As the youthful claims director of Allianz Cornhill Jon Dye wants a fair deal for claimants and thinks lawyers should be out of the claims loop, but he tells Andrew Holt that he is not a revolutionary
If there was an award for the individual most committed to insurance claims, Jon Dye would be a leading contender. Although many companies would put forward their choice, none would come in at 39 years old, as does the director of claims at Allianz Cornhill.
Dye's career in insurance has been built on claims. He began with Commercial Union (CU) on a graduate training scheme 15 years ago, after graduating in law, and later moved to Chubb. It was his experience in these roles that inspired him.
"In both cases the claims proposition was right up front. At CU it was about having decent underwriters, good claims people and strong relationships with brokers. At Chubb it was, and is, claims led. Allianz is the same.
Claims is a serious part of the Allianz business."
But since taking up his role in 2003, aged 36, at around the same time as Andrew Torrance took over as Allianz chief executive, he admits that he hasn't been involved in a revolution.
"The claims function was in good shape in terms of skills and experience and I have built on that. We haven't been through the merger and acquisitions and redundancies of other companies. So my input hasn't been any major revolution."
But he does support the revolution in personal injury claims set out by the ABI's Care and Compensation initiative which highlights that for claims under £5,000 legal costs amount to 93p for every pound in compensation.
It advocates removing the role of some lawyers.
"If the whole industry gets behind this, it takes a big chunk out of the Compensation Bill and that inevitably flows out into more competitive premiums.
"I support the ABI absolutely. From what the ABI is proposing there is a big cost saving to be achieved and the claimant gets his compensation quicker. Why spend 93p in legal costs for every pound in compensation.
That is a huge amount of money."
Fair compensation
Dye says claimants are safe by trusting insurers. Which will cause huge guffaws within the legal community. "Claimants can trust us to give them fair compensation. We will supply them with rehabilitation in circumstances where that helps them out, the claimants gets their compensation quicker and it means we don't have to pay the lawyers."
On the other side of the fence there is an accusation within some in the market that insurers drag out claims in a more difficult market to avoid payment. "There is no benefit for us to spin out a case, because that just drives up the cost," says Dye fervently.
He is keen, like many a director, to push his company's initiatives that he says will proof the future. This is Allianz's Sustainability Initiative.
This means taking the best of Allianz worldwide and incorporating it into relevant autonomous offices around the globe.
"The group needs to be bigger than the sum of its parts," says Dye. "The idea is you get expertise within the critical companies in the group, and if there is commonality like motor claims, get everything together and map a best practice exercise. We import ideas from around the world and export our own ideas."
Whiplash work
Ideas include the various studies from the whiplash work from German colleagues. This work revealed 20% of whiplash cases could not have involved an injury because factors such as the speed was so low.
"Our view is that some whiplash cases that have resulted in an injury payment are in fact fraudulent. We estimate we have 10% of such cases and that is worth about £5m to us."
Allianz has since won some cases in court in the North West on the grounds of speed. Dye comments: "Insurers don't always get an easy ride (in the North), and we have been able to prove that in fact in such cases there was no injury."
From Australia has come the notion that for more serious cases, Allianz employ multi-disciplinary teams rather than just claims handlers. "We now have medically trained case handlers who work alongside the claims guys and understand the care regime the seriously injured claimant needs.
We are also using these people to quality check the managers we employ externally."
He has helped export Excellence in Claims to other parts of the group.
This is the insurers structured module for claims handlers, and plans are afoot to make this the group model around the world.
"We have already had contact with the training academy in the US and exported it lock, stock and barrel to Australia. It is also being copied in Germany and Austria." This initiative came from Allianz Cornhill's own underwriting academy."
The Sustainability Initiative may sound like clever PR, but there are demands from Allianz Group chief executive Michael Deaton that it boosts profits. For 2007 he has set a target of a cool EUR750m from the sustainability programme alone. "That is a pretty big number," admits Dye.
Beat expectations
"From our position here in Allianz Cornhill claims, our contribution is £15m in 2007. We are half way there and ahead of where we should be." In 2005 Dye and the team beat the expected £3m, and in 2006 he is ahead of expectations, based on first quarter figures.
Dye is also keen on training in line with Allianz's emphasis on excellence.
In this regard Allianz has gained prior learning accreditation from the CII. "This is an external validation of our training and product. The CII does not give this unless you are at a level of a professional examiner."
But what if people leave? Allianz has been in a position where it has spent time and money only for workers to move on. "If we invest in the skills of our people they will make better decisions and make more money," says Dye. "The cost of us training people for the benefit of the industry is a cost we are willing to bear."
Is the industry, and particularly the CII, doing enough? "The war for talent is very necessary because there is not enough talent in the industry.
We built Excellence in Claims because we knew we need to grow our own."
So what about the future? Does he see himself replacing Andrew Torrance as chief executive one day?
"I suppose I am relatively young. For now I have my eyes very much on the claims function being the best in the market," he says diplomatically.
And with this aim, he says he is only half way there. "You have to take these things one step at a time. We are nearly three years down the path.
I wouldn't say everything is perfect. We are half there and we are talking about 600 people working in different areas of the business and it is a very challenging time in the marketplace."
