Claims: A Leader’s Perspective – Graham Gibson, Allianz Insurance (Part 1)
The Claims sector continues to evolve and adapt in the ever-changing Insurance landscape.
I have recently interviewed a number of Claims Directors from Leading Insurance Companies, together with the leaders of several Claims Management and Supply Chain organisations, to discuss their views on various topics impacting the claims market today and potentially in the future.
Today’s interview is with Graham Gibson, Chief Claims Officer – Allianz Insurance plc
- Graham joined Allianz as Director, Claims in June 2008.
- Prior to this he held a number of senior management positions in the industry, including Director of Claims for Groupama.
- Graham represents Allianz in a number of market initiatives. Currently, he is an Allianz Pensions Trustee, a director of the IFB and the Chairman of Thatcham.
- Graham is a regular speaker at industry seminars and a contributor to trade press articles.
Q1. In terms of the claim area, I know we’re rewinding the clock a little bit now but, what initially attracted you into the world of claims?
What attracted me into the world of claims, if I’m being absolutely honest, was an extra £500 a year! I went into a proper management trainee course, rather like what a graduate trainee courses will look like today. It involved study and working in different parts of the business and learning through cross-skilling effectively. It’s what I always say to the graduates when they ask, ‘What’s your advice?’ My answer is ‘Do different things to start with, find out what works for you and then pursue it, rather than going into one area and finding it’s not what you like’. Quite genuinely I ended up going into claims handling because an opportunity arose. I found the role really interesting and the £500 pay rise didn’t go amiss, which I know doesn’t sound a lot, but I think it was something like a 20 percent pay rise at the time – quite a big thing!
Then with my career I’ve just been very careful about doing different roles, mainly within the claims area but I’ve worked in operational, technical, project management and project roles making sure I was learning and gaining different skills along the way.
Q2. What do you see would be the attraction for an individual today, whether as a graduate entry or at an early stage of their career, going into the world of claims?
Funnily enough, I was speaking to a couple of our graduates on Friday, and the overwhelming thing that came across to me is that they didn’t previously realise how much insurance touches everything we do, virtually every day. They were almost taken aback by the fact that insurance can underpin society in so many ways. So, I think it’s a bit of a generalisation and a bit of a cliché, but they had a perception of it being very grey and quite mundane. However, now they are working in the industry, they’ve actually realised that insurance in general, – and claims more specifically – is just a fantastically interesting business. It gives you the ability to touch and do so many things, which was not their expectation when they were coming into the industry.
Q3. Do you think the public’s perception of the Insurance industry has changed or improved?
I think there has been improvement – but having said that there’s still a lot to do. One of my colleagues is now Non-Executive Director of the CI Claims Faculty, and their main focus is really to get the message out about insurance, and what that actually means, and get the public to recognise the important function that it brings. He recently showed me something that said the British public thought that insurers only paid out in approximately 50 percent of all claims, however the stats are actually in the high 90s. So, depending on what insurer and what class of business you’re running between 97 and 99 percent, that’s what we do. We’re actually here to help our customers, not hinder them by restricting their claims. Clearly there is a perception issue that we all need to work hard at to overcome.
CLAIMS – APPRENTICESHIP SCHEMES
Q4. Some other Insurers have set up apprenticeship schemes more targeting the 16 and18-year olds, at the college level, and they give a structured programme and mentorship, if is that something that Allianz has got in place?
It is, and it’s something that I’m quite proud of, both in terms of claims and the business. We start with apprenticeships or graduates, and this is quite claim-specific; we have something called EIC, Excellence in Claims, where we really drive the training of our people. Then we go into the more corporate programmes like Aspire and the Claims Leadership Development Programme, which helps our people to become a team leader. We then have courses that help you get from a team leader to a manager, and it goes all the way up to the top where we use Henley. So, if you are a senior manager in Allianz, you’ve got direct access to Henley, and we’ve got every base covered all the way up. Finally we have our own in house “university” where senior people within the company have access to world class leadership training.
