The full year CPM 2011 has been delivered to our clients today.

Our team has been burning the midnight oil to get reports completed in time for Christmas and to distil the research into clear direction for improving performances.  We will be meeting with clients in the New Year to discuss and refine these actions.

So, what will the claims managers find when they  flick through their reports before heading home for Christmas?

This has been a challenging year for anyone working in claims – apart from record catastrophes, teams are having to cope with Minimum Standards, CTP and ECF II to name but a few of the market initiatives.  I have certainly detected a degree of frustration as yet more requirements get piled on already under-resourced teams.  Brokers have sympathy for teams who have resourcing issues but still need to satisfy client needs.

Despite that, service standards continue to rise in 2011 and claims teams seem determined to move forward on the service front just as much as they (have to) on the regulatory and process areas.  The big needs-shift this year is away from process and onto relationships and while this has been a noticeable trend over the past two years it seems to have really accelerated in 2011, particularly as ECF seems to have become part of business-as-usual.

If I was a claims director reading this report the first thoughts I’d have would be:

• it’s an increasingly competitive space – how can we stand out from the crowd?
• how can I attract and retain the best claims talent in 2012?
• how can I best communicate the quality of the claims service that I am offering?

13 October 2011, LONDON – The London insurance market’s claims service has improved year-on-year since 2009 according to the latest study from leading research company Gracechurch Consulting.

Data from Gracechurch’s latest study reveals that claims service has improved gradually since 2009.  The research also reveals that there is a group of 7-8  high performing larger Lloyd’s insurers whose claims service is improving much more rapidly than the average;  in fact without these the performance is fairly flat.

The finding is significant in that it is based on over 6000 individual broker service ratings collected since the beginning of 2009.  The benchmarking study is used by many of the leading insurers to help in figuring out howto improve claims service.

The study also shows that a gap has opened up between Lloyd’s and the companies market with Lloyd’s on average outperforming companies on service.

The study’s findings were welcomed by the CEO of the Lloyd’s Market Association, David Gittings, whose organisation has been at the forefront of efforts to boost claims performance in the Lloyd’s market.

Gracechurch notes that more and more Lloyd’s insurers are switching on to delivering better claims service for brokers and this is driving improving standards.

Ben Bolton MD of Gracechurch commented:  “When we first started measuring London claims service in 2005 it was distinctly mediocre;  now looking at 2011 data an increasing number of insurers have the majority of their brokers ratingtheir service as‘excellent’ – that represents exemplary service for any market and shows what can be achieved.”

But Bolton warns:  “The average improvement is good news but service improvements are not consistent across the board and there is still a rump of poor claims service providers who seem reluctant to accept thatgreat service is a vital component of London’s high quality reputation; this is creating a real drag on the pace of improvement.  The other issue is that insurers are often too modest about publicising good performance.”

David Gittings of the LMA commented;  “This is again positive news for Lloyd’s on claims – the study also highlights positive acceptance of ECF as delivering real benefits for brokers and client,  showing that process improvements are contributing too – we must though keep up the pressure to make sure that we are the leading market in claims service – and recognised as such.”

Claims performance in the London market has been the focus of a number of initiatives including ECF2 and the Market Processes project.

Contact:

Gracechurch Consulting:  Ben Bolton bbolton@grch.net  020 7002 7679  www.grch.net

Gracechurch and Refraction Cellar Club, Thursday 22nd September:  John Bullough talks about his experiences as CEO of the largest property company in Abu Dhabi.

John Bullough, former CEO of Aldar Properties, gave a fascinating and candid talk about his time as CEO of a company which was literally ‘building a nation’. With John at the helm, Aldar was responsible for a substantial portion of the huge national development programme for Abu Dhabi.

John also happened to become CEO at the point where the world economy was in meltdown and so had to manage, not only an incredibly ambitious development programme (“things that would have taken four or five years in the West, we had to build and complete in 18 months”) but also the impact on Aldar of the bursting of the speculative property bubble in the UAE.

Aldar’s most prominent project was the the Yas Island development, which included the Abu Dhabi Formula 1 race-track. This became the iconic centrepiece of Abu Dhabi’s development, slated to be a showpiece to the world: failure to deliver on time was not an option.

