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Tesco plc was looking for a way to gain full control over its claims data to help improve store safety and reduce accidents. The retail giant used Ventiv’s RiskConsole to facilitate the implementation of successful risk mitigation programs that reduced indemnity spend and provided a competitive advantage.

UK-headquartered Tesco, one of the largest retailers in the world, operates more than 6,000 stores worldwide. Serving millions of customers every week and employing over 300,000 staff members, the potential for accidents is everpresent. Tesco was looking for a way to use their risk and insurance data to be able to quickly identify root causes of accidents, target loss prevention initiatives and help make risk financing decisions more precise.

Adopting RiskConsole

The main objectives Tesco set out to achieve by implementing a risk management information system are threefold:

  • To minimise and mitigate the frequency and severity of accidents to customers and staff,
  • To quickly and appropriately compensate customers and staff if they were legitimately injured,
  • And, reduce the average cost of personal injury claims.

To achieve these objectives Tesco needed to gain control over its claims data, which was supplied from the insurance companies who managed the claims, and be able to analyse all elements of the claims lifecycle.“In order to implement effective risk management procedures, we needed to improve how we aggregated, used and analysed all our claims data,” says Neil Almond, Systems and Data Manager in the Insurable Risk Team at Tesco PLC.

Correct System Selection

“We looked at several risk management information systems and decided on RiskConsole. This was because of our existing relationship with Aon and the stability and work-man-like nature of the system. Since I joined Tesco in 2009, I can’t think of an instance when the system has let us down,” says Almond.

Tesco then worked with Ventiv to examine the existing data landscape and determine how to best structure the claims data in RiskConsole. Almond says: “In order to give ourselves the best opportunity to effectively reduce accidents and lifecycle costs, we have to ensure the data entering the RiskConsole system is correct. This means causation options and all the data fields have to be clear and provide the claims handler with an intuitive and explicit route for entering an accident.”

“The time and effort spent during the design stage has paid dividends. We’re now provided with a complete view of the overall claims environment that we can trust. From this we can focus our energy on tackling the main causes of claims first, and in the most effective way,” adds Almond.

Tesco
Tesco

"“The time and effort spent during the design stage has paid dividends. We’re now provided with a complete view of the overall claims environment that we can trust"

NEIL ALMOND

Systems and Data Manager in the Insurable Risk Team

Tesco

Insightful Decisions

The data and reporting capabilities from RiskConsole enables Tesco to analyse all elements of the claims lifecycle. Importantly, this includes how claims and the claim experience differs across the whole of the company’s operation.

“We run many reports looking to identify the main causes of our retail and distribution claims, but also on the operation to manage our claims and the financials. The richness of the data has enabled us to put together a number of unique initiatives, such as our ‘safer place to shop and work’ programme. RiskConsole quickly shows us whether our initiatives have had a positive effect or not,” explains Almond. In fact the new programme has significantly reduced the number of accidents customers were having within the retail operation, which was previously the biggest driver for claims within Tesco.

Data analysis has also allowed Tesco to see what aspects of the products sold in store influence claims and the primary locations where claims are occurring. Almond says: “The insights we have literally drive everything we do. We’ve trialled various types of packaging to reduce injuries in our produce section. We’ve revised our refrigeration maintenance schedules and increased grit availability so that they align with seasonal weather changes. These targeted actions have resulted in significant gains in reducing the occurrence of accidents.”

Aside from reducing the causes of accidents, Tesco has also used RiskConsole to actively reduce the number of claims that re-open and the speed at which data is transferred to the claims handling teams. Almond says: “Back in 2009, we identified that our denial policy was probably too robust. The analysis from RiskConsole enabled us to advise our third party suppliers to adjust their policies, which has reduced our re-open rates and had a positive effect on our average cost of claim.”

Data insights also spurred Tesco to implement a new accident reporting system, which has drastically reduced the claims lifecycle by speeding up the transfer of information to the handlers. Furthermore, Tesco has encouraged store managers to build up a good rapport with the handlers to ensure all the evidence for a claim, such as logs, CCTV footage and witness statements, is provided as quickly as possible.

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Third-Party Efficiencies

Using RiskConsole, Tesco has had the ability to change strategies and manage claims using a combination of two third-party legal providers and an in-house team.

Almond explains: “What’s made my life simpler is RiskConsole’s ability to aggregate data from various sources into one place. Data from our partners is automatically uploaded into RiskConsole overnight and placed alongside the data from our internal team to give us the complete view of our claims book.”

Tesco also uses RiskConsole to performance manage their legal suppliers. The company can compare performance between the two providers and by benchmarking against the market in general. A consequence of this has been that Tesco is in an excellent position to reduce the legal costs through new reforms that have come into effect in the UK.

Through RiskConsole, Tesco is being more proactive with their actuaries. Almond explains: “Previously we’d simply send the actuaries a spreadsheet of our claims data and accept the provisions they calculated. Now we do far more, and actively look to educate the actuaries on our claims situation, which has resulted in more accurate provisions.”

 

“RiskConsole has enabled us to change the way we work, and gives us a competitive advantage by significantly improving customer and staff safety and reducing the number of accidents at our stores.”

Helping Improve Safety

“RiskConsole has enabled us to change the way we work, and gives us a competitive advantage by significantly improving customer and staff safety and reducing the number of accidents at our stores.”

“Through the detailed information in RiskConsole, Tesco can very clearly demonstrate we have as much control as an insured can have over our claims, and we can show how we’re actively reducing the average cost of claims. This enables us to keep our indemnity spend down and set our deductible, captive and external insurance layers at the optimum levels,” says Almond.

Based on his experience with RiskConsole, Almond offers some advice for other risk managers seeking to implement a RMIS. “Firstly, I’d make sure you have full executive support. Secondly, I would advise you to get the best possible understanding you can of your current data. How it is now and where you’d like it to go in the future. Then finally, spend as much time as you can ensuring how you’re going to hold your data within a system is clear, relevant and avoids duplication,“ says Almond.

“Ventiv have helped guide us through this process. As a result we can easily conduct the analysis we want, target loss prevention initiatives and deliver substantial business results.”

Future Goals

Now that Tesco has the control it wants over its personal injury claims data, they’re working with Ventiv to bring the same control to their property and motor portfolios. Almond adds: “Being able to drill into motor and property claims and implement innovative programmes and protocols will undoubtedly have a big impact for Tesco. We’re now bringing on the property portfolio and also centralising our motor portfolio onto RiskConsole as well.”

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