Supply & Procurement
Chairman: Iain MacLean, Director : Subsidence and Surveying Services at Davies Group
There was a lower attendance than normal but, as usual, a lively debate ensued.
The key elements of the discussions related to the purpose of the document, who it should be targeted at and what we realistically hope to achieve by its publication.
It was concluded that the purpose of the proposed document is not so much about the direct management of subsidence claims but rather how an Insurer`s management of their suppliers of subsidence claims
handling services can positively impact on the handling of subsidence claims for all parties.
It was agreed that following the meeting I would co-ordinate the responses received from Task Group members with a view to distributing a single document covering all the input received.
The deadline for input from Task Group members, or indeed anyone else who wishes to contribute, is Friday 30th April.
I will then distribute the single document in early May and Task Group members will then expand on this document as they consider appropriate with a view to providing this feedback to me by no later than Monday 31st May.
I will then co-ordinate this feedback into a single document for detailed discussion at the next Task Group meeting in mid-June.
This may seem a slightly drawn-out process but we consider it critical to the validity of the document that we cover the full spectrum of opinion and perceptions in the market place.
1)
Introduction
- Reference to different insurers being set up in different ways and thereby the interests of claims management and supplier management can vary notwithstanding a common mission statement
-Reference to Successful Procurement
Subsidence isn’t like replacing a telly, for the customer its the ongoing management of the process of the claim that is important
Why is the procurement process so complicated?
Need for consistent customer experience
Strive for continuous improvement in Quality, Price and Service
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What outcome is being sought
- Customer satisfaction
- Colleague satisfaction
- Brand reputation
- Claim spend reduction
- Operating cost reduction
Operating performance
Operating performance management control awareness
Effective and Transparent process
Improve process and supply chain management
-
What is the current reality
- Suppliers spending a fortune on relationship management
- Claims not happy with the services provided
- Feedback mechanisms ineffective
- Customers dissatisfied with contractor services
- Contractors dissatisfied with insurer payments
- Claims managers dissatisfied with claims durations and complaints ratios
- Claims managers not in harmony with supplier managers
Each insurer assumes market leading contract deals
Unrealistic and too many KPI’s/ SLA’s
Procurement staff do not understand the process
Fees cut to the bone, does not aid the process.
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What are the benefits of a better managed process
- Enhanced Customer service
- Enhanced colleague satisfaction
- Enhanced profitability for contractors
- Reduced overall spend and leakage
- Brand reputation
Enhanced trust
Reduced costs
Improved Service
Compliance
Successful Claims Handling
-
How can these benefits be achieved
- Am I allowed to suggest a post, rope, optional blindfold, and a rifle?
- Alas, it needs driving from the top, and thus the message of this paper needs to Exec punchy
- Highlighting the leakage that occurs time, spend and operating cost, not to mention customer satisfaction and brand reputation
Providing Execs with the information to challenge their own businesses
Ensure continuity of the procurement /supplier relationship
Minimise processing delay.
Understand whole process not just a small section.
Realistic KPI’s/SLA’s
Better payment terms
Limit number of suppliers
Summary
Improve supply chain management
Communication very important
Share goals for success
All parties buy into procurement process
Provide quality, price and service within the procurement process
Strive to refine and improve the overall process
2)
Chapter1
Introduction /objective of this document
- To provide insights into ways that the management of a supplier may drive improvements in the subsidence claim process.
- Reference to different insurers being set up in different ways and thereby the interests of claims management and supplier management can vary notwithstanding a common mission statement
-Also reference to different suppliers having different procedures but that subs claims have common key stages. Depending on how “hands on” the insurer wants to be they should decide which of the key stages they wish to measure and how to measure their supplier’s performance. Simply measuring the speed of response/issue of information will not necessarily drive the desired outcomes - after a fire there is great importance in the speed of the repair process. There will be no risk of implications on claim duration and repair method/cost because the fire was misdiagnosed and it was really a flood! With Subsidence, speed and efficiency is not irrelevant of course but there is far greater risk involved if the diagnosis is wrong or inadequately proved (that may, for example result from a desire to cut the time and cost of the investigation). This can impact on mitigation which is a vital stage in a subsidence claim but essentially non existent with other perils. The exception is perhaps search and trace issues on escape of water/oil claims but such issues are more easily identified and managed. With Subsidence claims problems with diagnosis and the impact this can have on mitigation and consequently the whole claim is far more difficult to identify and control but this must not be allowed to be a reason to ignor the problem in favour of matters that are easier to measure but have little impact on the whole process.
- Reference to Successful Procurement
- Subsidence isn’t like replacing a telly (or dealing with any other building peril - see my example above), for the customer its the ongoing management of the process of the claim that is important
-
Chapter 2
What outcome is being sought?
To achieve the objectives of this document it is considered important to show the potential for improvements in the following areas
- Customer satisfaction
- Colleague satisfaction
- Brand reputation
- Claim spend reduction
- Operating cost reduction
- Operating performance
- Operating performance management control awareness
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Chapter 3
What is the current reality?
To identify the possible routes to improve the process we first need to consider where we are and the current perception of the problems (Iain - clearly it will be necessary to flesh out and perhaps provide examples to support the following assertions)
- Suppliers spending a fortune on relationship management
- Claims not happy with the services provided
- Feedback mechanisms ineffective
- Customers dissatisfied with contractor services
- Contractors dissatisfied with insurer payments
- Claims managers dissatisfied with claims durations and complaints ratios
- Claims managers not in harmony with supplier managers
- Each insurer assumes market leading contract deals
-
What are the benefits of a better managed process (Iain - I wonder if the “what are the benefits…” section is superfluous as it is effectively the same as the “outcome section”)
- Enhanced Customer service
- Enhanced colleague satisfaction
- Enhanced profitability for contractors
- Reduced overall spend and leakage
- Brand reputation
- Enhanced trust
-
Chapter 4
How can the desired outcomes be achieved via the process of management of the subsidence supplier?
Training of persons that accept calls from customers when they register a claim to ensure it is routed correctly (savings on paying wrong suppliers / investigations)
Reduce the amount of suppliers that are involved (better discounts can be achieved if being directed by one)
Produce realistic KPI’s / SLA’s (this is a vitally important point in my mind - we need to advise what KPI’s and SLA’s we believe will drive a “better” claim)
Better payment terms for suppliers (better discounts can be achieved)
Drivers of total cost understood and tracked (this point is linked to my observation above - we need to advise what we believe the drivers to be and why)