At the end of this event delegates will be able to: Describe the - - PowerPoint PPT Presentation

Next steps in tackling the compensation culture

Tuesday 8th September 2015

At the end of this event delegates will be able to:

• Describe the impact the civil justice system reforms have had and

how effective they have been for the insurance industry

• Understand why the industry is experiencing increases in the

number and cost of personal injury claims despite the industry passing on savings of nearly £1billion to consumers

• Explain what further reforms are required to help tackle the UK’s

compensation culture

Welcome & introduction

James Dalton Director, General Insurance Policy Association of British Insurers

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Address One

Andy Watson Chief Executive Officer Ageas UK & Chair of ABI’s Motor Committee

Next steps in tackling the compensation culture Andy Watson, CEO, Ageas UK

@AgeasUK

@AgeasUK

For the last two and a half years motor premium prices have been falling. That trend is now

• ending. Premiums

have started to rise again.

320 330 340 350 360 370 380 390 400 410 420 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015

Average Comp Premium (£)

Where are we at the moment?

Claims levels are back up to their pre- LASPO level. Insurers have stopped aggressively dropping prices Where are we at the moment?

640 660 680 700 720 740 760 780 800 820 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

• No. of claims (motor cars) (000s)

@AgeasUK

“I am confident the insurance sector can absorb the insurance premium tax changes, not least because I have cut the corporation tax and we have made other changes to the way insurance is levied and the way that, for example, accidents in motor insurance are properly accounted for, that are actually putting a downward pressure on premiums.” Chancellor of the Exchequer, George Osborne MP 21st July 2015

@AgeasUK

MedCo CMCs Fraud Some action is being taken... ...But not enough

@AgeasUK

This investigation should have taken costs out of the motor claims value chain... A missed opportunity? With unintended consequences?

@AgeasUK

• Customers are time poor and reliant on technology to meet needs:
• Price comparison websites dominate Motor
• Smartphone and tablet penetration – websites, apps, email, web chat, social media, etc
• Mobile transactions
• Payment is becoming integrated with social apps

Technology, flexibility, mobility and choice are becoming more and more important for customers

@AgeasUK

Personalised service is winning consumer trust

“I quite like the fact that companies like Amazon and John Lewis – once you’ve

• rdered something - they know who you

are and they can tailor the experience to you” “Amazon knows everything about me – what I like, what I read, what I buy – but I trust them” “I’ve used live chat with Amazon – they have the best customer service I’ve ever seen - they use live chat as a gateway, you talk to them first and determine what the problem is, then they solve it in a variety of different ways – they might solve it there and then, or get someone to call you when it’s convenient, or they might get someone to help you by email”

Amazon recognises its customers and uses that to tailor the experience around them

Source: Harris Interactive – Feb 2015

@AgeasUK

Source: Future Foundation - Feb 2015, SMMT Conference - March 2015

2017

2020

Mid 2010s

By 2030, connected and autonomous vehicles could save

• ver 2,500 lives and

prevent more than 25,000 serious accidents in the UK.

‘Highly automated’ cars are almost here. Driverless cars are closer than you think...

UK driverless car trials took place in January 2015 34% British consumers interested in a self-drive car Autonomous vehicles to make up 75% of cars

• n the road by 2040

The insurance industry needs to get its act together

@AgeasUK

Aggregator CMC Legal advisors Claims suppliers Broker/ Retailer Insurer Third party insurer Insurance industry Insurance companies Aggregators CMCs Legal advisors Claims suppliers Brokers/ Retailers Insurance companies Third party insurers

Consumers do not differentiate between industry groupings

@AgeasUK

A unified approach to regain trust and respect Innovation

• Know the customer
• Know how to use data
• Simple processes
• Speed of resolution
• Engage through new channels
• Personalised service

Always have the customer at the heart.

How do we ‘make it right’?

• Reduce audit
• Focus on quality

management and removing duplication and overlap of effort

@AgeasUK

Limitation periods Recoverable costs General damages levels

18

What can we do to tackle compensation culture? But most importantly: BEHAVIOURS

@AgeasUK

Thank you Andy Watson, CEO, Ageas UK

@AgeasUK

Address Two

Susan Brown Director, Pro Legal Chairman, Motor Accident Solicitors Society

Address Three

Craig Dickson Chief Executive, Claims Solutions Group DAC Beachcroft

Panel Discussion

Chair: James Dalton, Director, General Insurance Policy Association of British Insurers Panel: Andy Watson, Chief Executive Officer Ageas UK & Chair of ABI’s Motor Committee Susan Brown, Director, Pro Legal and Chairman, Motor Accident Solicitors Society Craig Dickson, Chief Executive, Claims Solutions Group, DAC Beachcroft Richard Mason, Deputy Director for Civil Justice, Ministry of Justice Lorraine Rogerson, Independent Chair, MedCo Registration Solutions

Concluding remarks

James Dalton Director, General Insurance Policy Association of British Insurers