Insurance Services Framework Agreement – RM958

1. Insurance Services Framework Agreement – RM958 Improvement and Efficiency West Midlands Insurance Showcasing event 15th March 2013

2. Agenda • Introductions to GPS, ESPO and Pro5 • Market Engagement and Procurement Background • Framework Overview • Lot Overview & Call Off Process • Guidance Pack • Next Steps • Questions and Answers

3. Welcome and Introductions

4. Government Procurement Service • Play a key role in the delivery of the centralised procurement strategy, providing significant and sustainable savings for the taxpayer through centralised sourcing, category and data management. • GPS work closely with senior stakeholders in Central Government Departments and across the public sector, implementing policy to deliver savings and drive efficiency • 2011/12 GPS managed £8.4bn of public sector spend and delivered combined price and demand savings of £759m (excluding consultancy & contingent labour (CCL) demand) • http://gps.cabinetoffice.gov.uk

5. Eastern Shires Purchasing Organisation (ESPO) • We are……….. • One of the largest local authority buying consortia in the UK • Publicly owned by a joint committee of seven Local Authorities • Operate on a not for profit/self financing basis • Our goals are to………. • To facilitate the supply of goods and services to schools and other public sector bodies throughout the UK cost effectively • To maximise buying power and value for money by collaborating where appropriate • To make it easy for our customers to comply with public procurement rules http://www.espo.org/ 15/09/2014 5

6. ESPO Experience of Insurance Purchasing • OJEU processes (time and cost implications) • Usually ‘open’ procedure • Project group approach • Single authority or small collaboration • Whose T’s and C’s? • Interest usually from the direct insurance market • Usually one or two bids • Missed opportunities • Outcomes depended on…….. • The starting point • The cyclical nature of the insurance market 15/09/2014 6

7. Pro5 • The Pro5 group represents the four largest professional buying organisations in the UK and is committed to producing leading frameworks to benefit the whole of local government, with a combined spend of over £2bn per annum. • The Pro5 group are: • Central Buying Consortium (CBC) • Eastern Shires Purchasing Organisation (ESPO) • North East Procurement Organisation (NEPO) • Yorkshire Purchasing Organisation (YPO) • http://www.pro5.org/

8. Pro5 Working Together • Fleet – Purchase of electric vehicles (20) • Business services – Staff benefits (319) • Education - Outdoor play equipment (115) • Energy – Voltage reduction/optimisation (438) • Facilities Management – Washroom services (239) • Food – Catering services (704) • Furniture - Kitchen units, worktops and sink units (99) • Social care – Electronic home monitoring/scheduling (394) • http://www.pro5.org/ 15/09/2014 8

9. GPS & Pro5 Partnership • Background • Memorandum of Understanding (MoU) • Removal of duplication • Efficiencies and efficiency savings • Ease of use for Customers • Access to customers

10. Roles and Responsibilities

11. Market Engagement & Procurement Background

12. Market Engagement • Prior Information Notice issued April 2012 • Insurers and Insurance Brokers • Support service providers • All suppliers received the same presentation/message • Suppliers provided comments on lotting strategy, Terms and Conditions and specifications

13. Stakeholder Engagement • Varied and well established stakeholder group assisting the project with representation from Councils, Police, Fire to Central Government • Managed by the partners • Consultation on specification on key elements e.g. Specification and evaluation scheme • Participation in tender evaluation • Updated on project progress by partners 15/09/2014 13

14. Procurement Background • Open procedure utilised • Open to any public sector body within the UK from Academies to County Councils • Framework duration (years) 2 + 1 + 1 • Estimated OJEU spend £850m

15. Framework Overview

16. Framework Overview • Go live 25 February 2013 • Call Off contracts specific to insurance category • Customer can deal direct with insurer or via a broker • Ability for insurers to decline to quote • Standard documentation (market presentation ,claims reports and confirmed claims experience) • Support services • Framework agreement reference RM958

17. Framework Overview Continued • Long term agreements up to 5 years • eAuction used to conclude lot 3 (single supplier insurance brokerage) • eAuctioned enabled for further competitions • Up to 30 June 2013 any broker can access the insurers on lot 1. After this date the lot 2 and lot 3 brokers will be the only brokers that can access the lot 1 insurers

18. Main Headings of Insurance and Insurance Brokerage • Liability • Property & Construction • Travel & Personal Accident • Motor • General • Specialist

19. Lot Overview and Call Off Process

20. Lot Overview • Lot 1 – insurance services – 31 suppliers • Lot 2 – multi supplier insurance brokerage – 11 suppliers • Lot 3 – single sourced insurance brokerage – 1 supplier • See Annex 1 for list of suppliers

21. Call Off Processes • The image below shows the different ways in which a customer can call off via the Framework Agreement:

22. Lot 1 Call Off Process – Further Competition • Further Competition, or through a Framework broker. • When running a further competition, customers will specify their requirement and ask for a policy quote. • Price 40% and Quality 60% (percentages can be varied up to 30% +ve and –ve). • Insurers are able to decline to quote. • Procurement processes (eSourcing suite, emails, other procurement routes).

