guillaume rosenwald

Guillaume RosenwaldDeputy Managing Director

of insurance activitiesMacif

( France )

Friday, 3 September 2010

MACIFGROUP

From 1960 to the present dayMACIF

Macif established in motor insurance

Chairman : Gérard AndreckManaging Director : Roger IseliHead Office : Niort

8,900 employees

1960

First diversification – home insurance1970

Regionalisation : with over 2.5 millionpolicyholders, Macif is reorganised into 11 mainly autonomous geographical areas

1987

Macif is a group with diversified activities2010

4.7 million policyholdersFrench leader in car and motorcycle insurance

Commitment towards solidarityMACIF

Macif is a mutual insurance company with no intermediaries

Macif is committed to the principles of social economy

It has no shareholders, no need for return on investment

Its policyholders insure each other mutually and are individually insured

Breakdown of Group Turnover (2009)DIVERSIFIED ACTIVITIES

33 %33 %MotorMotor

Health, Disability & Life

42 %

9 %

Savings

10 %10 %HomeHome

Other6 %

5.7Billion €

MACIF GROUPMAIN PROJECTS

Start-up of our banking offer :Start-up of our banking offer :2nd half of 2010

Strategic allianceStrategic allianceMacif/Maif/Caisse d’Epargne GroupMacif/Maif/Caisse d’Epargne Group

An offer based on mutualistic principlesAn offer based on mutualistic principles

MACIF GROUPMAIN PROJECTS

Creation of a partnership (SGAM) between Creation of a partnership (SGAM) between Macif/Maif/Matmut : Macif/Maif/Matmut : SferenSferen

perpetuate the mutual insurance model

reinforce our position and our competitivity

In order to :

Signature of the SGAM’s Articles of Association and Membership Agreements

December 2009December 2009

Approval by the Insurance Companies’ Committee February 2010February 2010

Approval by the Office of Fair TradingJune 2010June 2010

MACIF GROUPEuropean partnership with mutuals

Direct settlement agreements in France

Guillaume RosenwaldDeputy Managing Director of insurance activities, Macif France

12th Hydra meeting 3.9.2010

3.9.2010 12th Hydra meeting – G. Rosenwald10

1/ Direct Settlement Agreement objectives.

2/ Requirements for an efficient and long-term agreement.

3/ Three examples in the French market

- Motor insurance material damages (IRSA)- Home insurance water damages (Cidre – Cidecop)- Motor insurance light bodily injuries (IRCA)

4 / Direct settlement and market of insurance

Direct settlement agreements in France - IndexPages

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Improve claims settlement services, time, quality and innovation.

Simplify processes and saving operational costs.

Control of claims costs

1/ Direct Settlement Agreement objectives


Economy :- Approaching cost neutrality,- Market statistics - Transparency /costumers.

Legal :- Respect of EU and national laws,- Taking account of precedents (simplicity and stability of precedents),- A very low demand to sue opponents.

Operational :- very good experts (assessors) in the topic,- high level of trust between the actors.

2/ The requirement of an efficient and long term agreement


o The “agreed accident statement” has been used by she insured since 1964,o First agreement of direct settlement set in 1968 (under pressure of the French government)o Experts’ (assessors) competence and honesty supervised by the Ministry in charge of transporto Clear and precise laws and precedents

1.7 million claims / year

3/ Example 1 : Motor material damages

Context


« Indemnisation et Recours des Sinistres Automobile, IRSA »« Indemnisation et Recours des Sinistres Automobile, IRSA »

Quick descriptionQuick description

Direct Settlement for all material Direct Settlement for all material damagesdamages

Fully computerized Fully computerized exchanges and fixed exchanges and fixed

compensation if 2 compensation if 2 vehicles andvehicles and

damages < 6500 € damages < 6500 €

Precise rules of recourse Precise rules of recourse for all other situation for all other situation

(including pile up)(including pile up)


Exhaustive codification of the accident’s Exhaustive codification of the accident’s situationssituations

Extensive statistical analyses …Extensive statistical analyses …


« Indemnisation et Recours des Sinistres Automobile, IRSA » « Indemnisation et Recours des Sinistres Automobile, IRSA » Benefits :Benefits :

Great value for the insured (quick and high Great value for the insured (quick and high level service)level service)

Simplicity of computing for all the actors,Simplicity of computing for all the actors,

Insured self settlement by internet made Insured self settlement by internet made possible for most of 2 vehicles accidents. (if possible for most of 2 vehicles accidents. (if developed by the insurer)developed by the insurer)

Great freedom of organization left to the Great freedom of organization left to the insurance companies, full benefits for repair insurance companies, full benefits for repair shops agreementsshops agreements



« Indemnisation et Recours des Sinistres Automobile, IRSA » « Indemnisation et Recours des Sinistres Automobile, IRSA » Limits :Limits :

Economic neutrality is imperfect,Economic neutrality is imperfect,

Applies correctly to cars, but trucks are Applies correctly to cars, but trucks are over compensated and bikes are under over compensated and bikes are under compensated.compensated.

(Some insurers specialized in bikes stay out (Some insurers specialized in bikes stay out of the agreement)of the agreement)

Promote the settlement of micro claimsPromote the settlement of micro claims



« Indemnisation et Recours des Sinistres Automobile, IRSA » « Indemnisation et Recours des Sinistres Automobile, IRSA » ConclusionConclusion

Possible next evolution :Possible next evolution :

Fixed compensation depending on the Fixed compensation depending on the type of vehicles.type of vehicles.


