The Cambridge acquisition
Xchanging and Cambridge – a powerful force for change. Our new high performance operating model is ready to transform customer service and reshape expectations for the industry.
A powerful force for change
In October 2008, Xchanging announced that it planned to acquire Cambridge Solutions Limited (Cambridge). Cambridge has deep technical and functional skills, and expertise in U.S. workers' compensation and liability claims management, while Xchanging has a proven approach to managing radical change of complex business processing operations.
This approach has been successfully implemented across financial services in commercial claims management, insurance brokerage services and securities processing with customers such as Lloyds, Aon, Deutsche Bank and Allianz.
A unique business opportunity
The due diligence related to the acquisition highlighted a unique business opportunity – a market that is largely underserved. Discussions with numerous customers, brokers and carriers revealed these insights:
- Contracts still regularly move from one provider to another. The reasons are based as much on relationships as performance. No single firm stands out in terms of performance.
- The consistency in the quality of claims handling between one office and another varies significantly, with the bulk of providers employing a highly decentralized model that resists standardization.
- There is heavy reliance on the quality of individual adjusters, to the extent that some customers even “approve” new hires. This practice underscores the lack of confidence in the service delivery processes.
- High levels of customer attrition and a tendency to sign short-term agreements reflect customers that are dissatisfied, and a lack of trust and effective partnership between customers and suppliers.
Transformation in Customer Service – a New Operating Model
Plans are now in place to invest in continuous improvement and leverage the complementary partnership of Cambridge’s people and industry knowledge, and Xchanging’s proven operating model and methodologies.
In the new model, customers will receive demonstrable benefit. At any point in time, clear and accurate measures will be readily available and proactively communicated.
Best-in-class service also means optimized claims outcomes. The aim is to resolve the claims fairly and effectively while reducing customers’ overall claims and loss costs. Speed, consistency and accuracy define claims handling from intake, through reserving and onwards to resolution. Superior data analytics help to streamline the entire process.
In terms of innovation, Xchanging brings best practice tools, methods and ways of working from its experience across different markets, industries and countries. The result is a new, targeted value proposition for customer service.
Another key factor driving continuous improvement is process optimization. The combined company will deploy processes that are designed to achieve customer expectations to the right level of quality and at the right level of cost. Where appropriate, these processes are standardized, aggregated and automated to improve service performance, reduce cost and optimize claims outcomes.
The Claims Centers of Excellence
To deliver this service we will invest in seven claims centers of excellence in strategic locations across the U.S. to enable standardization, segmentation and a focus on highly trained technical claims expertise.
These regional hubs will be supported by satellite offices to meet jurisdictional or contractual requirements. We will establish a flagship headquarters and processing center in Chicago, set to open in July 2009. Xchanging will also invest in the development of a U.S. based campus-style processing center of excellence, which will include a dedicated training academy for employees.