Within our claims plan we have five days of classroom training per year, excluding inductions and ad-hoc side-by-side training, as we have a firm belief that well-trained people make the difference. I think the reason we do that is because we’re getting to a world where everyone’s getting the same data, everyone’s using the same claims systems or underwriting systems. It’s actually becoming quite homogenised, so you need to develop a skill – something that gives you the edge over your competitor.
Q5. How long have you been running that scheme for?
Well I joined Allianz 10 years ago, and it was in place then. Now, it’s changed and it’s morphed, and we’ve added things in and taken things away, but yes, for a very long time.
Q6. I know it’s a hard one to answer, can you assess the impact that the scheme has in terms of attrition rates, or people coming in, or development, how do you monitor whether it’s doing well or needs tweaking? Is there a structure in place?
Attrition rates is a very useful measure, and we’ve also look at our customer feedback, our indemnity spend data, not to mention what our people are telling us. But to come back to the attrition measure our contact centre in Birmingham, which is a customer contact centre, is an area where you would expect attrition in the 20s, maybe the 30s. The lowest it’s been is 7.8% and it runs at a long-term average of 10%. So, we are half the market average for attrition in our contact centres, and a lot of that is down to how we invest in our people. We look after our people more widely through various ways, whether it’s mental health programmes, or breakfast clubs, fruit, trying to make it interesting and keeping employees engaged.
At the end of the day employing and training someone is an expensive game to we really do win all round. We have well trained, highly engaged people who do a great job for our customers and it benefits the company from an expenses perspective.
Q7. How does the mind-set of a ‘Millennial’ differ from other generations you work with?
At the moment we’ve effectively got three generations working in our business, depending on where you are, but certainly within claims we have that, and these three generations have a reasonably different view of the world and clear differences in expectations.
For example, there used to be a time where I’d go to company roadshows around the business and I wouldn’t get challenged with many questions. However, I now often receive questions from millennial colleagues like, ‘What’s your personal view on …?’ ‘What do you do about recycling and environment?’. Our millennial colleagues are much more interested in the purpose of the business, what we’re trying to do to help our customers; they’re much more interested in things like mental health, and what the organisation can do around what I would call general support. Another example is that some Millennials may have different expectations to the ‘normal’ working hours and look for roles with flexible working which fits their lifestyle.
Q8. Do you think the role of a claims director has changed in recent years?
Yes, historically you might have come from a legal background, or maybe a senior adjuster coming from that type of background, and certainly when I look back at my career I came up through the technical route. I did operational and other roles but ultimately that’s how I got to where I am today. I think right here, right now, there’s far more emphasis on technology and data. I can’t really give you a percentage but what I can say is that I spend more time talking about our IT stack, the data it’s producing and what we’re going to do with it, rather than talking about specific claims or the legal aspect of what we do.
Q9. From a claims perspective, what do you see as the greatest challenges facing insurers today?
We’re definitely moving into a world where understanding the IT stack, the data it gives you, and the actions you drive out of that data is becoming more and more important. That can be a little bit tricky. Let’s take our technical experts as an example, who have earned their stripes off the back of their technical knowledge and experience… some of these folk are in a place now where someone like me is pitching up and saying, ‘That’s great, but you also need to understand the data, tell me what the data is telling you, and how we’re going to use that to improve the business’.
Some of the more mundane tasks that any financial services organisation is involved in is now being automated or robotised, so that sort of stuff is definitely disappearing. It gives a problem in terms of basic training. If you think about a triangle: it starts at the thin point and then grows outwards, and what makes it grow outwards is complexity and experience. Well, the start of the triangle is disappearing, so the training grounds – things like simple claims, data processing, areas where we would traditionally have trained employees, brought them in and got them to learn at that level – that’s disappearing. The people now arriving into our business are at a point that’s probably 18-months further on than traditionally would have happened, so they start their first day at 18-months into the business and begin their traineeship at a much more complex level. That’s a challenge!
