Client: Insurance group
Background
In the age of digitalization, speed has become the measure of all things. This is particularly true for products and services in the insurance industry. Hardly a day goes by without “InsurTechs” holding up a mirror to the established players in the industry in terms of speed and agility in implementation. The high pressure of competition and digitalization requires the insurance industry to be more open to and capable of innovation. The digital transformation begins with the needs and requirements of the customer. This is why a major top 5 insurance company has set up a project to standardize and optimize its digital value chain based on needs and requirements management.
Our value contribution
Practical project experience was the starting point for identifying the core success factors for requirements management and translating them into a standardized approach. Based on clear client/contractor governance, both agile development approaches and traditional processes were taken into account. As a result, the full range of methods and processes can be orchestrated. Standardized tools ensure an effective and efficient approach across all processes.
New innovative products and improved, customer-oriented services are thus implemented more quickly in terms of IT technology and measurably increase customer satisfaction.
Client: International banking group
Background
A German personal insurer recorded below-average cost development compared to the market. The rating agency and trustees sent warning signals to the management and issued a clear ultimatum. From a position of strength – products/services were well positioned in the market and the P&L was sustainable – the company decided to set up an excellence program.
Our value contribution
The claims:
- 1. clearer responsibilities in the service and staff units in order to increase effectiveness and shorten throughput times (e.g. for product development)
- 2. increase efficiency/effectiveness in the customer service and service units for further profitable growth
- 3. generation of free space in the income statement for further forward-looking investments.
Horn & Company initially spent three weeks recording all business processes of the service, administration and regulatory units. At the same time, material costs were analyzed and initial cost-cutting potential identified. A new target operating model (TOM) was defined in management workshops. This served as a framework for further operationalization of the cost reduction potential, which was first carried out in five strategy teams and later in 15 operational implementation teams. The implementation of the excellence program took one year and improved the cost position by >25%.
Client: Allfinanz Group
Background
A German bancassurance group was confronted with an uncompetitive cost level in a core production area compared to the rest of the industry. At the same time, there was a problem with throughput times and service quality.
The affected units had already undergone two “haircuts” in the past. Horn & Company was initially commissioned to carry out a quick check to analyze the causes. This enabled initial potential to be identified.
Our value contribution
There was a lack of relevant control mechanisms for sustainable further development. In addition, management quality needed to be further developed. As a result, Horn & Company proposed a strongly bottom-up driven process model for further optimization: 1. using lean management techniques, optimization measures were to be identified and developed by the employees and managers themselves, 2. measurement and control processes for continuous further development were designed directly for the identified weak points, 3. all steps and techniques of the project work were carried out together in a tandem of external consultant and internal multiplier. This ensured the highest possible empowerment of the customer’s organization. The strongly process-oriented optimization led to the desired measurable SLA improvement while simultaneously reducing costs by 12%.
Client: Medium-sized insurer
Background
Horn & Company supported an initiative of ten universal insurers who wanted to jointly define processing standards and exchange ideas on how to further develop their business models. One aim of the initiative was to define a uniform process model. This was to ensure standardized communication and simplified integration of sales organizations and service providers. Horn & Company created this model and coordinated it with the participants.
Our value contribution
Subsequently, the customer service processes and relevant key performance indicators were to be subjected to a joint benchmarking process. To this end, Horn & Company collected all relevant resources and the associated business figures of the participants using a user-friendly tool and subjected them to a comparison of key figures. In addition to determining efficiency and effectiveness indicators, the aim was also to enable a meaningful evaluation of individual companies and a cross-company discussion. For this reason, qualitative aspects relating to structural and management principles, the customer and product spectrum as well as strategy and service objectives were also examined by means of questionnaires and expert interviews and discussed among the participants. This approach was used to analyze operational and performance/claims processes in the S, H, U and K divisions.
Client: Anonymous
Background
The client wanted to create transparency regarding costs charged within the Group in the retail and corporate business. A key objective was to evaluate all services in terms of their optimization potential, identify the most promising cases and quantify the potential annual savings. In addition, a sound basis for decision-making was to be developed for senior management in order to trigger detailed business cases. This included the description of the most attractive optimization cases, including proposed measures, expenses and projected annual savings.
Our value contribution
Our service consisted of identifying and combining relevant data sources for cost information, including reconciliation with the annual report. We derived a set of around 25 optimization measures, including automation or reduction of service frequency, and defined a scoring framework to evaluate each measure. We also created interview questionnaires to validate and refine the results and introduced a structure for evaluating and presenting potential optimization cases.
Our value proposition included the design of a monthly updatable overview for charged costs per service and sub-service, including drill-down options. We developed an evaluation framework with monthly updatable cost data that identifies optimization potential and proposes measures and interview questions for validation with stakeholders. In addition, we provided a directly actionable decision basis for senior management that describes and evaluates the most promising cases in detail.
