UK P&I Club - Issue 32

Ten years ago, in late 1992, the Club conducted its first Member survey which led to a variety of innovations in Club service.

As the result of the findings of that survey, the Club reorganised the traditional syndicate system, refocusing the syndicates geographically and increasing the number of staff available to each group. Area managers were appointed with responsibility for each main area of membership to ensure the quality of service delivery.

At the same time, improvements in IT and communications which we now take for granted were introduced, such as the universal availability of personal computers, e-mail and access to information databases. Office hours were extended and open plan offices were created to improve internal communication.

The specialist P&I Claims Team (PICT) was founded to provide a centre of expert knowledge and experience in the handling of complex and major claims. As well as serving Members directly, PICT supported other claims executives with expert advice and guidance. A loss prevention co-ordinator was appointed to extend and develop loss prevention initiatives which were increasingly distributed through newsletters and videos.

The second Member survey in 1996 recorded increased satisfaction among Members both generally and in specific areas of service such as communication. As the result of the findings of this survey, the Club regionalised to meet continued demand for greater and more consistent contact in Members' home countries. Claims handling was regionalised to the Americas, Europe and Asia. Additional offices were opened in Singapore, Taiwan, Beijing and Shanghai. The PICT team incorporated claims experts from the regional offices to form an international resource re-named the Claims Specialists team. The London syndicate system split into 'area groups' to complete an international network of seventeen geographically specialised claims handling operations. Everyone in the extended network continued to be personally contactable via email and direct dial phone and had access to the Club's extensive databases of information.

The OASIS claims handling workflow and imaging system was introduced, enabling better control and the management of this vital function. The Club's websites were set up and used increasingly to bring information to the Members in a timely and cost-effective manner.

The third Member survey, the results of which are analysed in this newsletter, has shown further increases in the levels of Member satisfaction on almost all measures and has endorsed the changes made as the result of the last two surveys.

The Club will however, never rest on its laurels. For me, the key message from the latest survey is the importance of relationship between the Club and its Members. Half of the issues prioritised concern the quality of relationship. It is clear that the Members require and value a sympathetic and consultative relationship with the Club; one in which they are generally better informed and can become more involved in P&I decisions which affect their wider commercial interests. Although the detailed findings of the survey point to several detailed initiatives, I believe that the strengthening of the relationship between the Club and its Members has the greatest potential for increasing satisfaction over the coming years.

The Member survey has two simple goals. Firstly, to offer the Members an opportunity to say how satisfied they have been to date with the Club's efforts in providing all the essential functions of P&I service. Secondly, it enables Members to guide the Board and managers on the Members' expectations and to establish the priority areas where further improvements in satisfaction can be achieved.

Using the extensive and detailed statistical information supplied by Research International, the managers prepared a paper for the Board detailing the key areas for improvement and the ways in which the Club should tackle them. This paper has been endorsed by the Board and a summary of some of the immediate action steps is given below in this newsletter.

Despite the detailed nature of the questionnaire, it is not a simple task to identify those action steps. Not only has the overall satisfaction score for the Club's service been high, but the variation between the highest and lowest scores for the different Club attributes has been relatively small. None of the key service areas where Members were asked to indicate their satisfaction received a net 'dissatisfied' score.

Because of the absence of any clear expressions of dissatisfaction in respect of these areas of Club performance, it was decided that rather than simply looking at areas where satisfaction scores were relatively low, the focus should be on those attributes where satisfaction was below the overall average yet whose importance rating to Members was above average.

The top ten such responses are reproduced in the graph on the right and form the core of the Club's action plan for future developments in service.

The final question in the survey invited suggestions for changes by the Club to improve Member satisfaction. The three most frequent suggestions were improvements to the cost and efficiency of the Club's suppliers, closer control of costs and overheads, and building greater continuity and depth of relationships between Members and manager's staff.

Members are very aware of the role of correspondents, lawyers, surveyors and other professionals in the service of their claims and other issues. They expect the Club to manage its suppliers effectively and ensure a high standard of service particularly among the correspondents. They require the Club's own staff to be well qualified and experienced in legal matters so that they can retain an appropriate amount of legal advisory work in-house and delegate to law firms on matters where their specialist expertise will be of most value.

When asked whether the Club was financially well-managed, 85 per cent said they were satisfied - 14 per cent were undecided and only 1 per cent stated they were dissatisfied. Despite that high score the frequency with which management of the Club's own costs featured as source of further improvement makes it clear the Club is required to maintain continuous attention to this issue.

Build the continuity and depth of relationships between Members and manager's staff

As well as featuring frequently as a recommendation for improvement in this question, 78 per cent of Members responding confirmed that continuity of relationship was important to them. Ideally, Members would prefer to deal with the same staff for a number of years. The Club is incorporating these views into the development of its infrastructure and services. The 'value for money' initiative bearing directly on the Club's relationship with its key suppliers is reported in the Winter 2002 issue of UK Club News. The Club is also launching the 'Fees-able' fee submission system with other Group clubs to streamline and improve the efficiency of payments made to Club correspondents and other suppliers.

