Hi guys,
I realised that I haven't blogged here for a while.
To refresh our momentum, here's something fresh!
So in the time between the last post and now, I've moved on from an Actuarial role to a Finance role in Claims Decision Support, working on Motor Claims Insurance as sort of a linking agent between the Finance department (who talk budgets, forecasts, expenses, FTE all day every day), and the Motor Claims Assessing Operations (the function that really hit the ground, interact with the customers, get the cars fixed, deal with repairer performance, supplier performance etc etc rubber hits the road).
Because as you've already guessed, they don't talk the same language and getting them into a meeting to have any meaningful conversations be like 'what the?' LOL. Ok let's give some of them more credit than others but the education journey persists.
I've been in Decision Support for 2 years now, from being a rookie who faced the computers doing Incurred Chain Ladders to predict how much the impact of systems migration have affected claims cost, to now being someone who advises on questions like why is our Average Total Loss Cost so low and our Total Loss proportions so high? Is it right? What can we do about it?
In the short 2 years I've also seen a complete overhaul of our claims systems and just about every claims process you can imagine... all done consecutively month after month -- from an actuarial point of view -- this makes performance tracking very difficult as there's not enough time in between events to really gauge the true level of the impact that each change has in isolation from a financial perspective. Especially when there's seasonality.
Every time we look at our claims operations and say that there's inefficiency. So we spend a lot of money overhauling the entire system, restructuring our managerial model... change this change that, but at the end of the day, we seem to just be looking for a bigger bandaid to fix the same wound, which, by now needs surgical attention. If you're looking at a 7-8% (say) higher than general inflation magnitude of cost increase over time... might not be much but including inflation comes to about 10%... that is $400 on a $4000 vehicle repair say... and do it in bulk -- the numbers add up...
We hope for ways to improve costs and expect the new system to fix everything for us.
At the end of the day, after the value that the processes changes are supposed to make and the value of a different management structure -- the underlying issue is still not solved -- and that is because the real leakage of value is in the residual value (i.e. not all those big changes, at least not just) -- but the core of the leakage is in the residual value -- the small things. The micro cost saves on challenging each repairer to do their job properly and charge us a fair amount. Micro cost saves from changing the method of repair
Micro challenging each repairer on every repair quote to ensure that we as an insurance company are paying for the right repairs and the right items are present in the right quote (without random added job scope that are unrelated to the accident). And to be really effective you have to change the culture of your internal staff/assessors to be ice sharp when it comes to scrutiny of each quote and also to adopt the same values & view of operational efficiency as you do and deal with repairers fairly but ruthlessly if they try to play up.
And the ability to ensure that the right decision is done by our internal functions for the end to end insurance value chain in these small things in order that residual value can be optimised so that we have the confidence that our operations are as lean as it can be -- that is somewhat harder and less visible to ensure and track, and a much harder journey to go on as its nature is ongoing.
K.I.S principle still applies -- Keep It Simple. Sometimes, the most value comes out of the simplest solutions. Why is that so hard to believe?
I realised that I haven't blogged here for a while.
To refresh our momentum, here's something fresh!
So in the time between the last post and now, I've moved on from an Actuarial role to a Finance role in Claims Decision Support, working on Motor Claims Insurance as sort of a linking agent between the Finance department (who talk budgets, forecasts, expenses, FTE all day every day), and the Motor Claims Assessing Operations (the function that really hit the ground, interact with the customers, get the cars fixed, deal with repairer performance, supplier performance etc etc rubber hits the road).
Because as you've already guessed, they don't talk the same language and getting them into a meeting to have any meaningful conversations be like 'what the?' LOL. Ok let's give some of them more credit than others but the education journey persists.
I've been in Decision Support for 2 years now, from being a rookie who faced the computers doing Incurred Chain Ladders to predict how much the impact of systems migration have affected claims cost, to now being someone who advises on questions like why is our Average Total Loss Cost so low and our Total Loss proportions so high? Is it right? What can we do about it?
In the short 2 years I've also seen a complete overhaul of our claims systems and just about every claims process you can imagine... all done consecutively month after month -- from an actuarial point of view -- this makes performance tracking very difficult as there's not enough time in between events to really gauge the true level of the impact that each change has in isolation from a financial perspective. Especially when there's seasonality.
Every time we look at our claims operations and say that there's inefficiency. So we spend a lot of money overhauling the entire system, restructuring our managerial model... change this change that, but at the end of the day, we seem to just be looking for a bigger bandaid to fix the same wound, which, by now needs surgical attention. If you're looking at a 7-8% (say) higher than general inflation magnitude of cost increase over time... might not be much but including inflation comes to about 10%... that is $400 on a $4000 vehicle repair say... and do it in bulk -- the numbers add up...
We hope for ways to improve costs and expect the new system to fix everything for us.
At the end of the day, after the value that the processes changes are supposed to make and the value of a different management structure -- the underlying issue is still not solved -- and that is because the real leakage of value is in the residual value (i.e. not all those big changes, at least not just) -- but the core of the leakage is in the residual value -- the small things. The micro cost saves on challenging each repairer to do their job properly and charge us a fair amount. Micro cost saves from changing the method of repair
Micro challenging each repairer on every repair quote to ensure that we as an insurance company are paying for the right repairs and the right items are present in the right quote (without random added job scope that are unrelated to the accident). And to be really effective you have to change the culture of your internal staff/assessors to be ice sharp when it comes to scrutiny of each quote and also to adopt the same values & view of operational efficiency as you do and deal with repairers fairly but ruthlessly if they try to play up.
And the ability to ensure that the right decision is done by our internal functions for the end to end insurance value chain in these small things in order that residual value can be optimised so that we have the confidence that our operations are as lean as it can be -- that is somewhat harder and less visible to ensure and track, and a much harder journey to go on as its nature is ongoing.
K.I.S principle still applies -- Keep It Simple. Sometimes, the most value comes out of the simplest solutions. Why is that so hard to believe?
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