Review

How we appeal to our clients

We believe that there are a number of common attributes that are critical in our service proposition for many classes of insurance written within the Group. With much of the insurance written being large and complex in nature, financial strength, experience of our teams and access to decision makers are differentiating factors for many of our clients.

The increased focus on client service across the market has led several of our brokers to institute insurer service measures, such as the Willis Quality Index. In response, Amlin has engaged with brokers to share and compare data. These discussions have proved invaluable in identifying exactly where processes can be improved and in helping gain traction for implementing new technology.

We have continued to work hard during 2007 to improve the operational performance of our service to ensure that we become easier for our clients to deal with. During the year, we also strengthened relationships with our key brokers by instituting formal reviews of the main elements of the underwriting placement and claims process with our key brokers.

Case study – Claims service makes the difference
Case study – Innovation brings rewards for our clients

Financial strength

Strong financial strength ratings are important to all counterparties, but particularly in the area of reinsurance. In October 2007 AM Best upgraded both Syndicate 2001 and Amlin Bermuda to A+ (Superior) and A (Excellent) respectively. These upgrades, together with our existing strong ratings from Moody’s and Standard & Poor’s, mean that our clients can be confident in our ability to manage their risks and pay their claims.

The capital base, including regulatory debt capital, of the Group is in excess of £1 billion. We have shown our ability to access capital in order to provide capacity to our clients in times of insurance market crisis; for example with the set up of Amlin Bermuda in November 2005. Importantly, our risk management practices have ensured that in these times of crisis our balance sheet strength has not been materially eroded and we have been able to provide a consistent strong financial performance. This underpins the security offered to our policyholders.

Experience and leadership

Specialist insurance requires a depth of knowledge which is borne of years of experience. Hence, as explained in the people section of this review, the experience of our teams is a key performance indicator for the Group.

Amlin continues to lead a significant proportion of the risks that we underwrite in the London market, which gives us primary control of the quality and speed of the placement and claims service we provide to brokers and to their clients.

Underwriting access

Underwriting access and speed of decision making are two criteria which regularly feature in London market surveys. Direct broker feedback indicates that Amlin provides good access to underwriters, who are empowered to underwrite. All underwriters have authority to bind risks, within agreed limits, without the need to refer to an underwriting committee. Our wordings specialists work within the underwriting teams to provide flexibility and a fast response on placement and endorsements.

Given the focus that Amlin places on underwriter service, we were pleased that Syndicate 2001 won “Underwriter of the Year 2007” at the Insurance Day London Market Awards. This award is given in recognition of the strength and expertise of both underwriting and management and is particularly satisfying given that we were nominated by our market peers.

Policy issuance

The quality of wordings and speed of policy issuance had historically been poor across the London market, leading to the FSA demanding significant and rapid improvement in this area in December 2004. The FSA’s challenge to the market was to achieve a position of full “contract certainty”, defined as the complete and final agreement of all terms between the insured and insurer before inception of the risk.

Amlin tracks each stage of the underwriting and claims processes using workflow systems, but we have targets for contract certainty which contribute to the speed of contract documentation. Our 2007 objective was to move contract certainty from its 2006 project status to business as usual. Our operational statistics show we have successfully achieved this.

The client service proposition for our UK commercial and service company clients is different. Since we underwrite 100% of these risks and issue our own policies, there is no reliance on external third parties in getting contracts agreed or issued. We issue quotes or renewal offers at least three weeks before the expiry of the policy, which sets out our terms so we are normally contract certain before inception.

Peer to peer processing

In 2007 we have made further progress with developing peer to peer electronic messaging capability as a way of streamlining the risk placement process. Benefits arising out of this change include savings in time and expense for brokers and underwriters and an improved audit trail of information passed before the underwriting of a policy. Working originally as part of the G6 market reform group and now, on a bilateral basis with each broker, we are ensuring that our systems are compatible in order to improve speed and accuracy of service to our mutual clients. While we have developed our capability in this area, we have been disappointed by the level of take up among brokers to the streamlining offered by peer to peer processing. Nevertheless, in the recent January renewal season Aon placed a significant percentage of its reinsurance risks, using RI3K, an electronic hub with which we have electronic connectivity.

Claims service

As the lead manager of 47% of the London market business we wrote in 2007, Amlin also takes lead responsibility for a high volume of claims. Amlin is committed to efficient and timely claims management and we constantly seek improvements to our claims handling models to ensure that our brokers and clients receive a focused and competitive service.

Despite a 5% increase in volumes over 2006, the average claims file turnaround time (from initial notification to agreement with the broker) has improved from 4.1 working days in 2006 to 3.4 working days in 2007. We do not control the claims process from start to finish, being dependent on brokers and market shared services for some elements. We therefore view the speed of our claims turnaround as the key measure of Amlin’s claims service.

There remains huge scope for further improving the claims service by changing market practices and enhancing the quality and timeliness of shared services. We are pushing Lloyd’s and others hard to move on this area.

Historically, London market claims have been managed by brokers and underwriters using paper files and manual agreements. Clearly with technology advances in recent years this was a sub-optimal process. The London market has targeted a move to the use of electronic claims files (ECF) to improve this situation, making use of a central market claims repository.

During 2007 we have continued our move to ECF technology, piloted in 2006 and which links to our bespoke claims workflow system implemented in 2005. The move from paper-based to electronic processing reduces the total time taken from initial advice to final settlement and brokers are able to reduce costs. It also facilitates greater sharing of information with other participant underwriters where Amlin is the lead underwriter on a risk and vice versa.

Our 2007 objective was to handle electronically 75% of new claims within a targeted range of business classes and we achieved 94%. Amlin has been heavily involved in the drive to handle claims electronically within the London market and in 2008 we are accepting this same business 100% electronically.

In 2007 we participated in the second Claims Performance Study conducted by Gracechurch Consulting, which tracked service performance against the first study undertaken in 2005. Once again, 100 brokers were interviewed, 85 of whom were specialist claims brokers and 15 of whom were placing brokers who deal directly with the claims functions of London market insurers.

The survey indicated that claims service has increased in importance since 2005. 61% of respondents now formally monitor claims performance (2005: 47%), with 48% rating it as very influential in their decision on where to place business (2005: 39%). Amlin’s claims service was ranked second overall for the 25 Lloyd’s and London market insurers participating in the survey and was highly rated in relation to the quality of our third party claims specialists. Whilst we broadly tracked the market average on each service criteria, we have identified areas for improvement, notably the lower than average score for our commitment to paying fair claims, as we seek to regain the market leader status we attained in 2005.

The majority of claims on our UK business are handled in-house from initial notification to issuing the settlement cheques. We use a 24-hour help line service run by a third party to take initial calls on motor claims and to deal with the immediate issues, but thereafter each case is managed internally. We maintain the case files, monitor the workflow on each claim and focus on keeping the client informed of progress.

© Copyright Amlin 2007