Against this backdrop John reflected on his ‘unconventional’ appointment and the subsequent challenge of managing a company and delivering an incredibly ambitious development programme at the same time.  At his disposal was a culturally and nationally diverse, largely expat workforce all with different notions of how to behave in commerce.  At the same time John needed to manage the expectations of the Emirati ruling elite. On top of all that Aldar needed some serious upgrading in terms of basic business processes and systems – it had, after all only been in existence for four years.

John recounted a number of humorous and frankly scary anecdotes about situations he had dealt with in the development phase, culminating in the exhilaration and relief of delivering the F1 Track on time. He told the audience that his keys to success were hands-on management, intense focus on and sensitivity to the cultural differences in his teams and establishing good business practices, processes and commercial behaviours.

While John was refreshingly honest about the frustrations and difficulties encountered he also emphasised the phenomenal spirit, hard work and sheer enterprise that his team, contractors and the workforce showed in making sure that key projects were delivered on time – a true 24-7 culture. John’s optimistic view also hinted at the potential for Abu Dhabi, especially that of a thoughtful, talented outward-looking Emirati leadership group that has a clear line of sight on building a nation that will be about much more than oil wealth.

There followed a lively bunch of questions ranging from the impact of the Arab uprisings to to the sometimes novel approach to planning control in the UAE.

Everyone agreed John was a breath of fresh air as CEO’s go and we’d had a realistic and rare insight into the opportunities and pitfalls of doing business in the UAE.

Ben Bolton MD of Gracechurch will be taking part in the panel session at the London Market Claims Conference 2011  (www.the-insurance-network.co.uk/lmc2011.aspx). Claims service is increasingly becoming a differentiator for P&C insurers;  technology and process change, coupled with improving personal claims service for brokers and clients is supposedly improving the reputation of individual insurers and the market as a whole.   This event will explore the current and future landscape of claims in the London insurance market, examining ‘initiatives and innovations that will improve claims process and performance for the industry and clients alike.’  Ben, along with other leading London Market figures, will be commenting on and discussing issues around claims performance and in particular the most effective metrics for measuring claims teams’ performances.

Following our sponsorship of the British Printmakers exhibition at Bankside Gallery we have added another print to our small collection:

the title of work is “Smithfield”, (appropriate given where we are located), by Michael Kirkman.

Michael completed his MA at the Royal College of Art in 2010.  ’Smithfield’ is in a very small edition of only 5 and is a hand printed reduction lino print. Michael has had several commissions with people such as Faber + Faber, the National Theatre and is becoming very collectable. One of the 5 of these Smithfield prints was recently purchased for the Palace of Westminster Collection.

Our print was purchased from Emma Mason British Prints in Eastbourne:  emma mason specialise in original prints by British Printmakers working from the post war period to the present day.  The site and gallery are definitely worth a visit:  http://www.emmamason.co.uk/index.php

We’ve been working for the past five months on a major new study in the insurance sector, Underwriter Performance Monitor.  This substantial and high quality study will create understanding of London Market underwriter performance overall plus drill-downs into business classes.

The study uses advanced methods to understand what really drives performance and to show how service links to the the business that underwriters are shown by brokers.

One of the challenges for our researchers was to understand what drives performance – without this the research would have been difficult to use practically.  We have however found strong correlations between service performance, advocacy and future spend – so much so that we believe that this will be groundbreaking research for underwriters. And those who act on its findings will be the ones who successfully grow and thrive.

The study shows service performance is strongly influenced according to the ability of underwriting teams to create durable relationships.

There are substantial opportunities for commercial insurers to improve service and key account management, and to ensure they see the quality business from brokers they trust, no matter where they are in the market cycle.

The study is being delivered to our foundation clients in the last week of March and will be updated toward the end of the year.  From 2012 it will become an annual study, with significant scope for expansion into new geographies and specialist business classes.

Does London have a future?  A challenging question. And one that our guest speaker, Stuart Popham, addressed at our 4th Cellar Club event.

Stuart entertained us with a brilliant and thought-provoking description of London’s path to success – from its  founding by Brutus of Troy – to its present day profile as a leading services centre.  The statistics are compelling;  85% of London’s workforce is employed in the services sector, the highest of any capital city in the world, 100 of the Fortune 500 companies are based in London, as are 4 of the 6 largest law firms and 2 of its universities are in the top ten in the world.  Notably, two million of the 7.6 million residents were not born in the UK –  so London is truly a hub, a gateway to, and magnet for, the rest of the world.

