Luis Charlo mapfre

Luis CharloDeputy Regional Director

for EropeMapfre Asistencia

( Spain )

Friday, 3 September 2010

Claims Settlement – Experience in MAPFRE

Luis Charlo

Hydra, September 3rd 2010

1- MAPFRE and MAPFRE ASISTENCIA

2- MAPFRE’s Direct Claims Settlement in Spain

3- Innovation in claims settlement processes

4- Exporting the Direct Claims Settlement model

5- Challenges in claims management

MAPFRE and MAPFRE ASISTENCIA

2009Spanish business group which undertakes insurance, reinsurance and

service provision activities for companies and individuals

Leader in Non-Life insurance in Spain and Latin America. Among the top 10 insurers in Europe, with noteworthy presence in the United States

One of the main Assistance and Reinsurance groups in the World

Present in 40 countries

More than 35,200 employees and over 5,800 offices

Consolidated revenue in 2009: more than 18,800 million euros

1 MAPFRE and MAPFRE ASISTENCIACLAIMS SETTLEMENT EXPERIENCE

MAPFREMAPFRE

MAPFRE ASISTENCIA is a multinational insurance, reinsurance and services company with a direct presence in 40 countries

We are the unit within MAPFRE S.A. specialized in Assistance , Specialty Risks and Claims Management Services and in charge of exporting MAPFRE’s Spanish know-how and best practices to other markets: in the areas of automobile , home, travel and health

1,330 corporate clients (1,000 Insurance companies), 74 million insured and 161 million beneficiaries, designing quality products and services tailored to meet the needs of our clients

We are certified as conforming to the ISO 9001:2000 International Quality Standard and have warranted Moody’s A1 financial rating since 2002

1 MAPFRE and MAPFRE ASISTENCIACLAIMS SETTLEMENT EXPERIENCE

MAPFRE ASISTENCIAMAPFRE ASISTENCIA

MAPFRE’s Direct Claims Settlement in SpainMAPFRE’s Direct Claims Settlement in Spain2

2 MAPFRE’s Direct Claims Settlement in SpainCLAIMS SETTLEMENT EXPERIENCE

Direct Claims Settlement Agreements emerge in order to:

• To improve the quality of the service received by the policy holder when having a claim • To avoid delays in the resolution of the claim

• To avoid disputes: with the damage assessment, with the payment, etc

• To set up regulations and sector criteria

• To minimize the number of legal claims

¿Why did Direct Claims Settlement agreements emerge?

2 Direct Claims Settlement in SpainCLAIMS SETTLEMENT EXPERIENCE

First agreement - CIDE

High number of claims going to court only to resolve material damages

Traffic accidents managed as civil proceedings on court

It gives impulse to the agreements

January 1st 1988: CIDE agreement starts

¿What is the CIDE agreement?

CIDE:

Convenio de Indemnización Directa Español

Target:

Direct settlement of the claim to the insured involved in a car accident, and that based on responsibility assignment regulations and internal market/sector criteria is not responsible for it.


Basic principles of the CIDE agreement

High automation

Specific response deadlines

Avoid going to court

Automatic compensation

Supervision and Arbitration Commission for resolving possible discrepancies


¿When can the CIDE agreement take place?

Only two vehicles involved in the accident

Damages produced because of a collision

Accurate fulfillment of the DAA (Friendly Accident Notification Form) including clear responsibility assignment

Material damages produced in the vehicle, not exceeding the TPL mandatory insurance limits

Insurance companies of both vehicles members of the CIDE agreement


Key fact is the correct fulfillment of DAA and that responsibility is determined on it

To determine who is responsible a Responsibility Matrix based on the circumstances/situation of each involved vehicle was developed

The creditor entity (non responsible) will indemnify its policy holder and receive a fix amount (Average Sector Cost) from the debtor entity


¿When can the CIDE agreement take place?

Supplementary Agreement to CIDE: It is signed with the aim of resolving those “CIDE” claims without or without an accurate or complete DAA Friendly Accident Notification Form

Acuerdo Suplementario del convenio CIDE


May 1st 1990 second agreement: ASCIDE starts

¿When can the ASCIDE agreement take place?

ASCIDE agreement is based exactly on the same principles of the CIDE agreement, but it is not mandatory to fullfil the DAA.

