Insurance Services
We understand insurance We have deep insight into the challenges and opportunities facing the Insurance industry and experience of delivering substantial change programmes across the industry. Our consultants have significant experience in working across the Insurance market, covering Life and Pensions, General Insurance, London Markets, Brokers and Distribution. Baringa’s core capabilities are designed to address a breadth of challenges facing our Insurance clients. We have the ability to deploy individuals or teams that can work from the definition of a strategy, through to the testing and implementation of new capabilities and systems.
At Baringa Partners, we pride ourselves on being good listeners, being responsive and pragmatic, and challenging the status quo to deliver successful, sustainable change through a genuine “partnering” style of engagement. We deliver critical change for our insurance clients, including: Strategy and Operating Model Design • Operating Customer Service and Claims Diagnostics, • Sales,
Target Operating Model Definition and Transformation
• Digital Strategy Definition and Execution • Critical Programme Mobilisation, Delivery and QA • Process Re-engineering and Cost Reduction Delivery • Regulatory Programme Delivery • Core Product Platform Selection, Design, Build, Test and Implementation
• Data Migration. 2 Insurance
Baringa and your business As with much of the Financial Services Industry, Insurance remains under scrutiny from both the regulator and the public. The challenging global economic climate persists, leading to pressure on insurers to maintain low expenses while also working to reshape their operating models to meet the demands of the ‘digital age’ customer. Keeping employees, customers and regulators positively engaged, while attempting to transform business models and operations, will present winners and losers over the next 5-10 years and Executive teams have to make some bold decisions that will determine long-term success. In order to help focus this vital thinking, we have selected our view of the top areas that will require strategic thinking, planning and execution over the next year:
Market Driver
Business Focus
Global Economic Instability & Intense Market Competition
Expense Reduction
Digital Technology Innovation
Targeted Growth & Investment Decisions
Public, Regulatory & Government Scrutiny
Managing Compliance Costs & Realising Business Benefits
Key Executive Decision Areas 1 Processes, People & Systems – Operating Model Redesign 2 Value Chain Optimisation – Delivering Customer Value 3 Outsourcing & Offshoring – Adopting the Right Model 4 Digital Strategy – Prioritising the Right Choices 5 Segmentation – Beating the Competition 6 SME E-Trading – Fighting for Market Share 7 Conduct Risk – Achieving True Cultural Change rather than Pure Compliance 8 Solvency II – Managing the Long-haul 9 Government Engagement – Navigating an Unclear Path
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Expense Reduction At Baringa Partners we are seeing major insurers investing in sustainable cost take-out initiatives and predict the following operational efficiency levers to continue gaining pace:
Process, People and Systems – Operating Model redesign Cost savings have been critical over the past 10 years, particularly for those insurers struggling to balance the high costs of competing in global and specialist commercial markets with the low cost model required in Personal and SME business. The key has been to assess: ow to design an Operating Model that will easily evolve to support future growth • Hopportunities ow to efficiently build an organisation with reduced silos and improved speed of • Hexecution llocation of resources that will enable your business to effectively compete in key • Atarget markets. Baringa will work with your team on design through to implementation in order to maximise your organisation’s capability and demonstrate real results.
4 Insurance
Expense Reduction Value Chain Optimisation – delivering customer value
Outsourcing and Offshoring – adopting the right model
The growth in complexity in Value Chains, from supplier options, to channels and intermediaries, has created a need to carefully assess and develop the best design for maximised market growth and profitability. In order to maintain a competitive market position, insurers must determine:
In response to continued cost pressures, Insurers are looking to on/off/right shoring and the opportunities of cloud computing for efficiency gains. This brings with it some important considerations:
• ow to maintain a clear brand identity in the midst of • Hcomplex market distribution opportunities
How to assess, select and secure optimum routes to market
ow to ensure functions being on/off/right shored are • Haligned with your skills distribution hether the changes are for salary arbitrage or also an • Wopportunity for process improvement
ow to improve end-to-end customer service and • Hperformance while reducing major costs.
ow to leverage the cloud for better contact with your • Hpartners in the value chain.
Baringa can combine use of financial analytics, process efficiency and strategic partnership negotiation to help strengthen your business model and performance. Our consultants combine consulting skills with commercial acumen to bring you better results.
Baringa Partners has expertise in Operating Model redesign and can help you optimise your business to make best use of your current operating model and skills distribution. We have also worked with our clients to ensure the emerging opportunities from cloud based computing are understood and leveraged.