But is London’s success sustainable?  Stuart posited two future scenarios;  the depressing first, a City in decline, with immigration restricted, tax breaks removed and Financial Services companies gradually drifting away to other more welcoming locations around the globe:

“A strand of the fabric of London is pulled and the tapestry of the talent starts to trickle away and buyers and sellers start to set up in another place as they try to attract customers…”

The second more positive scenario is of a City which recognises and promotes its strength as a services hub – not in the commoditised areas (we can’t compete with the workforces of India or China) but a centre of excellence for setting standards for the rest of the world in key services sectors – engineering, law, accounting, media & creative and financial.  Achieving this will enable London to continue to attract the best talent and create demand for the workforce on projects all around the globe.

Stuart prompted the audience to discuss  likely outcomes, but before doing that he prevailed upon Government and other opinion leaders to recognise and understand the services industry and not to opt out of vigorously competing with other Cities who want to take what London has.

Stuart’s reputation precedes him and this subject obviously appealed,this being the best attended Cellar Club event yet. It was again held in the Vaults at the RSA – a venue appropriately redolent of London’s history.

Stuart Popham has been described as ‘the most connected lawyer in the City’:  he recently retired as senior partner of Clifford Chance and is currently Chair of TheCityUK, which represents the UK financial services industry.

The Cellar Club is a regular networking event run by Gracechurch, attended by opinion formers and senior decision makers from major financial, professional and advisory businesses.

This is an interesting comment from the Times:  our own reputation study highlights which PE firms have the best and worst reputations among investors and the reasons why:  it will be interesting to compare the fund raising success in 2011 with the reputation data?  Watch this space…

Party’s over for private equity

How are the mighty fallen. In 2007, private equity firms raised $700 billion and bragged that any UK company, even Royal Dutch Shell, could face a private equity bid. Last year, investors put in just $225 billion, according to research house Preqin, the lowest since 2004.

With many firms now close to the end of their funds, 2011 will be a crunch year. In London, there are glimmers of hope. BC Partners — whose reputation was only slightly tarnished by its disastrous investment in Foxtons — is said to be on course to equal its previous €6 billion fund. And there are hopes that Apax, which is looking to raise €11 billion, will lead a revival this year. But even if these top firms succeed, the industry must be facing a massive shake-out The Times Jan 7th 2011

It’s not always easy to position professional services businesses…

…maybe we’ve been missing a trick?

Last night we hosted the third of our Cellar Club events – this time in a new ‘Cellar’, the rather impressive vaults at the RSA.  For those of you who asked, the vaults were originally designed as river-front warehouses, presumably by John Adam himself.

Despite our own team being decimated by the rather nasty ‘flu virus going around,  we had a good turnout with colleagues from law, insurance, property, recruitment, accounting, media and financial services represented.  Everyone I chatted with seemed to be busy and cautiously optimistic about the business environment.

Giles Watkins*, from Concentium was our speaker.

His excellent talk on privacy matters was a relaxed (but slightly scary) walk through the world of privacy – in particular how businesses need to be aware of and prepared for the risks of privacy breaches and the increasing vigilance and often severe responses of lawmakers  to such breaches.  Giles cited a number of recent examples of businesses sustaining substantial fines and reputational damage following  almost ‘accidental’ leaks of customer information – incidents that could, seemingly happen to any business at any time.  He also pointed out that there is little consistency across jurisdictions as to how these breaches are regarded by law makers.

Giles finished on a positive note by saying that he believes that ultimately the approach you take should be common-sense based but that businesses can benefit from being prepared through increased brand trust and capability for dealing with complex data issues in a more innovative way.

Thank to all for coming:  our next Cellar Club event will be happening in March 2011 – details to be announced soon.

Ben

*Giles recently founded Concentium, a boutique advisory firm operating on the boundary of business and technology helping organisations to close the chasm between the two. Before Concentium, Giles had a 21 year career in top-tier consulting with Ernst & Young, founding and leading Ernst & Young’s Technology Due Diligence and Post-Transaction Advisory practice, which became the largest such practice in the world.