Claims: A Leader’s Perspective – Waseem Malik, AXA Insurance (Part 2)
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.
Following on from Part 1, Today’s interview is with Waseem Malik – Executive Managing Director of Claims – AXA Insurance
- Previous roles include CFO for AXA Insurance & Head of Mergers & Acquisitions for AXA UK.
- He is also a Board Member of Thatcham Research and the Insurance Fraud Bureau.
- Prior to AXA, he worked for Price Waterhouse Coopers as a chartered accountant for nine years.
IDENTIFYING SUPPLY CHAIN PARTNERS
Q21. When you’re looking at either an existing or new supply chain partner, what are the key factors you take into consideration, when looking at a partnership?
I would probably compartmentalise it into two categories – so there’s probably hygiene factors, so the hygiene factors would be that they have got to be cost effective, they’ve got to have the right capability, and they’ve got to make sure customer service is at the forefront of what they do.
But I think beyond that, we probably need to share the same ethos in terms of what the culture is in the organisation, how committed they are to executing the best action for the customer first time. But then also, in terms of, I think more and more now, we need partners who are agile, we need partners who are also bringing digital or technological solutions to us. Because if you’re not, you’re going to be left behind and what we don’t want to do is partner with someone who is working on an outdated method when there are many new things out there in the market.
So, I think gone are the days when it is just about price, because that’s a hygiene factor now and you almost need to hit that to even sort of get beyond that first stage, but then I think it’s; what’s the value add?, what’s the culture?, what’s the customer ethos? I think they are the things that are beginning to differentiate and we’ve recently terminated an arrangement because of poor customer service. They were cheap, they were actually nice people but we just got too many customer complaints and that’s not good enough.
Q22. How do you identify the culture of the organisation you’re potentially going to partner with?
It’s hard because it’s one of those things you can’t touch. So we do quite a lot of due diligence before we go into any arrangement and a lot of that will look at a number of different types of KPIs and actually, we will look at customer KPIs, we will look at complaint rates, we will look at what remediation they have done, what lessons they’re learnt. So, all of that gives you a bit of an insight as to; are they even tracking the right KPIs or not? Or are they focused just on price?
The KPIs that people have, gives you a lot of insights into that organisation, so if you look at their dashboard and on page one it’s only financials, and on page twenty-six there is mention of customer, then they’re probably not going to have the same customer ethos that you’re looking for. Whereas if on page one it’s all about customer satisfaction, complaint rates, that gives you a very different picture.
Q23. Does AXA invest or have joint venture arrangements with any claims InsurTech companies?
So we have parts of AXA that do exactly that. We have two or three separate organisations within AXA. We have AXA Next, we have AXA Kamet and AXA Strategic Ventures and what they will do is very much that. They will be looking at those insure tech players, those start-ups to see what is out there. They will invest, take stakes, build partnerships and build joint propositions. We talk with those parts of AXA because they’re keen to understand what are our pinch points, what are the types of things we might be interested in. So that works quite well in some ways. It keeps the capability ring-fenced away from the main business which again I think is healthy and allows innovation to prosper and get focus.
Q24. Are there any key areas you’re currently looking at?
Yes there are but I can’t give anything away so watch this space!
Q25. Do you see any gaps in the market from a claims technology perspective?
That is quite a tough question, I would probably say it’s the other problem – there’s almost too much out there and it’s really hard to know what’s real. Because we’ve got these AXA entities they’re almost experts in it, so we will utilise them to get a better more informed perspective. Obviously, we have a number of supply chain partners, a lot of the insure techs are talking to them as well and in some ways it’s quite neat if it comes in through one your existing partners as an add on service as it can be easier to implement
We’re quite happy to do proof of concepts, if we can do it in a quick short, sharp way and then if it flies; great, if it doesn’t, you know nothing lost, move on to the next. So I think that’s quite important from an insure tech perspective as well, that they need to be prepared to do those very short proof of concepts and make it easy to work with. Because you know, as any big corporate, we have process, we have procurement, we have things like that and a lot of insure techs struggle with that, so we’ve both got to give and take a little bit.
Q26. Some of the feedback I get from speaking with supply chain companies, it seems to be quite a slow decision-making process to agreement on new initiatives. Would you say that is just because of the nature of the size of an organisation, not AXA in particular?
Yes, I would probably say that is part and parcel of big corporates, clearly all of us want to be more efficient and quicker because clearly, the more time we take it’s not good for us either. So, we do constantly strive to get better and quicker. But at the same time, we all have covenants we need to follow.
BREXIT – GREATEST IMPACT
Q27. What impact do you think Brexit is going to have on claims?
I would say the largest impact will be on the motor supply chain. In a hard Brexit, there will be significant delays in getting spare parts in., If you look at the UK 70% of vehicles on the road are either manufactured in Europe or spare parts are manufactured in Europe, so that is a large proportion. So, any delay means a number of things, – the whole repair process is going to take a lot longer, it’s going to mean people are going to be in replacement or courtesy cars for much longer.
There are actually not enough hire cars in the UK market to meet that demand. So the cost of hire is going to go through the roof. We already have credit hire organisations in the UK, heavily active, that’s only going to get worse and all of this is going to impact the consumer at the end of the day because their repairs are going to take longer and it’s going to increase the cost which ultimately will be borne by the consumer. So, it’s pretty bad news. It may mean people would start looking at non-manufacture approved parts, it might mean looking at green recycled parts, but none of them are quick wins. So, all the main repairers are looking at things like that, but there is no silver bullet. So, I think if the worse-case scenario plays out I think the impact on motor repair is quite brutal.
There are other parts of claims that will also be impacted, so travel is probably the other big area. So at the moment if you travel in the EU, you have your EHIC card which means you can claim back from the local NHS type equivalent. That won’t be the case anymore so that will inflate costs of treatment. So I would expect a hike in travel insurance premiums, depending on where you travel to.
And then we’ve got the green card system. If you decide to drive abroad, which is a real administrative chore for insurers to administer that and we’re all ordering a lot of green cardboard!!
So, you know, they’re all significant impacts and I’m not sure there is an easy way through any of them in a sort of severe Brexit environment. We’re all prepared for it but the motor one is hard to prepare for because there’s no way we have of accelerating the delivery of spare parts. Certainly not in the short term, but I’m sure over time it will work its way through, but there will be a short-term impact.
And the worse thing is the uncertainly, I think if a decision was made either way and a clear path to it, then you can prepare. It’s the not knowing and it just means everyone ultimately prepares for that worst-case scenario, but you can’t really put it into motion until you know where it’s going.
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For part 1 of this blog, please click here. Look out for more blogs coming soon!
All the best,
Founder & MD
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