Client: Commercial bank
Background
The regulatory requirements for the lending business have risen continuously and the implementation of these requirements often leads to costly complexity in operational processes. As part of the realignment of a medium-sized commercial bank (around EUR 15 billion in total assets and 2,500 employees), a project was launched to further develop the retail business from both a regulatory and efficiency perspective. The first step was to identify potential regulatory gaps and develop specific solutions to close them.
Our value contribution
In the second step, regulatory efficiency and effectiveness were optimized and the retail business model as a whole was further developed. At an operational level, individual structuring options in the retail lending business were reduced, parts of the process that are critical for regulatory purposes were automated to a greater extent in order to reduce sources of error, instructions were focused and simplified in order to increase comprehensibility and the ICS was redesigned to make controls more risk-oriented. In addition, the number and complexity of retail credit products were reduced at a strategic level, the number of employees was reduced by means of a specialization concept, responsibility for the lending business was assigned to Sales and responsibilities in the lending business were redefined via the competence grid. Profitability in the retail lending business was thus increased by more than 20%, despite more regulation.
Client: Austrian insurer
Background
The cost planning of a top 10 Austrian insurer showed an unpleasant increase that forced immediate action: operating costs had to be reduced by 8% in the short term in order not to exceed the targeted combined ratio value. For this reason, Horn & Company was commissioned to carry out a company-wide fitness program which, on the one hand, enabled this short-term cost reduction and, on the other hand, identified further sustainable cost reductions.
Our value contribution
In a six-week fitness check, the entire cost base of the company was analyzed and the possible cost reduction potential evaluated. It became clear that the short-term cost reduction target could only be achieved with “immediate measures” – a special cost office was set up for these measures. In the subsequent three-month program phase, the cost reduction measures in the blocks of sales, operations, claims, IT, life insurance and central material costs were further detailed together with the company’s managers. This was followed by a 2.5-month implementation preparation phase in which selected topics were further elaborated so that operational implementation could begin after a total of seven months.
As a result, the targeted short-term cost reduction was fully achieved in the current financial year – a feat that was fully supported by the company’s managers.
Client: Private bank
Background
The operating result of a German private bank with a focus on custody and retail business had remained negative for three years. The reserves had already been significantly attacked to balance the income statement. Horn & Company was commissioned with an analysis and the development of a recommendation for action. In a 3½-week preliminary study, a strategy check, an evaluation of all relevant business figures and a standardized recording of all processes and capacities of the company were carried out.
Our value contribution
In addition to the purely quantitative analysis, a qualitative assessment of the initial situation was carried out together with the bank’s first management level. Horn & Company carried out indicative benchmarking and assessed possible optimization levers from an external perspective. The start of an optimization programme was discussed with the entire Management Board and a concrete roadmap for the next steps was presented to the Supervisory Board. This included a strategy, process and cost campaign. As part of the subsequent four-month project phase, measures were developed together with the managers that led to a P&L-effective cost reduction of around 18% within a two-year period. At the same time, further scope was created for strategic investments.
Client: Insurance group
Background
In an insurance group with around EUR 500 million in premium income and EUR 80 million in administrative costs, a project was carried out to optimize the company as a whole with the aim of sustainably reducing costs by a total of EUR 8-10 million over a three-year period. In order to achieve around 30% of the cost target in the first year, a package of immediate measures was initially implemented: In addition to a qualified hiring freeze, these included in particular the establishment of a material cost office equipped with wide-ranging powers, which released all relevant expenditure and scrutinized existing contracts with cost commitments.
Our value contribution
At the same time, a tool-supported, company-wide capacity survey was carried out based on the Horn & Company insurance process model. In addition to the use of external benchmarks, expert workshops were held with employees and managers to identify efficiency potential and optimization measures in operating and claims units, staff and IT (so-called H&C benchmarking method). A spatial conversion necessitated by changes in the structure and workplace organization was implemented in a “big bang” over a single weekend. In the end, the project goal was clearly exceeded with a total of 15% reduction in personnel costs and 22% reduction in material costs.
Client: Major savings bank
Background
As part of a “credit growth strategy”, a very successful major savings bank (> EUR 8 billion total assets, > 2,000 employees) realigned the entire credit value chain in a front-to-end optimization. The project objectives were to sustainably increase the productivity of loan processing, reduce throughput times for sales and customers and professionalize operational production management.
Our value contribution
In the project, the processes and interfaces were evaluated in a pragmatic 360-degree analysis, existing organizational structures were analyzed and the capacity commitment in the processes was measured using a top-down method in order to determine the level of process costs, among other things. Based on the results, the allocation of tasks between sales and back office was optimized, products and processes were made less bureaucratic and interfaces were made more flexible. At the same time, measures were taken to measure and increase both the submission quality of the sales department (first-time-right rate) and – in the event of incorrect delivery – the self-healing rate of the back office. Specializations were also implemented in the back office and production lines established in order to separate simple processes (mass production) from difficult processes (manufacturing operations) and faulty processes (smart repair). As a result, process costs were simultaneously reduced by more than 20% and the measured process quality increased by more than 30%.