It is a compilation of regulations and resolutions from the Supervision and Arbitration Commission generated during the years of life of the agreements

Not filling the DAA may present different versions of the circumstances. For resolving it a Criteria Manual was developed with additional subsidiary regulations


Resolution phases for both CIDE/ASCIDE agreements

Friendly phase

Dialog phase

Supervision and Arbitration

Commission

Most of the claims are settled in this phase

Versions and assignment of responsibility not clear. Specialized

claim handlers have to participate in order to decide

Resolves all unresolved versions from the previous phases



December 2009 June 2010

Total number of files managed

CICOS module payment 327,427 172.438

CICOS module recovery 394,588 203.635

TOTAL 722,015 376,073

Files resolved in Dialog or Commission phases

Dialog 5,699 1,889

Commission 100 27

Main Figures CIDE and ASCIDE MAPFRE in Spain

Friendly phase

Dialog phase

Supervision and Arbitration

Commission


• Simplified procedures: claims settlement is speeded up due to the responsibility criteria and the response deadlines

• Reduction of legal expenses

• Reduction of Administration Expenses

• Companies’ image improvement. Good perception from policy holders

Advantages for Insurance Companies


Advantages for Insurance Companies

• Avoid claims going to court as well as discussions between insurance companies

• Faster damage assessment: Each Insurance company takes care of its own insured

• No repair budgets are needed

• Repair can start earlier and repair shop payment is done faster: increased claims settlement speed

• Faster Claims Management increases satisfaction of the policy holder

• Personalized customer service by his/her own insurance company, not by the third party

• Assessment and payment to repair shop done by his/her own insurance company, avoiding delays and out of pocket expenses


Advantages for Policy Holders

Innovation in claims settlement processesInnovation in claims settlement processes3

3 Innovation in Claims Settlement processCLAIMS SETTLEMENT EXPERIENCE

• For MAPFRE, with a portfolio in Spain of + 5,8 million vehicles innovation in claims management has to provide an increase in efficiency as well as a higher customer retention and satisfaction.

• At the same time MAPFRE was leading the Direct Settlement Agreements creation in Spain, the first Drive-In Assessment Centers were launched with the expertise of CESVIMAP.

Service to policy holders and third parties.

Managing Direct Agreement Claims

Damage Assessment and payment order for the repair shop.

Specifically designed centres for QUICK DAMAGE EVALUATION


Drive-In Assessment Centers:Drive-In Assessment Centers:


MAPFRE Service CentersMAPFRE Service Centers

How can be the service to the policy holder improved when a loss takes place?

How to receive the highest quality perception from the customer?

How to generate an integral management of the claim?

How improve the loss ratio?

How to settle claims in a more efficient way?

How to keep Policy Holders loyal?

How to…..?

Accident takes place

Accident takes placeClaim

notification

Claim notification

to MAPFRE

to MAPFRE

Going to repair shop

Going to repair shopDam

age assessment

Damage assessm

ent

Repaired vehicl

e

Repaired vehicl

e

in repair s

hop

in repair s

hop

Customer perception

MAPFRE presenceNot MAPFRE presence

Traditional Claims CycleTraditional Claims Cycle

Claims service settlementClaims service settlement




Contact MAPFRE

Contact MAPFRE

Take the re

paired

Take the re

paired

carcar

Leave th

e replace

ment vehicl

e

Leave th

e replace

ment vehicl

e

Customer perception

MAPFRE presenceNot MAPFRE presence


Service Center Claims CycleService Center Claims Cycle

Claims service settlementClaims service settlement

Centro de Servicio de Alcalá

Looking forward to:

To be One Stop Solution for the Policy Holder when having a claim:

Resolve all doubts regarding the settlementLeaving damaged car for damage assessment Taking a Replacement CarMost appropriate repair shop selected by MAPFREShortest repair period MAPFRE’s life guarantee certificate on body

and painting jobs

MAPFRE Service Centers:MAPFRE Service Centers:


Benefits for MAPFRE

Customers loyalty Portfolio retentionAverage cost reduction of the repairNo delays in starting the repairsClaims’ settlement speed under controlBetter control of the repair shop networkExtremely high customers satisfaction ratios


MAPFRE Service Centers:MAPFRE Service Centers:

Centro de Servicio de Alcorcón

Exporting the Direct Claims Settlement ModelExporting the Direct Claims Settlement Model4

4 Exporting the Direct Claims Settlement modelCOMPLEMENTARY SERVICES FOR INSURANCE COMPANIES

MAPFRE ASISTENCIA looking forward to offer the best solutions to its Clients, is always challenging the circumstances and adapting proven MAPFRE experiences to other markets.

