada, Chile, China, Colombia, Costa Rica, Croatia, Czech Republic, Denmark, Dominican Republic, Ecuador, El Salvador, Estonia, France, Germany, Greece, Guatemala, Honduras, Hungary, India, Israel, Japan, Latvia, Lebanon, Lithuania, Mexico, Netherlands, Nicaragua, Panama, Portugal, Romania, Russia, Serbia-Montenegro, Slovakia, Slovenia, South Africa, Spain, Switzerland, Turkey, Ukraine, United Kingdom, United States, Venezuela
Central and Eastern Europe (CEE) in the Audatex World Audatex North-America SAN DIEGO, CA AX - America AXIbero-America Audatex UISA SAO PAOLO, BRREADING, UK Audatex GAS MINDEN, GERMANY ABZ ZEIST, NETHERLANDS Audatex BEFIG BRUSSELS, BELGIUM Audatex CEE Audatex-APAC VIENNA, AUSTRIA TOKYO, JAPAN Solera SAN DIEGO, CA 5
Audatex is the only global provider of claims management solutions • Revenue: 600 Mio. $ • Global Network of over 100. 000 users • 2. 100 employees in 54 countries • Brand “Audatex” now also used in North America • Over $60 million annually in product development – more than twice our leading competitor • Nearly $30 million annually in database development – four times our leading competitor
Countries in CEE
Audatex – CEE in 2010 AT- 1969 CZ-1994 HU-1994 PL-1997 RU-2003 UA-2004 SK-2004 RO-2005 TR-2008 LT-2009 LV EE HR BA MD Sl RS BY
Local Focus : Central and Eastern Europe Region Opportunity: Action: Market Development New Audatex CEE Region • High economic growth region • Demand for electronic workflow partner • New Customer quality expectations • Meet and exceed customers high expectations • Respond and capture dynamic market developments • Underline global knowledge, local focus AX-CEE: Facts & Figures • HQ in Vienna, • 100 employees in the region • Product development center in Poland Voice of our customer • Big 5 insurers go CEE • Allianz, AXA, Generali, Uniqa, VIG • Manufacturer’s go CEE • VW, Dacia-Renault, Kia, Hyundai, Peugeot
Audatex-CEE Region Introduction • Audatex in CEE consists of: • 10 local country organizations • AT, Baltics, PL, CZ, SK, HU, RO, RU, TR and UA • 9 countries are supported out of the established country organisations: • 5 Balkan countries (Slovenia, Serbia, Croatia, Bosnia, Bulgaria) from CEE-Headquarter - Austria • Belarus and Moldavia from Ukraine • Kazakhstan and Uzbekistan from Russia
Audatex-CEE Strategy • Audatex CEE will continuously reinforce its position as world class estimatics services provider, • Audatex CEE will continue to build up its standing as a premier claims services provider along the entire claims value chain, delivering on precise value propositions and improving inefficient, mostly paper based workflows, • Audatex CEE will strive to become the trusted partner of all our regional customers for identifying business improvement opportunities and realizing them jointly with flexible online-offline solutions.
Future Countries in CEE • CEE offers still a lot of opportunities for expansion • Audatex-CEE will follow its customers • Database can easily be localized
• 02 Effective management of claims processes
Largest part of premiums written goes to claims handling activities Product development & Risk management 5% + 10 -15% Sales + Network development 5 -10% + Claims handling 10 -15% + Health indemnification 0 -30% + Repair 30 -70%
Repair value control - example Ukraine in 2009 • 30% use professional tools • 15% use less professional tools • 55% use “best guess” principle
Repair value control improvement • Completely exclude “best guess” principle • Use professional tools • Sign only professional body shops for partnership • They have knowledge & know-how • Exclude fraud • Control everything, even the smallest claims!!!!