IRSA is considered by the French Market IRSA is considered by the French Market as a successas a success


o Creation of “agreed accident statement”o Experts (assessors) corps largely heterogeneous.o Few and imprecise laws and precedentso Low satisfaction from the insured


3/ Example 2 : Home insurance water damages

Context


«Convention d’Indemnisation et De Recours des «Convention d’Indemnisation et De Recours des dégâts des Eaux, CIDRE and CIDECOP »,dégâts des Eaux, CIDRE and CIDECOP »,

Quick description :Quick description :

Direct settlement for Direct settlement for damages < 1600 €damages < 1600 €

No compensation No compensation between insurersbetween insurers

For other cases : For other cases :

conduct of an assessment conduct of an assessment and organization of the and organization of the

recourserecourse


No computerized exchanges,No computerized exchanges,

No statisticsNo statistics


«Convention d’Indemnisation et De Recours des «Convention d’Indemnisation et De Recours des dégâts des Eaux, CIDRE and CIDECOP»dégâts des Eaux, CIDRE and CIDECOP»

Benefits :Benefits :

Simplicity for very small damages.Simplicity for very small damages.

A sensible improvement of satisfaction A sensible improvement of satisfaction from the insured.from the insured.

More frequent management of the More frequent management of the repair by the insurer.repair by the insurer.



Economic neutrality is unknown,Economic neutrality is unknown,

No real benefits for medium damages No real benefits for medium damages because of the delay for drying off,because of the delay for drying off,

Allows poor reparation of the causes Allows poor reparation of the causes and generates repeated claims and generates repeated claims (especially in condominium) (especially in condominium)



Limits :Limits :


Probable next evolution :Probable next evolution :

Better classification of the claims Better classification of the claims situations.situations.

The French Market is largely unsatisfied The French Market is largely unsatisfied with Cidre and Cidecop agreements.with Cidre and Cidecop agreements.

Economically, all the actors are quite Economically, all the actors are quite sure to loose money …sure to loose money …



Conclusion : Conclusion :


o Since 1985 the “Badinter law” forces the liability insurer to offer an “honest” compensation directly to the victims. o Insurers receive automatically the statements made by police for bodily accidents.o More than 95 % of the bodily damages are compensated without trial. (about 99 % for lights injuries),o The medical experts are well organized and use a very clear method of physiological evaluation.o All courts use the same method of economic evaluation but level varies.


3/ Example 3 : Motor insurance bodily damagesContext


«Convention d’Indemnisation et De Recours des Corporels «Convention d’Indemnisation et De Recours des Corporels IRCA (2003) » IRCA (2003) »

Quick description :Quick description :

Direct settlement if partial disablement Direct settlement if partial disablement =< 5 % =< 5 %

Fixed compensation if definitive Fixed compensation if definitive disablement = 0 disablement = 0 Recourse on real costs with a limit for Recourse on real costs with a limit for

other casesother cases

For other cases : For other cases :

conduct of an conduct of an assessment and assessment and

organization of the organization of the recourserecourse

No computerized exchanges since No computerized exchanges since inception,inception,

Fully computerized exchanges since Fully computerized exchanges since 1/1/2010, statistics tool in place1/1/2010, statistics tool in place

3/ Example 3 : Motor insurance bodily damages


«Convention d’Indemnisation et De Recours des Corporels «Convention d’Indemnisation et De Recours des Corporels IRCA (2003) »IRCA (2003) »

Benefits :Benefits :

Great value for the insured (quick and high Great value for the insured (quick and high level service).level service).

Large freedom of organization left to the Large freedom of organization left to the insurers.insurers.

Full benefits dedicated to the victim and their Full benefits dedicated to the victim and their family’s help.family’s help.

Strong management simplification for fully Strong management simplification for fully computerized insurerscomputerized insurers



Cost management issue : No real Cost management issue : No real benefits for medium and small size benefits for medium and small size companies who can’t afford to companies who can’t afford to computerize bodily claims,computerize bodily claims,


«Convention d’Indemnisation et De Recours des «Convention d’Indemnisation et De Recours des Corporels IRCA (2003) »Corporels IRCA (2003) »

Limits :Limits :


Probable next evolution :Probable next evolution :

Fixed compensations based on a table Fixed compensations based on a table depending on the disability seriousnessdepending on the disability seriousness

Big and fully computerized insurers are Big and fully computerized insurers are very happy with this agreement.very happy with this agreement.

Small insurers are “perplexed”Small insurers are “perplexed”


«Convention d’Indemnisation et De Recours des «Convention d’Indemnisation et De Recours des Corporels IRCA (2003) »Corporels IRCA (2003) »

ConclusionConclusion


Direct settlement has a real sense if the Direct settlement has a real sense if the quality of the settlement is a quality of the settlement is a

differentiation in the competition.differentiation in the competition.

4/ Direct settlement and the insurance market

Direct settlement allows cuts of cost on Direct settlement allows cuts of cost on the global amount (claims the global amount (claims

+management)+management)

But not always on each separate cost.But not always on each separate cost.

Some statements …Some statements …


4/ Direct settlement and market of insurance

Direct settlement and computerized Direct settlement and computerized exchanges are mainly profitable for exchanges are mainly profitable for

medium and big size firms.medium and big size firms.

But a dominant actor do no need such But a dominant actor do no need such agreement …agreement …

more statements …more statements …


4/ Direct settlement and market of insurance

Direct settlement can succeed on a Direct settlement can succeed on a market if :market if :

- Most insurers manage themselves the Most insurers manage themselves the claims (or by subsidiaries) claims (or by subsidiaries)

- The market is shared between medium The market is shared between medium size companies.size companies.

““My own conclusions”My own conclusions”


Thank You