Category Purchasing
Interim Management Case Study:
Financial Services

Industry

Financial Services

Client

Very large merger of household and commercial insurance providers.

Scope

Loss adjusters are firms of professional "honest brokers" which act between insurance companies and policy holders to manage the settlement of the high value claims which are therefore beyond the normal scope of insurance companies' first-line call-centres. The client also employed almost sixty loss adjusters which it considered to be "non-core" and wished to outsource.

Savings Delivered:

• £XXm (formal business case independently verified by Finance)

      

Background to Interim Purchasing Management Assignment

Following the merger of two market leading insurance businesses a formally managed (Prince 2) purchasing synergies programme was launched to deliver savings of £ 100m. One of the key elements in this delivery programme was the purchasing of nationwide commercial and household Loss Adjuster services.

Sponsors

• Director of Purchasing

Purchasing Interim Management Role

• Purchasing Manager: Commercial & Household Loss Adjusters

Key Activities as Interim Purchasing Manager

• Developed long-list of firms of loss adjusters with a mix of capabilities
• Used team-based approach to review and compare capabilities of long-listed loss adjuster firms
• Developed an understanding of the loss adjusting industry's view of how supplier relationships had been managed historically by the insurance companies
• Developed consensus for short-list in intensive timescale
• Organised team to audit the capabilities of short-listed loss adjusters (Capability Analysis) from the inside, to compare presented capabilities with actual "on the ground" performance
• Worked with loss adjuster firms to develop programmes of initiatives to deliver savings target
• Organised workshops with leading loss adjuster firms to develop an objective means of comparing claims management performance across all loss adjusters; an industry first
• Selected final panel of loss adjusters from audited short-list
• Introduced independent and objective performance measurement system to track savings
• Working with Contract Manager supported the drafting of contracts for loss adjuster firms
• Negotiated fees and contracts with selected loss adjuster panel
• Wrote business case justifying saving
• Obtained independent approval from Finance for saving
• Positively supported the induction of the new permanent Head of Loss Adjuster Purchasing

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