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RiiG Limited CEO, Gordon Vater, talks to Modern Claims Magazine

First published in the May 2015 issue of Modern Claims Magazine.

Modern Claims Magazine

Charlotte Parkinson, Modern Claims, spoke to the CEO of RiiG Limited to find out about managing change in an evolving market and what makes the RiiG business model stand out.

Q: How has your position as CEO of RiiG changed since the management buyout in 2013?
A: My focus is now on innovation and driving forward new concepts and business opportunities. We have an incredibly supportive and ambitious investor, along with a management team who own a chunk of the business. With their support, and a great team behind me, I have been able to set up a specialist claims recruitment business, APT. RiiG is also getting to grips with the talent issues facing the industry. We’re tackling this head-on with the launch of our new initiative, Claims Academy. We always said we wanted to “Change Claims Forever”. Now we have that opportunity.

Q: You are predominantly responsible for Operations and Business Development activity; what does a typical day involve?
A: I am not sure I would be in claims if I wanted a typical day! Days can be hugely varied involving travel to our project sites, meeting with current and prospective clients, seeing fellow CEOs; either in the industry or outside - I find that it useful to get their take. There are inevitably some office days spent catching up with the team and doing admin. My role is to articulate our vision internally and ensure operational managers and teams have the opportunity and the ability to deliver it. I operate by the mantra “Why we are doing it?” My teams are hugely successful in the “How are we going to do it?” Fundamentally, my role is people-focused.

Q: What are the key issues around change management for insurers/claims handlers and why?
A: Smaller insurers appear to manage change effectively. They are agile and respond quickly when disruptive events force change. It’s often the larger organisations that experience issues with change. They tend to be cumbersome, bound by outdated process, with resource challenges. Therefore, they are slow to react to and embrace change. We are in an age where change has become a constant. Insurers’ response to change is reactive rather than proactive. The industry doesn’t look far enough ahead. Customers and regulators are driving the insurance agenda. In most cases that is fine, but some organisations are tripping over themselves as they fight to keep up. For example, we were involved in a project that saw four Claims Directors come and go in the space of 14 months. Each had their own views and agendas. The end result was a confused claims operation. The front line handlers were trying to juggle various change initiatives. Do you think they were motivated? Do you think customers were happy? Probably not. With any change programme, we [the industry] have to be better at articulating the vision. We need to communicate it effectively and ensure that our people have the skills and capability to execute the programme. Then it’s about having the courage to see the idea through. There is too much tinkering that leads to confusion. Finally, our industry can be notorious for taking an idea and using it as the panacea that will resolve our issues. We take it, make changes within our business, state the benefits that will be delivered and then, when they don’t come through – we change again.

Q: RiiG advises the insurance and financial industries; what are the similarities and differences between the two markets?
A: We provide a wide range of services to UK general insurers and currently, PPI claims services to UK retail banks. The main difference is in terms of scale. In the PPI claims world tens of thousands of people are involved in resolving PPI claims. A complete new industry of handler was created. In my experience, the general insurance market may not have such scale, but it has a better capability in terms of skill set. Another clear difference is speed. In our experience, dealing with the banks has been very quick. Some general insurers take too long to decide what they want to do and how they are going to do it. Banking operations are more open to our thoughts and ideas. General insurers tend to be a lot less flexible and less open to new approaches to handling claims, although we are starting to see a change here. Both industries want the best for their customer and that is evident. In the digitised world, the banking industry is ahead. It has sophisticated and automated distribution and communication channels with customers, often with a self-service capability. This is coming in the general insurance sector, but it is playing catch up. Finally, there are much more established routes for attracting young blood and new talent within the banking sector. The insurance sector lags behind. It is still seen as the poor cousin in terms of desirable careers, even after all the bad press that the banking sector has suffered. The insurance industry has to sell itself more as a viable and worthy career option. Through our initiatives, we have found kids to be very receptive.

Q: Have recent pressures on CMC’s from regulators affected RiiG in any way?
A: In reality, no. We are not a cold calling set up. We have always been engaged by general insurers and banks, which have always had suspicions and concerns around some CMC operations. Our involvement has always been to handle cases and ensure fairness to all, so we haven’t seen a huge change from our existing business.