23. Lot 1 Call Off Process – via a Broker • If a Customer intends to use a framework broker, the broker will be appointed prior to insurers being approached to quote. • Brokers will conduct business with insurers on the framework agreement using standard business processes. However brokers must provide the information to all capable insurers (including direct) that have stated they can provide the particular class of insurance.

24. Lot 2 - Call Off Process – Direct Award • Further Competition, or through a Direct Award. • Customers wishing to procure a broker on Lot 2 via Direct Award must be able to demonstrate that this is delivering value for money. • Tendered prices must be used (i.e. there is no scope for a broker to lower prices to ensure business if a customer is using the Direct Award approach). • To direct award, customers will simply email you their requirements, quoting the Framework Agreement reference number of RM958.

25. Lot 2 - Call Off Process – Further Competition • If procuring a broker via Lot 2 using a Further Competition, a customer will develop all Tender documentation, and send out to all capable brokers. • Procurement processes (i.e. eSourcing suite, emails, other procurement routes) • Price 30% and Quality 70% (percentages can be varied up to 30% +ve and –ve). • Customer can define different pricing models if running a further competition (i.e. annual rate, per instead of a daily rate) if they wish. • Brokers can lower prices at Further Competition stage if they wish. • Once appointed, the broker will support the Customer, and approach the insurers on Lot 1, as per normal business practices.

26. Lot 3 - Call Off Process – Direct Award • A Customer can only call off Lot 3 (single supplier insurance brokerage) via a Direct Award. • The customer will contact Aon UK Ltd with their requirements. • Aon UK Ltd will then support the customer, and approach the insurers on Lot 1, as per normal business practices.

27. Framework Specifications and Call Off Contracts • Specification key points: • Market presentation • Support services • The Insurer must provide complete and accurate policy documentation by the policy start date or within 30 calendar days of inception of the Policy • Claims reports to be sent no later than 90 days prior to expire of current period or within 30 days of a customer request

28. Framework Specifications and Call Off Contracts • Specification key points continued: • Confirmed claims experience for live contracts to be sent no later than 60 days prior to expiry date • Call off contract process

29. eSourcing Suite Training • Training plan for 2013 on the eSourcing Suite for the further competition process • http://gps.cabinetoffice.gov.uk/news/esourcing-suite-training-new-dates-added

30. Guidance Pack & Next Steps

31. Guidance Pack • Toolkit Guidance • Supplier matrix • Non-Disclosure Agreement • Decision tree matrix • Further competition templates • Call-off templates

32. Next Steps • 1:1 meetings • Case studies • Regular communication

33. Question & Answers

34. Contact Information ESPO Richard Skelton 0116 294 4010 r.skelton@espo.org http://www.espodealingdirect.org/ • Government Procurement Service • Jade Rawlinson and David Pyle • 0151 672 2348 / 2164 • insurance@gps.gsi.gov.uk • http://gps.cabinetoffice.gov.uk/contracts/rm958

35. Annex 1 Framework Agreement Suppliers

36. Lot 1 – Insurance Services • ACE European Group • AIG Europe Limited • Allianz Insurance PLC • Amlin UK Ltd • Aspen Insurance UK LTD • AssuranceforeningenGard – gjensidig • AXA Art Insurance Limited • Barbon Insurance Group • Catlin Underwriting • Chubb Insurance Company of Europe SE • Ecclesiastical Insurance Office • Gard Marine & Energy Försäkring AB

37. Lot 1 – Insurance Services Continued • Groupama Insurance Company Ltd • Groves John & Westrup Ltd • Hiscox • International Transport Intermediaries Club Ltd • JLT Public Sector Risk Practice • Mitsui Sumitomo Insurance Underwriting at Lloyd’s Ltd • Motor Accident Protection Services Ltd • Northern Marine Underwriters Ltd • Ocaso SA Seguros y Reaseguros

38. Lot 1 – Insurance Services Continued • QBE Insurance Ltd • Risk Management Partners Limited • Royal & Sun Alliance Insurance plc • Summit Insurance Services Ltd • The Shipowners Mutual Protection and Indemnity Association (Luxembourg) • Thistle Insurance Services Ltd • Tokio Marine Europe Insurance Co Ltd • Travelers Insurance Company Limited

39. Lot 1 – Insurance Services Continued • TT Club Mutual Insurance Limited • Zurich Insurance plc

40. Lot 2 – Multi Supplier Insurance Brokerage • Aon UK Limited • Barbon Insurance Group • Brian Johnston & Co (Insurance Brokers) Ltd • Gallagher Heath trading as Heath Lambert • Griffiths & Armour • JLT Public Sector Risk Practice • Lockton Companies LLP • Marsh Ltd • Portmore Insurance Brokers Ltd • Thistle Insurance Services Ltd • Willis LTD

41. Lot 3 – Single Sourced Insurance Brokerage • AON UK Limited