Three steps to reduce claims costs effectively 1. Encourage market to use one “calculator” for estimation of damage amount • • • 40 years of history 85 manufacturers Customized for 52 countries 2. Connect all users with offline/online solution – which is currently: • • • Central database and case management Сommunication between partners Additional documents handling (pictures, invoices etc. ) 3. Connect all users with online solution – which will provide with: • • Profound and logical system of case and partners management Claims history based on global market data – possibility to prevent fraud Advantageous statistics possibilities – may be used in underwriting
• 03 Best practise examples • Comparative Market Overview – Germany, Belgium, Poland – Market dynamics – Basic motor claims data • Challenges and opportunities – Based on the market evolution insurers face different challenges – How to make the claims process faster, better, cheaper • Conclusions
1 2 3 4 Motor Claims Handling in Germany Motor Claims Handling in Belgium Motor Claims Handling in Poland Conclusions 19
Germany - strong manufacturers’ position, independent assessors and market consolidation Key Forces @ work Manufacturers acting as bodyshop operator and dealers Insurance carriers trying to reduce claims costs Manufacturers are a channel for insurance policy distribution Market consolidation reducing number of bodyshops and assessors Manufactures trying to prevent margin erosion for after sales German Market Strong position of independent assessor organisations 20
German Market Source: Audatex 21
Insurers face constant pressure to improve service at a lower cost Several steps have been taken by the market participants to increase efficiency • Reduce severity: – Standardized electronic estimate is required for every claim – Implement the research results of AZT for painting and repair – Increase the accuracy of the estimate through VIN vehicle identification • Automate and rationalize the communication – Between assessors and insurers – Between repairers and insurers – Involving all other parties – towing and rental companies • Waste and fraud reduction – Automatic SLA management – Automatic dispatching and review via Claims Filters – Electronic handling of paperwork, photos, etc. 22
1 2 3 4 Motor Claims Handling in Germany Motor Claims Handling in Belgium Motor Claims Handling in Poland Conclusions 23
Belgian Market Car Parc Insurers • 34 Insurance companies Assessors • 265 Assessors – 199 independent – 66 affiliated with insurance companies • • Claims • 2909 Repairers – 1791 brand tied – repair only specific brands – 1118 no brand 650, 000 Claims per year – 56, 575 total losses – 1. 12 million Audatex calculations Repair Shops • 4, 929, 284 cars 523, 161 vans 152, 505 trucks 355, 933 motor bikes • Some of the lower repair averages in Western Europe Wreck Buyers • 497 Wreck buyers Importers • All claims are estimated and handled through the Audatex platform 30 Importers Source: Audatex 24
The Audatex platform enables fully electronic and flexible process for everyone Insurers Experts Repair Shops Audatex Platform Total loss buyers Importers WAN 25
Prerequisites for the Belgian model • Full cooperation among the insurers – All have implemented the World Audatex Number – WAN allows the process to start with any of the partners – WAN facilitates the settlement on TPL claims – All vehicles are identified through VIN • Single independent provider of claim services – – Audatex does not take sides Constant innovation together with all partners All big partners sit on the Technology Advisory Board Independent monitoring of partner performance – Non-compliant partners are excluded from the hub • Rules based automation of the workflow – Automatic approval based on claim size and complexity – Intelligent routing of jobs (to assessors and shops) 26
1 2 3 4 Motor Claims Handling in Germany Motor Claims Handling in Belgium Motor Claims Handling in Poland Conclusions 27
Poland – a market in transition • PZU today controls 40% of the motor insurance market • Direct insurers are opening up and growing fast • Heavy competition has translated into a price war • Insurers are focusing on closer cooperation with their partners to create competitive advantages and ensure higher satisfaction for the policy holders: – – Reduce the number of non standard manual estimates Move toward automated workflow with the repairers, assessors Optimization of the internal workflow through removing redundant processes Developing incentives for selected partners 28
Poland - Market Statistics - Rapidly growing car parc Average Claim Amount (USD) 2, 144 - Decline in severity in 2005/6 due to large influx of old cars from EU Source: Audatex 29
Poland - typical “old” mistakes • Internal mobile assessors were sent to inspect every claim • Only 30% or less of repairable claims go to Preferred Repair Networks (PRN) – No control over the non PRN repairs – 70% of non PRN claims took up to 10 times more time to settle • Shops were forced to lower labor rates – High attrition among PRN shops – Authorized shops avoid PRN contracts – No way to verify the compliance of the rates used to the contractual ones – Questionable quality of repair => negative impact on customer • 50% of claims were paid out without proof of repair – High levels of fraud – same damage claimed at several insurers • Large number of manual estimates 30
Poland - Recent Improvements • Reduced work for the insurer – – Estimates are required in standardized and mostly electronic form Reduced number of process steps Internal assessors focus on “real” challenges Opportunity to automate process steps through software tools • Ability to “sell” the PRN from the beginning – – Learn about the claim as soon as possible Drive more work to the shops Involve shops (PRN) from the early stage to reduce rework Control labor costs in the estimate • Increase the % of controlled repair to control fraud • Apply policy to control non PRN repairs 31
1 2 3 4 Motor Claims Handling in Germany Motor Claims Handling in Belgium Motor Claims Handling in Poland Conclusions 32
Best practices summary – faster, better, cheaper claims management • Standardize the process – deviations create waste – Use standardized electronic estimating tools (Audatex is customized and operating in 18 countries in CEE) – Analysis shows savings potential of a minimum of 8% to 10% of the total repair cost • Involve all relevant parties in a structured electronic way – Create PRN’s if market dynamics allow • Steer the claim to the PRN to get best service at lowest cost – Drive more work to trusted shops – Involve shops (PRN) from the early stage to reduce rework 33
Best practices summary – faster, better, cheaper claims management • Employ tools to reduce severity – Manage fraud by reviewing every estimate in an automated way – Electronically control all SLA’s • Increase accuracy of planning - Reserve assignment, reinsurance, statistics Ø Improve customer satisfaction at lower cost ! 34
Thank you !
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