A good example is the development and implementation of a Direct Claims Settlement Agreement in Panamá for several insurance companies, through our subsidiary PANAMA ASISTENCIA, based on MAPFRE’s Spanish experience and know-how.

It was launched in 2007 and the companies that currently are under the Direct Claims Settlement Friendly Agreement are: HSBC, Fedpa, ANCON, Suramericana and Nacional.

Exporting MAPFRE experience:Exporting MAPFRE experience:


Spanish Friendly Agreement declaration form was adapted by MAPFRE ASISTENCIA to the local Panamanian requirements and a Responsibility assignment matrix was developed according to the Panamanian legislation.

MAPFRE ASISTENCIA

Claims declaration Accident Scene: File The

Claim And Photos

Our Contact CenterCustomer

Client Company



Change the mentality of drivers was the most important challenge:

1. Hot line for communicating an accident2. Expert is sent to the place of accident3. Friendly Claim Form is filled and signed4. Pictures are taken on the spot5. PANAMA ASISTENCIA evaluates the form and applies Responsibility Matrix6. Information loaded on the web (developed by MAPFRE ASISTENCIA)7. Information is sent to Claims Departments8. 72 hrs. to decide accepting the decision

99% of claims are accepted by members

Damaged car is indemnified by third party company

2.000 claims are managed monthly by PANAMA ASISTENCIA aprox. 500 are managed through the Direct Claim Settlement Friendly Agreement

PRESENTACION CORPORATIVA 2010


All the information is stored and accessible through an specific web site developed by MAPFRE ASISTENCIA

First step to make claims handling easier, offering a better service to the policy holder

Access 7*24 for claim notification.

Accident care: Help on the spot accident report fulfilment, pictures of damages and scene of the accident.

Fast processing

Neutral analysis and responsibility assignment

Reduction of claim settlement time

Minimize possibilities of fraud

Extending the image of quality service offered to the policy holders

DirectDirectClaim Claim

SettlementSettlement

Advantages obtained by Insurance Companies members:Advantages obtained by Insurance Companies members:


Challenges in claims managementChallenges in claims management5

5 Challenges in Claims ManagementCOMPLEMENTARY SERVICES FOR INSURANCE COMPANIES

• Next challenges for the Claims Departments will come from the innovation in products and from the integration of all participants in the Claims Life

• Integrating the repair shops networks as part of the value chain.

• Changing the role of the damage assessors as controllers, offering value to the repairshops

• Improving the repair techniques delivering better repairs in less time

• …


• Regarding products, what is missing today in the motor portfolio of most insurance companies?

Accident Breakdown

Cost of Repairs

Yes

Assistance Yes Yes

Mechanical Breakdown Insurance coverage commercialised as an added value within the Motor Insurance Policy, covering the cost of the repairs of mechanical and electrical failures, covering both, the cost of the spare parts as well as labour cost.

1. Some Motor Insurance markets are already offering it.

2. It is the right moment:

Crisis – people are worried about having to pay for extra expenses.

Big price competition amongst Insurers.

Innovate the market (Competitive advantage)

3. Good opportunity: Increase turnover with NO RISK.

Why is it a challenge?Why is it a challenge?


AdvantagesAdvantages


For the InsuredFor the Insured

Integrated cover

Competitive price

No extra out of pocket expenses

Repair Quality Control

Repair in specialized repair-shops

For the Insurance CompanyFor the Insurance Company

Pioneer and differentiation from the Competition

“Global” Insurance

Flexible products for each category of insured

Strengthens loyalty

Non-risk profit source

1- MAPFRE and MAPFRE ASISTENCIA

2- MAPFRE’s Direct Claims Settlement in Spain

3- Innovation in claims settlement processes

4- Exporting the Direct Claims Settlement model

4- Challenges in claims management

Gracias

Ευχαριστώ

Luis Charlo mapfre

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