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Targeted Growth and Investment Decisions Digital Strategy – prioritising the right choices Increasing customer expectations means that many insurers are now placing digital capabilities at the heart of their strategy and seeking to capitalise on the following opportunities: ow to best utilise new technologies to reach new demographics and better • Hserve existing customers
• How to develop current core systems for enhanced digital capability • How to make better use of customer data to improve experience • How to use new technology to streamline operations. Baringa Partners has successfully helped insurers redefine how they approach their customers, brokers and intermediaries and distribute their products through innovation and inspiration from other industries.
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Targeted Growth and Investment Decisions Segmentation – beating the competition
SME E-Trading – fighting for market share
Traditional customer segmentation has focused on identifying specific customer needs across groups, and benchmarking the cost-to-serve of these groups vs. the competition in order to identify areas of potential advantage. Now, as the number of agile and innovative market entrants grow, insurers are having to review their segmentation models by considering:
While software houses have identified opportunities to provide better IT systems to serve brokers and customers, insurers have struggled to turn the complexity of choice in trading platforms into real return on investment. Insurers are asking: hat will make them stand out from the competition in • Waddition to technology and core product
ow to leverage internal customer MI, external data and the • Hexperience hether their aim in this space is mass market or niche and • Wwhat of their workforce to better understand their Operating Model is required to support this customers and how they are likely to evolve over time
ow to improve customer experience across all segments • Hwhile still maximising average price/cost position. Baringa’s Insurance team can help develop clear segmentation models by combining MI with the knowledge of your sales force. We are able to help you better understand your customers and build an executable strategy that will drive long-term growth.
ow to create a strategy that does more than copy market • Hleaders and thinks outside of current trends. Baringa can use its in-depth understanding of this market to help deliver the right solution in an environment where others may be pushing you to commit to high investments with little guarantee of success.
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Managing Compliance Costs and Realising Business Benefits Conduct Risk – compliance vs. true cultural change The UK regulatory landscape has changed significantly over the last year with the establishment of the FCA and PRA. The FCA has wasted no time in stamping its mark on the Insurance value chain. To maintain compliance within the FCA’s evolving approach insurers are considering:
• How to ensure sales and product design processes are FCA compliant to ensure effective audit trails are in place with suitable executive oversight • Handowgovernance • How to best deliver second line control ow to drive cultural change across the business with a focus on proactivity, • Hindividual ownership and judgement. Baringa’s experts in Insurance and Risk & Regulation can work with you to review and develop compliant processes, minimise the opportunity for conduct risk, and develop the agility to quickly identify and rectify potential conduct risks.
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Managing Compliance Costs and Realising Business Benefits Solvency II – managing the long-haul Following disagreement over the treatment of Life Insurer long-term guarantees, Solvency II’s implementation is likely to be delayed until January 2016, with ICA reporting remaining in force until then. As a result, firms need to review their plans in light of their outstanding gaps and the revised timescales and consider: ow best to leverage progress on their internal models as • Hpart of ICA reporting ow to split delivery between project and business in a • Hmanner that balances risk and cost ow to continue to respond to new developments in the • HSolvency II framework as effectively as possible. Building on our extensive knowledge of the regulatory space, Baringa can work with you to optimise the delivery model for further Solvency II development and effectively navigate future regulatory developments in the Solvency regime.
Government Engagement – navigating an unclear path The Insurance industry and individual companies have the opportunity to shape the future role of Insurance in customers’ lives, as well as the broader economy and society. Getting in tune and delivering against future expectations is likely to dictate the longer-term winners and losers and affect long-term brand value. It is therefore critical that companies consider: to maintain a view on longer-term industry direction • Handowplay an active part in shaping the future to actively engage with the Government, regulators • Handowtrade bodies
• Ensure linkage between vision, proposition and execution. Baringa can work with you to lead the agenda, clearly articulate the value to your customer and build for the future by aligning current operations for future success.