Q: RiiG provides outsourced solutions on an insourced basis, how does this work?
A: Our implant (iteam) teams were born out of a request by an insurer to outsource cases to us, but have the team within their claims operation. It is a very simple concept. RiiG claims consultants operate in project managed teams across the UK. When an insurer engages with us they have the option to have the outsource operation on our premises or their own. In the main, we find that if a client can locate a RiiG team within their operation, they will do so. We use the client IT system so there are no integration issues or rekeying of information. The benefits of locating our highly skilled teams of consultants within the client business are significant. Invariably there is a form of knowledge sharing by osmosis. Our experienced personnel pass on a great deal of knowledge to more junior client colleagues. It gives the client flexibility and ensures visibility over what we do. In many cases, we are inserted into ‘stressed’ situations with high workloads. The RiiG teams are usually welcomed by the client’s staff and as a result their management benefit. What we then find is the client will ask us to look at their claims operation. We provide advice on and support into how it can be changed and improved upon. This can then involve the delivery of training, coaching and mentoring, or major reengineering.

Q: Is the insurance sector an attractive proposition to young people and is the sector as a whole doing enough to safeguard its future? Why did RiiG establish its APT arm?
A: Recently, I was lucky enough to be invited to a 6th Form College on the South Coast to give a presentation to school leavers not wishing to go to University. The event was attended by other employers; Nestle, KPMG, EY, the Army and the RAF. Because I was travelling from Bristol, I had the last shift of the evening. I wasn’t sure there would be many people left when I arrived, but over 100 students and parents were still waiting to hear from ‘the insurance man’. The feedback from them had a common theme: “We never knew that about insurance; claims is really interesting; can you tell me more about the opportunities?” The fundamental challenge for our industry is getting the message out. Youngsters believe that they have no interaction with insurance and claims. Their parents don’t know anything about it. But, when you start talking to them about how integral it is to their lives - no buses would run, no planes would fly, no schools would open - they start to get it. I think our industry has done a great deal. For example, initiatives like ‘Discover Risk’ run by the CII have played an important part but we still have work to do to raise the industry’s profile and attract new talent. That work, I believe, has to be down to employers. We have to put in place a framework that attracts these individuals. It’s not just a clear career framework that’s needed, but also an attractive financial package. We need to compete with other more established career routes. As an industry, we have a fantastic opportunity to get more talent. After all, we offer a variety of roles that not many industries can match. Now is the time to act. APT is a recruitment business that operates in the claims space. We set it up initially to serve our own recruitment needs. We wanted to cut our recruitment spend. We also wanted to reduce our reliance on the traditional recruiters who fell short of the claims expertise that they purported to offer. Our clients discovered the offering and asked us to open it up as an external recruitment operation. Clients recognised that we know claims, the market and understand claims recruitment. APT has grown from there. It focuses on the claims market and now offers services internally and externally. We have big plans for it.

Q: What are the greatest pressures/challenges for your business at the moment and why?
A: Talent is by far the biggest pressure. My business relies on quality people with good skill sets and levels of experience. Unfortunately, the industry historically segmented the claims process and lost a great deal of experience as a result. This experience was not replaced. Now the industry needs new blood in order to grow. Our Claims Academy initiative will be critical in the search for new claims talent, both for RiiG and the wider industry. Procurement can still be totally price driven and a real battle at times. But, it is a battle that we have not been afraid to walk away from when margins have been squeezed to the point of unprofitability. For a small business in our sector, walking away from business can be quite a brave thing to do.

Q: What is next for RiiG? Does the business have plans for further growth?
A: As a business we want to continue our focus on delivering lasting, significant improvements to our clients and their customers. We also want to be a business that is recognised as retaining and developing exceptional people. We will continue to focus on our key markets: UK claims and financial services. We know that insurance markets across the world face similar issues. Our model is flexible and portable. Our primary focus at the moment is the launch of our Claims Academy. We are targeting school leavers and offering a funded induction to claims, with professional qualifications. This can then be converted to a two year training contract for those who have the right attitude. This initiative will see new blood being trained by claims experts across the core claims areas: motor, property, casualty and specialist lines. It offers real hands-on training. We’re very excited about it. Our discussions in the market have been revealing. A number of insurers have expressed an interest in sponsoring courses and having the opportunity to take on individuals who, for whatever reason, decide to move on from RiiG. In addition, we have entered into dialogue with Local Educational organisations, which have been amazingly supportive. It is a significant investment for RiiG and a strategic decision that is critical to our continued success and our aspirations to grow.