Page 52 - Personal Underwriting Mandates & Guidelines - Binder product rules & addendums - Version 1

Procurement Philosophy
PROCUREMENT PHILOSOPHY
Managing suppliers, the direction of spend and claims leakage in respect of claim disbursements and payments made on behalf of the Company.
1. THE FOLLOWING IDENTIFIED FUNCTIONS ARE REQUIRED
1.1 Managing procurement: Hollard has a preferred supplier panel which is available for you to use. It is a condition of this agreement that you adopt our supplier network and utilise these suppliers for all claims indemnity to our policyholders. In line with the financial sector code targets set out by the Department of Trade and Industry along with the proposed changes to the retail distribution review, you are required to adopt our transformation strategy and also utilise our preferred supplier panel, which includes inter alia panel beaters, general repairers, salvage dealers in motor, loss adjusters, non-motor salvage contractors, assessors, builders, attorneys, etc. These suppliers have been vetted by our governance team and are aligned with the Hollard Insure strategic goals of transformation, cost and customer.
1.2 Managing the direction of spend: Managing the direction of spend will be facilitated through the use of the Hollard preferred supplier panel. The Procurement department will be responsible for procuring skilled suppliers who offer services and products that are of quality and will also manage the performance and capacity of suppliers.
1.3 Managing claims cost leakage: Based on the principles of honesty, fairness and integrity and through the establishment and use of a transparent procurement process and system, Hollard Insure has committed itself to the efficient and cost effective procurement of goods and services through favourable, negotiated terms that are a win-win for both Hollard and the suppliers. The Procurement policy applies to all claim purchases and indemnities made with funds under the control of and administered by Hollard Insure and is therefore applicable to all entities, divisions, departments, branches, centres, units, binder brokers and staff under Hollard Insure. All members of the Hollard Insure community who have any procurement function and/or responsibility are accountable for both the prudent use of Hollard Insure resources and are obliged to comply with policies and procedures as set out in the procurement policy. Post claim audits will be conducted regularly to ensure that the risk of claims cost leakage is mitigated.
2. THE FOLLOWING MINIMUM PROCESS MUST BE FOLLOWED
2.1 Managing direction of spend
2.1.1 Facilitating the use of contracted partners versus non-contracted suppliers.
2.1.2 Ensuring quality of service from suppliers (i.e. product and service quality).
2.1.3 Managing the grading of skills and workmanship according to criteria.
2.1.4 Managing supplier capacity.
2.2 Managing claims cost leakage
2.2.1 Implementing formal cost management strategies and action plans such as post claims audits and supplier audits.
2.2.2 Providing channel cost analysis reports reflecting supplier adherence to procurement contracts and agreed terms and pricing models.
3. THE FOLLOWING MINIMUM CONTROLS MUST BE IN PLACE
Ensuring that all suppliers are loaded on the system. For the purposes of good governance, the client profile and banking details will be processed (and updated) by the finance team upon being presented with a signed contract and other relevant details.
Page | 50 Full Binder Claims Mandates and Guidelines – V3: 2019