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Examples of what we do – relevant credentials OUTLINING A 2020 GI STRATEGY
IT STRATEGY AND ROADMAP
HIGH LEVEL OPERATIONS REVIEW / COST REDUCTION
CUSTOMER TRANSFORMATION PROGRAMME
REGULATORY CHANGE DELIVERY
Client:
Client:
Client:
Client:
Client:
Business Challenge:
Business Challenge:
Business Challenge:
Business Challenge:
Business Challenge:
Our client wanted to redefine their 2014 plan and capture the next strategic planning cycle up to 2020 to understand what the business would need to look like. Baringa was engaged to support this programme of work
Our client had a profitable growth strategy underpinned by improved claims performance and increased digital capability. Baringa was engaged to review the operating model and IT architecture, identify new capabilities needed then deliver the strategic platform to support this
Our client was experiencing major pressure on cost control, operational effectiveness and efficiency. Baringa was engaged to review the current organisation design and identify potential saving opportunities
The Chief Customer Officer (CCO) engaged Baringa to perform an independent review of current initiatives to identify what should be stopped/started/continued to deliver industry best practice and Operational Excellence
Baringa was engaged to support the Group Centre Solvency II programme and to increase delivery certainty, reduce risk and embed Programme Management rigour and discipline
Leading Global Insurer
10 Insurance
Leading UK General Insurer
Global Loss Adjuster
Major UK General Insurer
Global Composite Insurer
Examples of what we do – relevant credentials OUTLINING A 2020 GI STRATEGY
IT STRATEGY AND ROADMAP
HIGH LEVEL OPERATIONS REVIEW / COST REDUCTION
CUSTOMER TRANSFORMATION PROGRAMME
REGULATORY CHANGE DELIVERY
Client:
Client:
Client:
Client:
Client:
Benefits Delivered:
Benefits Delivered:
Benefits Delivered:
Benefits Delivered:
Benefits Delivered:
O rganised and facilitated
D efined a target operating
I dentified specific
P rovided an independent
Leading Global Insurer
two leadership away days to develop the plan R an a series of ‘share & challenge’ workshops with the client’s internal consultancies and ensured a joined up approach with the client’s executive team P resented the Baringa perspective on the challenges/opportunities in the Personal and Commercial lines landscape between now and 2020, taking into consideration the distribution channels and competitor landscape
Leading UK General Insurer
Global Loss Adjuster
model for the Sales, Service initiatives to address and Claims functions 12 key cost drivers which could reduce the R eviewed Claims and Sales operational cost base & Service metrics and for ~15% quantified improvement initiatives Highlighted “Quick Win” initiatives which could R eviewed the IT architecture be delivered within and provided a gap analysis 6-9 months to deliver of capabilities against immediate in-year business strategy benefits to finance the D efined the IT routemap following initiatives and ran a selection process C ompleted an Organisation to identify new core Design Review, identifying insurance platforms further in-year financial P roduced a full business savings to be realised case and mobilised the through a short term programme organisational change P rovided programme initiative management and design authority support during mobilisation and managed delivery of the requirements and design phases
Major UK General Insurer
Global Composite Insurer
U ndertook Programme review of the CCO reviews across in scope Change Portfolio. European countries and Highlighted strengths presented the findings and and weaknesses of the recommendations to the programme including a Programme Management view of initiatives to stop/ and European leadership start/continue to deliver P rovided delivery and test Operational Excellence management resource for T he Driver Trees created a Pillar 1 to meet critical format through which all deadlines future business cases could I mplemented Central be assessed to ensure a Group PMO function and balanced change portfolio central planning capability (not just cost cutting) I ntroduced a pragmatic Created a Vision and and robust Change Balanced Scorecard around Control process to which all future initiatives provide a mechanism for could be focused communicating, impacting D elivered a ‘Rich Picture’ to and implementing bring this vision to life and changes across all regions use with CCO staff across and workstreams the country to articulate the key messages
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For more information please contact:
[email protected] 0203 327 4220
About Baringa Partners Baringa Partners LLP is an award-winning management consultancy that specialises in the energy, financial services and utilities markets in the UK and continental Europe. It partners with organisations when they are developing and delivering key elements of their business strategy, as well as working extensively with government and regulators to provide policy and advisory services. Baringa works with its clients either to implement new or optimise existing business capabilities that relate to their people, processes and technology. Baringa is recognised both in the UK and internationally for its unique culture, which has been acknowledged by a number of awards and accolades and continues to reaffirm Baringa’s status as a leading people-centred organisation.
Baringa Partners LLP, 3rd Floor, Dominican Court, 17 Hatfields, London SE1 8DJ T +44 (0)203 327 4220 F +44 (0)203 327 4221 E
[email protected] W www.baringa.com
