Service per Capita

Bill Dye has been managing director of Capita Insurance Services for 16 days now. And what a 16 days they have been. First came the news that Churchill had released the loss adjuster from its panel. Then came the shock that the managing director of professional and technical services, Mark Smith, had left the company.

Dye has had to contend with a part of the industry that thrives on intrigue and gossip working overtime. Is Capita moving out of loss adjusting? Did Smith resign because of unrealistic profit targets and how can Capita's reputation recover from the Churchill blow?

These are just a handful of the questions being asked in the industry. And, despite only recently taking the helm, Dye - a tall, sturdy American - steps up to the plate to put the record straight.

So, did Smith leave because he was set unrealistic targets?

"Smith left because he wanted to pursue other opportunities," Dye says.

OK, so what return on capital was someone like Smith expected to produce?

"I can't divulge that, but Capita has realistic expectations," he says.

What about Churchill, surely that was a big loss? Dye explains that Churchill was not Capita's second biggest loss adjusting account, as rumoured. He says they fell out because Churchill was interested in taking control of more of the claims process.

"There was strategic conflict," says Dye.

Finally, what about Capita's future? Will it still be in the market in five years time?

"Sure," says Dye. "I don't know in what kind of form. The clients want and need different kinds of claims services, but we will be there to provide services that settle claims."

Dye joined Capita Insurance Services from the outsourcing giant's life and pensions business. He sat on the board that supervises the general insurance business and so reckons to have hit the ground running. He has a reputation of being good at mergers and acquisitions.

So, does that mean growth by acquisition? Dye gives a long answer that can be summarised as a no. He reckons that Capita will be an organic growth story.

Dye is convinced that the claims management market is ripe. He explains that customers are used to a traditional two-tier system of claims - a technical loss adjusting solution, where a panel is employed; and a high volume, low value claims management service.

Dye argues that Capita is almost the only supplier in the market that can provide loss adjusting and claims management, with the help of its Eastgate brand.

"We can provide innovative solutions for our clients," he says. But one solution Capita is not interested in is international claims. Dye explains that Capita is predominantly a UK-focused company. Reading between the lines, international claims are not a target market. This, it would seem, explains the departures of a dozen high profile McLarens staff over the past year.

So if Capita is here to stay in the general insurance market and in claims, what kind of service provider will it be? Private Eye readers will know that Capita has reputation as an adversarial organisation that is not great at keeping its clients happy. But Dye talks about being a leader and an innovator known for its quality of service - though not at any cost. "Why should a client pay for a quality of service it doesn't need?" he says.

Dye agrees that the key to being a leader and an innovator is technology. But market rumours say Capita has pulled investment on IT projects in recent weeks and months.

Dye looks puzzled when this is put on him. "I know of no projects being cancelled," he says. He goes on to explain that a new IT strategy is being drawn up.

"We have two systems at the moment because of our acquisitions. There are two solutions. We are exploring which option to take," he says.

As head of Capita Insurance Services, Dye also looks after the outsourced underwriting service used by clients such as Abbey National. Is there a conflict of interest between being a loss adjuster and an underwriter? After all, what happens if Capita has a dispute with a risk carrier it uses to service the Abbey National account? Will the Capita loss adjuster fear crossing the threshold of the risk carrier next day?

"Absolutely not," affirms Dye. "We do not have the say over risk carriers. Abbey National has the say-so," he says. n

Capita - a mixed year
September 2002