It is now no secret that 91 per cent of all Members responding to the survey declared themselves satisfied with the Club's recent performance, surpassing the target set by the Board of 90 per cent. In addition, a question asking whether Members would recommend the UK Club to industry colleagues also attracted a very positive response as shown in the graph below. A total of 88 per cent of the participants in the survey stated they would be either likely or very likely to recommend the UK Club to others.

Respondents' views of the main advantages of being a Member of the UK Club were remarkably consistent. Financial security and good service were the two most frequent responses. Many Members were more specific in explaining the advantages - the reliability and reputation of the Club were key attributes. The request for the three attributes which Members had individually most appreciated yielded a range of responses. The most popular were the availability of regional expertise and locally delivered service, the experience and professional expertise demonstrated in the course of handling claims and the consultative and personally attentive service that had been provided.

Top ten focus areas of Club performance

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Financial security attracted the highest aggregate scores for both importance to Members as a P&I club attribute and also for Members' satisfaction. As it was the top priority category, it was unsurprising that Members' need to be kept informed about the Club's financial strength featured strongly in the responses. Although 84 per cent of respondents believed that the two pillars of financial strength and Member service were well balanced, the high rating achieved by financial security sets an ambitious benchmark for improvement in other areas. Analysis of the general comments makes it clear that improvements in service are the priority.

The questionnaire probed Members' priorities in respect of the service expected of a P&I club. Their response was to place the following in the top three. A Club should

The question which revealed the largest gap between its importance rating and its satisfaction rating was on the Club's acting on complaints.

The claims handling function was rated the second most important after financial security by responding Members. All the questions asked in this area of Club activity received very high importance ratings, but what is just as pleasing is that, with only one exception, all of the questions received higher satisfaction ratings than in the previous surveys in 1992 and 1996. While the satisfaction ratings are high across the range of claims handling attributes, two do stand out as areas where the Club can improve satisfaction. The provision of efficient crisis management and fighting hard on Members' behalf when dealing with a claim clearly suggest themselves as areas for further attention.

The provision of crisis management is an interesting area. Fortunately, few Members find themselves in a crisis situation, but there is undoubtedly an increase in public awareness and scrutiny under such conditions. The Club's persistent efforts in the fields of membership quality and loss prevention have helped Members reduce the number of claims incidents. However, although rare, the risk of high profile casualties causes increasing concern among Members, and they look to the Club for assistance on making proper preparation for such eventuality.

Contact and communication between the Club and its Members has been an area which the Club has concentrated on since the first Member survey in 1992 and the satisfaction scores have consistently increased.

The accessibility of key Club staff is vital and unsurprisingly the questions relating to Club performance in that area formed the three most important attributes according to Members. Notable improvements in satisfaction were achieved in the following three areas.

Given that Members received their questionnaire shortly after a renewal that featured the first double-digit general increase for a decade, it is unsurprising that 'careful and fair adjustment of renewal rates' received the highest importance rating within the underwriting section. However the satisfaction rating for that question was much higher (60 per cent) as compared to the 1992 result (41 per cent) when large unbudgeted increases in call were a feature of P&I renewals.

The two areas which demonstrated the largest gap between importance and satisfaction, were

The Club has applied considerable effort to these two areas of activity over the past decade. Whilst the impact on the claims performance of entered fleets is hard to quantify, there is no doubting the importance placed by Members on the information such activities provide. Actively helping Members with safety and regulatory changes, environmental issues and communicating new developments in claims and claims-related problems were recorded as the three most important areas. Satisfaction in these areas was also high and was second only to the quality of Club staff in having the smallest gap between the scores for importance and satisfaction.

It was gratifying to see this section not only producing the closest match of Member satisfaction to importance but also featuring one attribute where satisfaction actually exceeded the importance rating - the ability of executive staff to speak the native language of the Members they serve.

The priority areas are clear: the top three attributes of P&I staff shared the same 92 per cent importance rating. Staff are expected to have an understanding of Members' business issues (77 per cent satisfaction), enough time to deal with those issues (75 per cent satisfaction) and a creative problem-solving attitude (69 per cent satisfaction).

The supplementary questions probed whether the Club informs its Members on aspects of financial security. In this crucial area, communicating well to Members is as important as performing well. The paler areas of the bar are the percentage who strongly agreed or disagreed with the statements presented.

The essential objective of the Member Survey has been to identify and prioritise those attributes of P&I membership that our members see as most important. Members' satisfaction reported in the survey is then compared with their expressed priorities to assess how well the Club is doing at attending those needs.

Members were invited to describe the importance of those attributes, and their satisfaction with them, on a scale from 1 (Very Unimportant/Very Dissatisfied) through to 5 (Very Important/Very Satisfied). If the Club is serving its Members effectively according to their needs and priorities all these attributes should have matching scores i.e. very important attributes achieving high satisfaction scores.

In these graphs the dark blue 'important' bar shows what percentage of Members gave a 4 or 5 score to that attribute. The lighter blue 'Very Important' bar shows which percentage of Members gave the top priority score of 5 'Very Important'.

