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January 2011

Document type. Date. WORKING DRAFT. Last Modified 8/12/2009 10:53:33 PM Eastern Standard Time. Printed 7/30/2009 2:29:07 PM Eastern Standard Time. January 2011. Catastrophe Team Management. An Insurer’s Perspective. PCS Catastrophe Conference May 2011.

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January 2011

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  1. Document type Date WORKING DRAFT Last Modified 8/12/2009 10:53:33 PM Eastern Standard Time Printed 7/30/2009 2:29:07 PM Eastern Standard Time January 2011 Catastrophe Team Management An Insurer’s Perspective PCS Catastrophe Conference May 2011 This document has been prepared by Chartis for informational purposes only. It is intended solely for INTERNAL USE ONLY - NOT FOR DISTRIBUTION OR REPRODUCTION TO THE PUBLIC, THE MEDIA OR TO CLIENTS. This document may not be distributed to any person who is not an employee of AIG. This document has been prepared by Chartis for informational purposes only. It is intended solely for INTERNAL USE ONLY - NOT FOR DISTRIBUTION OR REPRODUCTION TO THE PUBLIC, THE MEDIA OR CLIENTS. This document may not be distributed to any person who is not an employee of AIG.

  2. Key points: • Build the right team • What does an insurer’s internal CAT team do when there’s no CAT? • How to put CAT team together when you don’t require a full time team?

  3. Background – Aidan Quinn Now: International Claim Management Consumer Lines – Strategic Planning and Governance Catastrophe support and Reporting/Tracking Previous: Director of Catastrophe Claims – USA Personal Lines Design and Creation of Catastrophe Response Team and Procedures “Other duties as assigned” Regional Claims Manager – South Florida

  4. “The Best Way to Predict the Future is to Invent it” – Alan Kay, (American Computer Scientist 1940- )

  5. The Team Putting the team together requires a unique understanding of the company’s needs. Attention to geography, event-type, local, regional and national BCP, and basic personnel logistics is critical to success. Good hiring techniques make this task easier (creative interviewing, targeted selection, etc) Interview Question #1: If you could do any job what would it be. Don’t answer yet… Consider this: What if…? All jobs pay the same; You’ll be neither rich nor poor; You must remain gainfully occupied and actually DO something for 40+ hours/week; You are able to do the work – Start with the belief that you have the Knowledge, Talent, Skill, Voice, Height, Looks, Ability, Eloquence, Wardrobe, Strength, Wisdom, etc...

  6. The Team Now that your candidate thinks you’re a little unhinged… Interview Question #2: What was the last Book you read? Or What was the last piece of Art or Music that struck you? Or What was the last altruistic thing you did?

  7. The Right Fit is Critical Idle staff problems: Regardless of the pay structure, idleness will lead to frustration and reduced capacity Idle staff will either resent the downtime or learn to love it. Projects that appear to be non-productive or ‘beneath’ the team will serve to demoralize.

  8. Having assembled a group of properly skilled, enthusiastic (and mobile) claims handlers…. What do you do when there is nothing CAT-related for them to do?

  9. Alternative Deployment – Create your own “CAT” Seeking the Correct Alternate Work or Project: Set the Rules Establish parameters for the type of work that suits the Team. Preferences and speed of process are important. Producing a quality product is essential. Decide how you’ll solicit work – write down the process and test it. Let your sources know you own the process and have the final call. Consider a triage process for competing requests – If necessary, be completely discriminatory – no excuses. Let the Team weigh-in on decisions. Caucus with senior management on prioritization expectations. Understand the demands of each Project before you take it on. Establish time frame for delivery and agreed cut and run triggers. Measure the performance.

  10. Alternative Deployment 2 Some Guidelines and What to Avoid: Projects should be straightforward with limited customization or training required. Most of the projects will be claim handling, but don’t rule out creative use of the team. It is OK to utilize the team in distinct groups. (See Rule #1) If you MUST take on a distasteful project be prepared for the fallout. Reward the team. If asked to handle physical files (vs. ECM), do so only if the transmission of files is quick, simple and/or not the only source of the project work. Plan your exit strategy before you enter. (RV) They’re your rules. If it makes sense, change the rules in the middle of the game. Loyalty is critical. Never ask your team to do something you’re not prepared to do yourself.

  11. Measuring Results – Key Performance Indicators • Consider the Metrics that will document progress and performance. • What is important to your “client”? • Remember to measure quality (NPS, CSI etc). • Cycle time – Need to determine what constitutes a cycle. • Track Average Severity. • Validate your Quality of Product. (e.g. Six Sigma/zero defects)

  12. What happens when you’re faced with a CAT before you have assembled a Team? What happens if the CAT is larger than your allocated resources?

  13. Video clip: Sendai, Japan 4/21/11

  14. Finding an Internal CAT Team How to put CAT team together when you don’t require a full time team? Remember the Customer. Refer to your Cat Team Building methodology. Consider the nature of the CAT, and design your ideal team. Deconstruct the personality and skill set and find common traits in the potential candidates. What entity or group has much to gain or lose? Consider the strategy for response before you consider the candidates. Seek out underutilized staff. Address compensation challenges for the temporary team. Consider alternate ‘leaders’ to capitalize on the existing hierarchy. Locate ex-claims staff (e.g. Japan – annual event to keep staff primed) Blend inside and outside teams to maximize results. Remember the customer – Measure your results.

  15. Summary Build your team with Key elements in mind: This is not conventional claims handling – you’re not looking for ordinary staff. Set realistic expectations - Don’t underestimate or overestimate your resources. Get creative. There is no “normal” in CAT claims. Be Flexible – But keep certain rules sacred. Keep your team occupied during “down time”: Set up a well defined plan with rules that support your team’s quirks. Be prepared to modify the rules on the fly – They’re your rules. Know your sources/clients and anticipate their needs and demands. Measure results. Find an ad-hoc team when there is a need: Look to under-utilized staff that will benefit from the involvement. Consider ex-claims staff. Blend inside and outside – using inside to act as coordinators/managers. Remember your customer (the CAT-impacted insured). ###

  16. “When it comes to the future, there are three kinds of people: Those who let it happen, Those who make it happen and Those who wonder what happened”- John M. Richardson, Jr. , (American Academic, 1938-)

  17. Thank You Aidan Quinn, Vice President Consumer Lines Claims Chartis International 32 Old Slip 6th Floor New York, NY 10005 aidan.quinn@chartisinsurance.com Please Note: the opinions and comments presented today are not necessarily the official position of Chartis Insurance Inc.

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