- Modernisation Programme Realising Benefits Across the Board
Co-operative Insurance Society (CIS), part of the major banking to insurance group Co-operative Financial Services (CFS), has today, 18th July, announced that it is fully on target to realise all the benefits from its modernisation programme, and that many changes already implemented are realising benefits ahead of schedule.
The two year programme announced last year was a direct response to market and economic changes and is designed to ensure CIS's future as a profitable and growing operation with a distinctive customer service proposition.
A summary of progress to date and activity planned under each of the core areas is listed below:
Reduce CIS's overall cost base.
- CIS's Programme originally envisaged that financial benefits would only start to materialise properly in 2006, however, significant financial benefits are already being achieved and to date almost GBP30million of annualised savings in expense and claims costs have been secured.
- New business volumes are ahead of expectations for both CIS's Life & General businesses. This combined with the cost reductions is having a positive impact on underlying profitability.
- To date in CIS there has been a net reduction of over 1,560 full-time positions through a combination of recruitment freezes and redundancy. With proposals already announced CIS expects this figure to increase by a further 970 by the end of 2006.
Improve the effectiveness of the CIS financial adviser salesforce.
- A new streamlined salesforce management structure is being implemented with any displaced managers offered roles within the Financial Adviser network where no redundancies are planned.
- A new sales support structure with the development of 18 regional sales offices for Financial Advisers is being created throughout the country.
- The removal of administrative tasks and collections from Financial Advisers is being undertaken which will provide them with 50% more time to advise customers on their financial planning needs.
- A revised remuneration structure, which includes buying back the Financial Adviser's Book of business is to be implemented.(1)
- A major investment in technology which will provide advisers with new laptop and point of sale equipment.
- CIS has taken the decision to proceed fully on this basis and to implement all of the above proposals. CIS has fully considered all options following a recent union ballot where a majority of advisers rejected the proposals, but has concluded that the only means of ensuring the long-term viability of this sales channel is full implementation of these plans.
Increase CIS's sales capabilities across other channels
- CIS home and motor customers can now renew and make changes that occur during the term of their policies direct through the CIS Customer Contact Centre.
- By the end of 2005 new motor and home policies will be available via the CIS Financial Adviser Salesforce, Co-operative Bank Branches and direct via the internet or through the CIS Customer Contact Centre.
- CIS is also exploring further National Partnerships to support the existing and successful arrangements already in place with the AA and Budget.
Investigate Third Party Products & Services
- CIS has already announced the appointment of AXA REIM to manage its
GBP2.5 billion investment property portfolio, the largest deal to date within the UK financial services marketplace.
- In the coming weeks CIS expects to announce the appointment of four further external fund managers to manage its GBP900 million overseas equities portfolio.
- CIS also intends to announce shortly the appointment of a Third Party Products partner to provide additional products for its Life & Savings business.
Major investment in customer service
- CIS is investing heavily in terms of recruitment, training and technology within its Customer Contact Centre in Manchester. This will enable 80% of all customer enquiries to be dealt with at the first point of contact by the end of 2005.
- Specialist customer support areas for both CIS's Life and General businesses are now in place to manage more detailed and technical enquiries with further process improvements planned for the remainder of this year.
- A new operating model is in place for CIS's General Insurance Claims Operation which will ensure its leading reputation is maintained going forwards.
- Major investment in technology which will include the imminent launch of the most sophisticated and dynamic underwriting system in the UK motor insurance market, and mean cheaper price quotes for up to 70% of customers.
Commentary from David Anderson, Chief Executive of Co-operative Financial
"Over the past 12 months CIS has delivered many of its plans and hence realised many benefits well ahead of target. A real momentum has been created which will increasingly see CIS play its full part in the future development and success of CFS.
"Whilst change is not always easy for some to accept, it continues to be necessary if we are to compete effectively in our market place, and provide what is fast becoming a truly compelling co-operative service for our customers.
"Although we are introducing new service options for CIS customers our financial adviser salesforce remains an integral and fundamental part of our plans for the future. By continuing to successfully bring savings, insurance and investments to millions of people from all kinds of social groups, they are not only continuing to deliver on our co-operative agenda, but that of the Government's as well.
"This ability has clearly not been lost on those financial services providers who have approached us in the past months with a view to distributing their products through our salesforce.
"We also acknowledge our salesforce proposals were not accepted by the majority of union members in their recent vote, but we believe these proposals are the only means of securing a long-term and viable future for this channel.
"By implementing these plans we will also be making a major commitment and investment in our salesforce, which itself demonstrates our confidence and belief in a channel that has been totally abandoned by our main competitors."