ICTI Conference Brijuni 1820 October 2007

Technology Innovation as a Competitive Weapon for Claims Management

Growth is not enough - GBMM - 011106 - JT 9am

Agenda

New frontiers in claims technology

Working Draft - Last Modified 23/10/2007 9.51.13

Divide and conquer

1 1

Growth is not enough - GBMM - 011106 - JT 9am

The sources of claims innovation

Trends

Fresh ideas (yet to become enablers)

Convergence of
TLC, internet, TV

Wireless claims applications Accident reconstruction technology

Increasing data
flows and directory searches

Litigation management environment

Working Draft - Last Modified 23/10/2007 9.51.13

Advanced disease management Community

management tools

Remote assessments Voice biometric technologies Predictive modeling

Increasing
computing power

2 2

Growth is not enough - GBMM - 011106 - JT 9am

Wireless applications: enhance information gathering and interaction with customers

Wireless devices can support realtime claims submittal, assessment, negotiation, and payment

Opportunity for adjusters and customers

Impact

Higher customer
satisfaction and involvement
Working Draft - Last Modified 23/10/2007 9.51.13

Faster claims
handling process

Higher productivity
of assessors and adjustors

3 3

Growth is not enough - GBMM - 011106 - JT 9am

Accident reconstruction technology: improve claims dynamics understanding

Easy to install clear box chip installed on the car able to track and send to a central unit how many km are driven, when, where and how fast Claims business opportunity

Impact

400.000 new
customers in 12 months in Italy
Working Draft - Last Modified 23/10/2007 9.51.13

Average cost of
claims 5%

Frequency -15% Attract with proper discount good

customer segments with lower claims frequency Accident reconstruction algorithms Black box available for litigation management

4 4

Growth is not enough - GBMM - 011106 - JT 9am

Claims animation solutions: improve understanding of complex claims and backup technical decisions

Recreate car crash effects, providing visual re-tracing of impact points, and identify / confirm possible injuries resulting from different types of crashes

Claims business opportunity

Impact

Demystify crash
data, soft tissue damages and resulting claim expenses
Working Draft - Last Modified 23/10/2007 9.51.13

Support litigation Accuracy of

reserves

5 5

Growth is not enough - GBMM - 011106 - JT 9am

Advanced disease management: improves customer well being and reduces case cost
Remote intensive care unit helps identify chronic conditions early and refer patients to comprehensive programs to improve their health and well being Claims business opportunity Impact after one year

Cardiopulmonary
arrests < 50%

Mortality of patient
admitted to program < 16%
Working Draft - Last Modified 23/10/2007 9.51.13

Patient discharged
by hospitals > 22%

~ 20 lives saved Data search engines and predictive

modeling Web community for - 24/7 monitoring - Counseling on demand - Education Alert on-site staff Exchange data with hospitals Drug story tracking
6 6

Growth is not enough - GBMM - 011106 - JT 9am

Litigation management solutions: improve workflow of arbitrations and legal activities

An electronic workspace supporting interaction and communication of claims handlers, assessors and lawyers Claims business opportunity Impact

Reduction in cost of
interaction

Improved workflow
of legal activities

Improved customer
service

Working Draft - Last Modified 23/10/2007 9.51.13

Real-time collaboration Analysis of legal process and

impact of decision options Skill-based routing for trial assignment Decision support tool Automated invoicing and reporting

7 7

Growth is not enough - GBMM - 011106 - JT 9am

Tele-claims technologies: enabling on-line remote assessments

Claims business opportunity Remote on-line assessment of car damages made by a technical call center using video cameras in preferred body shops Can provide distinctive service to clients (spend and quality) and reduce intermediation during assessment phase

Impact

Most motor claims

settled in <23 working days
Working Draft - Last Modified 23/10/2007 9.51.13

Minimise extra
payout

High share of
customers delighted by outstanding level of service

8 8

Growth is not enough - GBMM - 011106 - JT 9am

Voice biometric technology: supports advanced fraud detection

Claims business opportunity Analyze and measure physical and behavioral characteristics of individuals Rank claimant reliability based on Analysis of emotional state Analysis of narrative integrity Cognitive interviewing/double checks Impact

Pushes genuine
customers onto fast track Reduces throughput time and claims handling costs Lower leakage risk Improved service

Working Draft - Last Modified 23/10/2007 9.51.13

Triggers investigation of
high risk calls Better leakage control Better focus of investigators and assessors

9 9

Growth is not enough - GBMM - 011106 - JT 9am

Agenda

New frontiers in claims technology

Working Draft - Last Modified 23/10/2007 9.51.13

Divide and conquer

10 10

Growth is not enough - GBMM - 011106 - JT 9am

The typical IT project portfolio has too little focus on innovation

IT investment budget (capex), percent Innovation projects 100 4

Working Draft - Last Modified 23/10/2007 9.51.13

Regulatory compliance, infrastructure improvement, legacy maintenance application evolution

96

IT will tend to focus too much on costs and business continuity

2005
11 11

Growth is not enough - GBMM - 011106 - JT 9am

It is imperative to understand how IT adds value

Get pole position Win the race Change the rules

IT as a commodity

IT as business enabler

IT as innovation tool
Working Draft - Last Modified 23/10/2007 9.51.13

Necessary to do
business

Necessary to beat
competition by improving product, services, and performance

Turning IT into a
competitive weapon, innovating markets and services or changing the value chain

Value Low cost, protect revenues, limit operational failure or regulatory liabilities

Business performance
improvement

New market positioning One step ahead of

competitors

12 12

Growth is not enough - GBMM - 011106 - JT 9am

The three-part approach is very applicable in claims

Get pole position Win the race Change the rules

IT as a commodity

IT as business enablers

IT as innovation tool

Infrastructure mgmt Core legacy platforms Accounting and backoffice activities Document and data management Application development technologies

Seamless channel
integration (e.g., first notification) On-line platform Integration with third parties eCFR and performance mgmt Sophisticated assessment tools Teleclaims

Data search engines Voice biometric Wireless claims Accident reconstruction Predictive analysis tools Virtual interactions and negotiations

Working Draft - Last Modified 23/10/2007 9.51.13

13 13

Growth is not enough - GBMM - 011106 - JT 9am

Push IT managers to adopt a three-part budget model and manage each part separately
Total budget Index

Infrastructure Applications business users

100

are satisfied about Mandatory initiatives

Applications business
60-70

Working Draft - Last Modified 23/10/2007 9.51.13

users are not satisfied New applications

Applications not
20-25 5-10 Total IT budget IT as a commodity IT as enabler IT as innovation tool

conceived by business users

14 14

Growth is not enough - GBMM - 011106 - JT 9am

Claims executives role varies across the three parts

Business leaders role IT as a commodity Smart buyer

KPI to be tracked

Goals Quality services at low cost

Cost drivers Technology complexity Platform flexibility

Working Draft - Last Modified 23/10/2007 9.51.13

IT as enabler

Managing partner

Organisational
performance Times Quality

Continuous performance improvement

IT as innovation tool

Talent scout

No. of ideas Brand recognition

Build competitive advantage

15 15