Q10. How does having more accurate accessible data assist you?
It helps us to understand much more about the customer, and it helps us to understand much more about the trends. So again, historically insurers would adopt what I would call a rear-view mirror approach – they’d be looking backwards waiting to see what our actuarial colleagues told us about what’s happening in the world, and then we’d respond accordingly. We’ve gone from that place to a much more forward view, trying to anticipate – through data and other mechanisms – what’s coming down the track. We’re almost trying to change our business before the change arrives and planning for this before it crosses our desk, as it were.
Q11. What do you see as the greatest opportunity for insurers, from a claims perspective?
I think the opportunities come from changing the model. The way I explain that is: There are two things about the word claim – it’s a negative word: you have to make a claim, and it also infers the effort of making a claim. Allianz is focusing on moving these words out of our lexicon and talking much more about ‘helping’ the customer in their time of need. That doesn’t even necessarily mean there has to be cover. If we come across someone who isn’t covered, we’re looking at how we can help them even though they might not have an Allianz policy that responds to a particular set of circumstances.
That’s where we’re going in terms of talking much more about helping, rather than claiming, what we can do to assist. Looking through that lens, it becomes ‘How can we help you?’ as opposed to how to make a claim; our approach is outward-facing, rather than inward-facing.
Q12. What scoring mechanisms do you use?
We tend to use NPS, and we do that because we are mainly a broker insurer, and we’re more commercially biased because of our business mix. It’s not a hard and fast rule, but retail businesses tend to go down the Feefo route, and commercial businesses tend to use NPS.
Q13. Is that the key matrix you use to analyse certain aspects of the claims business?
Absolutely, and we do a couple of other things. I know this sounds bizarre, but we do actually go and speak to our customers, and I don’t mean we go and have a chat and a cup of coffee! We go and have a proper conversation with our customers around what is working, and what’s not working, what we need to do to make the process and touch points work for us all. So, in terms of, for example, building application software, our apps, portals and things like that, we actually have customers in the room when we develop the technology.
We have really changed our approach in the last five years in that respect and we are now actively inviting them in and asking them for their assistance in showing us what ‘good’ looks like. It never fails to amaze me how keen customers read to help you with that – understandably, because it helps us give them a better service.
Q14. I know there’s quite a lot of initiatives out there with Insurers educating the consumer on things that can be done to prevent a claim in the first place. Are there certain things that Allianz are doing as a business down that route?
Yes, and again that’s a good example of how we’re trying to reverse the polarity in terms just letting things happen or dealing with it after the event. A good example of that is our really sophisticated weather mapping – and geocoding tools – which are super-accurate, especially for flood. We can tell you if your property is going to be flooded before it happens, and we can proactively do something about it. It means we can contact our customers and advise them which precautions to take. It’s a bit harder with a storm because the impacted area is wider, but we can tell where it’s going to go. We had a flood a couple of years ago and a very large motor trader had several hundred cars in their carpark, which we were able to tell would be flooded. We were able to say, ‘You need to move the cars to higher ground’, which they did. The flood happened, and the precaution saved us a fortune and our customer from a significant inconvenience. You can do things like that now with a real degree of accuracy.
If we can help our customers prevent a loss, it’s good for us, and it’s good for them. It is a proper win-win and it’s something that we should, as an industry, be doing more of.
Q15. Are there any other key initiatives that Allianz are involved with that you’d like to mention?
I think we’re all looking at different opportunities – the whole insurance market’s doing that, and we’re no exception. I think one thing that sets Allianz apart and does give us an advantage is our size. At the end of the day, if you’re building digital innovations that have a cost, and if you’re a large organisation you can spread the cost – it’s no more sophisticated than that.
If I look at the future of insurance I genuinely believe, whether you like it or not, you either have to be very big or very niche. If you sit somewhere in the middle, I think you’re going to find life really very tough indeed, because you won’t have the ability to spread the significant investment needed across a global business-like Allianz.
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Please click here for part 2!
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