Tryg Procurement - Releasing the full potential of Tryg’s cost base Morten Ochsner Hald, CPO 1 25 April 2017
Background NLS Methodology Supplier strategy Claim systems, Scalepoint, In4mo and E-Auction 2
Background CV for CPO/VP Morten Ochsner Hald - 4 years in Tryg - 7 years in Scalepoint as Head of Procurement and Data management + the office in Luzern and Dublin. Working with + 30 Insurance companies in Europe NLS activated in 2011 - Efficio consultants onsite the first 1 ½ year - Total reconstruction of the Procurement organization and The winner of the CIPS, Supply Management Awards 2013 - 25 % fewer suppliers - All targets have been reached every year - IT procurement are added to team in FEB 2016 and Efficio consultants are onsite again between SEP 2016 – DEC 2017 - The team consists of 40 FTE 3
Annual spend (Claim ~ DKK13 bn + Indirect ~DKK1.3 bn ) Spend by categories Indirect 12% Motor 28% Health & Travel 22% Building Other Claims 4% 19% Content 15% Motor Building Content Other Claims Health and Travel Indirect 4
Next Level Sourcing initiatives 2017 • E-auctioning/RFQ of major reconstruction tasks • Consolidated network of craftsmen and damage control • Fixed prices on subtasks (incl. hourly wage and materials) • In4mo claims handling system 500 • Scalepoint Content • Stricter control of documentation 2014 • Consolidated network of workshops and increased referral rates • Consolidated network of glass repair suppliers • Nordic roadside assistance supplier 700 • Outsourcing/new supplier of Tryg’s emergency centre • Consolidated network of clinics and increased referral rates • Concept development e.g. health support team • Outsourcing of Tryg’s health team 2011 • Sourcing of contracts: cleaning, marketing, IT consulting, legal etc. (EFFICIO) mDKK • Enhanced fraud detection 5
Methodology – 7 step sourcing & procurement process Sourcing Strategy Sourcing Initiative Delivery Implementation & Supplier Mgt 0 1a 2 3 4 5 6 7 Baseline cost Evaluate Conduct analysis RFP & supplier Implement Execute 1b Set up Develop develop clarifi- contracts / Supplier Strategy Supply market sourcing sourcing clarification cations / services & Manage- e.g. RFP or analysis initiative strategy / negotia- handover ment other negotiation tions & into BAU 1c strategy select Business specifications Gate 0 Gate 1 Gate 2 Gate 3 Gate 4 Submit Project Approve scope and Approve RFP Approve final Review progress Definition Report strategy supplier shortlist selection of suppliers against implementation plan Approve negotiation Sign off savings strategy Process comments • The sourcing process secures commercial efficiency and operational/deliverable quality • A proper governance structure is required to fully maximize potential • Gates secures accountability among stakeholders 6
Successful sourcing initiatives, Supplier strategy Tryg Alarm – A successful outsourcing case Benefits realised • 10 - 20% saving on cost after outsourcing • Improved service levels Outsourcing of the health team to Falck • Increased customer satisfaction • Customer complaints dropped Motor repair – Tryg is + 7 % under the market Tryg IC/DK 7
Claim system overview Core features Value Proposition Scalepoint – Private Content Solution Online Settlement Tool Reduced pay outs Matching Engine Reduced cycle time Online Replacement Shop Optimized use of business rules Electronic Voucher (SMS) Procurement volume utilized In4mo – Building Solution Online Settlement Tool Reduced pay outs Documentation Reduced cycle time Online Customer site High level of control Supplier responsibilities Use of ICC (fix prices) Scanmarket – e-Auction Online Settlement Tool Reduced pay outs Documentation Reduced cycle time Unlimited supplier High level of control High level of competition Transparency 8
Annual indirect expenditure is DKK1.3bn – amount of suppliers / (amount of supplier within 80% of the spend) Uncategorised >3,282 / (92) 214 (12) Non-IT IT & Telecoms 431 (34) 67 (4) 405 (59) 154 (30) 234 (26) Total IT & Facilities Logistics HR/Travel Professional Marketing Uncategorised Spend Telecoms Management Services Fairly high consolidation of spend, however still a challenge in terms of number of suppliers Potential simplification and savings 9
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