The dark yellow 'Satisfied' bar shows the percentage of Members scoring 4 (Satisfied) or 5 (Very Satisfied) for those attributes. Members expressing indifference 3 (Neither satisfied / dissatisfied), 2 (Dissatisfied) or 1 (Very Dissatisfied) are shown as a percentage of the total responses by the pale yellow 'Dissatisfied' bar.

Any Member requiring more information regarding any of the topics within this report should contact Nick Whitear

As far as Club service is concerned, the survey reinforces the overriding importance to the Members of the quick and efficient provision of guarantees, responding urgently, claims handling expertise, fighting hard on my behalf, reimbursing claims promptly, good out of hours contacts and phoning back promptly.

Although the managers are always looking for ways in which they can improve the provision of these crucial areas of service, for some of the key attributes the 'gap' between importance and satisfaction is too wide (e.g. the graph on page 2 shows 'fighting hard on my behalf' scoring 0.88 less for satisfaction than importance). The managers are therefore either reinforcing steps already being taken (i.e. 'fighting hard on my behalf') or initiating new steps ('reimbursing claims promptly') specifically to seek to 'close the gap' in those areas.

Financial and underwriting issues are also of course crucial to the membership - 'financially secure Club' is the single most important attribute of the Club to its members - but on this and the majority of key financial and underwriting measures, the level of satisfaction is high and the 'gap' relatively small. However in two areas of high importance to the membership - 'clear explanation of policy years' development' and 'helpful in providing specialist covers', the 'gap' is wider than we would expect and immediate steps are being taken to improve the Members' levels of satisfaction in these areas.

The Club has consistently improved its satisfaction score on this issue from 41 per cent in 1993 to 55 per cent in 1996 and 62 per cent in 2002. However, it still regards this score as unsatisfactorily low.

The Club's Value for Money programme now being developed should make a significant difference to the results in this area, by ensuring that detailed consultation is carried out between the managers and the Member (and the lawyers and correspondents) at the outset of each significant case, with the aim of arriving at an agreed strategy and a target for the desired result.

This process should assist Members establish objective criteria to ascertain whether the managers have fought hard enough on their behalf, since the strategy and the desired result are agreed with them in advance.

The trust that the Member has in his claims handler (and the lawyers and surveyors chosen to represent them) is central to the process. Personal contact through visits to the Members' offices - and vice versa - continues to be essential. The managers therefore will maintain their policy of ensuring claims handlers can regularly meet the Members that they deal with.

The Club operates to a standard of eight working days from receipt of a claim for reimbursement to the dispatching the credit note. This target is monitored monthly. Whilst on an average basis this target is met, there are individual payments that may take significantly longer, for a number of reasons. The managers have researched the most common reasons why payments may take longer than the standard.

The managers will shortly produce a new publication - 'A Guide for Members To Making Claims On The Club'. It aims to explain the process clearly, focusing on common obstacles so that in the majority of cases they can be overcome. Common questions the Claims Guide will answer include what is and is not recoverable in different types of claim, which exchange rate should be used, whether the Club pays interest, how best to 'batch' claims, which supporting documents are required and the like. The Claims Guide will be published to Members in 2003.

Complaints are already dealt with as part of the manager's ISO 9001:2000 quality system, but the relatively low level of satisfaction recorded suggests that the system needs to be made more open and accessible. Any complaints, process errors and suggestions for improvement which the managers' staff become aware of either formally or informally are recorded on an electronic 'Feedback' database. Complaints may be made (and also satisfaction recorded) by any Member, correspondent, broker or other Club contact about any aspect of the Club's services and processes. The Feedback database is monitored daily by a senior member of the managers' staff and complaints and suggestions are allocated by him to be handled by the most suitable person. He usually makes suggestions as to what needs to be done and also sets a 'completion date' by which the feedback must be 'closed'. Items on the database can not be 'closed' until they have been satisfactorily dealt with.

Since August 2002, a new area of the Club's website at www.epandi.com provides the Members with examples of feedback and the steps that have been taken by the managers to deal with them. Sensitive complaints about individuals are handled separately. Such complaints should be raised with the relevant area or regional manager, who in serious cases will request the assistance of the Service Director.

The relatively low satisfaction score on this subject suggests that Members would like the managers to assist them more with their own crisis management planning. Some Members incorporate the Club in that process, for example by inviting the managers to attend drills and give presentations. The Club intends now to develop a crisis management plan template for Members' use.

News of the development of each policy year is published in the Club's Circulars, particularly those issued after the October Board meeting, and in articles in UK Club News. The Directors' report in the annual Report and Accounts also contains such information. The relatively low satisfaction score on this issue should be considered with high scores achieved in respect of the Club's published financial information. The Club is to research the best way to issue progress statements on the Club's finances at appropriate intervals during the policy year.

The Club will improve the amount of explanation to Members of the variety of specialist covers that are potentially available. This information will be produced both electronically on the website and in hard copy.