Recoveries Corporation Group Limited
Annual Report
2014–2015
About this report This Annual Report for FY14/15 is the first annual report for Recoveries Corporation Group Limited and represents the continued growth and development of our business. We are committed to being open and transparent in our operations and this report provides us with a vehicle for communicating our performance over the year. This report contains information on performance against our service, people, governance and financial objectives.
Index Performance at a Glance 4
Our Performance 23
Our Business 7
Government & Commercial – Key Achievements and Projects
24
Insurance – Key Achievements and Projects
26
Mason Black Lawyers – Key Achievements and Projects
29
Our People
31
Corporate Governance
39
Our Financial Performance
47
Acknowledgments
50
Our Services 9 Our Values 11 Our Goals 13 Our Strategic Direction 15 Chairman’s Message 16 Managing Director & CEO’s Message 17 Our Leadership Team 18
3
Cover page: Staff participating in Emerging Leaders Program.
Performance at a Glance Objective
Government & Commercial
Insurance
Mason Black Lawyers
To work with our customers to educate them about the benefits of meeting and fulfilling their debt obligations, while treating them with respect at all times.
To support and strengthen our clients’ businesses by working with third parties to settle outstanding claims that they are legally and morally obligated to pay.
To position the firm as the ‘trusted legal partner’ for commercial, insurance and individual clients.
• Won 2015 ANZIIF award
Highlights
• C ollaborated where possible with recoveriescorp to secure new opportunities
• New web based workflow management system
• New client – Auto and General
• Purpose built people search system
• ‘Lean Sigma’ claims review
• Innovative insource service delivery model
• F ourth anniversary of the establishment of our Fiji office
• Staff engagement increased by 8%
Number of Accounts
• Achieved revenue growth • I ncreased service offering through Kempsons Lawyers merger
• D eveloped a series of core training modules Number of Accounts for staff
• NPS of +62 achieved for Commercial clients • NPS of +50 achieved for Government clients
Insurance Growth • Two new clients – SLE and Zurich
• Improved NPS across 100% of clients
InsuranceofGrowth Number Accounts
Number of Accounts
Revenue Growth
Insurance Growth 600,000 Government
600,000 500,000
FY12
2012
2013
2014
55,344
0
2011
64,123
FY13
2012
FY14
Files
2013 $Value
2014
2015
Delivering high value to clients at a fair commercial cost.
$3,253,161
Maintaining the same culture as the firm grows through mergers and acquisitions.
$1,400,000,000.00
Value of Accounts
$3,130,804
FY15
$1,600,000,000.00
$1,200,000,000.00 Recoveriescorp - FY14/15
Government
$37,249,000
$1,000,000,000.00
Banking Utilities
Recoveriescorp - FY13/14 • $800,000,000.00 Continue our
investment in operational$32,006,000Commercial $29,322,000 $600,000,000.00 • Become appointed with Lloyds for property matters excellence training Recoveriescorp - FY12/13 Total
• Reduce debt recycling
$400,000,000.00
• $200,000,000.00 Continue to build our analytics capability
• Implement debt prevention strategies
$0.00
ay
ne
M
Ju
Ap ri l
4
gu st ep tem be r Oc tob er ov em be r ec em be r Ja nu ar y Fe br ua ry M ar ch
Ju ly
2011 2012 2013 rates 2014 • Increase uninsured recovery
Au
Future
People Growth
68,780
2015
Perception that we are facing a weakening economic outlook.
Recoveriescorp - FY12/13
Total
Revenue Growth 2011
Commercial
People Growth
People Growth
Challenges
Revenue Growth
48,505 100,000
Total
200,000
$4,622,676
Recoveriescorp - FY13/14
Utilities
166,000,000
200,000
Commercial
100,000
194,000,000
300,000
Utilities
300,000
0
Banking
400,000
Recoveriescorp - FY14/15
Banking
206,000,000
Ju ly Au gu st Se pte mb er Oc tob er No ve mb er De ce mb er Ja nu ary Fe br u ary Ma rc h Ap ril Ma y Ju ne
Results
500,000
137,000,000
Insurance Growth
400,000
Government
2015
• Increase service offering though acquisitions
Our People
Corporate Governance
Financial Sustainability
To create a workplace where people enjoy working, have a pride in their performance, work together to achieve success for our clients and feel valued for Number of Accounts their contribution.
To maintain the trust of all stakeholders in the way our business is managed and controlled.
To plan and manage our finances through sound policies and practices, to maximise our net return to clients and safeguard our continued financial sustainability. Recoveriescorp - FY14/15
• Staff turnover decreased to 20%
Recoveriescorp - FY13/14
ISO certifications achieved for 4 standards:
• 34 staff completed management qualifications • L eadership development program delivered to 35 participants Revenue Growth
• Corporate social responsibility program launched
• 71% growth in EBITDA over previous year
• ISO 9001
• R oot and Branch review delivered cost saving of over $500,000
• ISO 14001 • ISO 18001
Insurance Growth
People Growth
Revenue Growth Recoveriescorp - FY14/15
$37,249,000
Recoveriescorp - FY13/14
Attracting high quality candidates to match growth.
ay
ne
M
$32,006,000
Ju
Ap ri l
Ju ly
346 FY14
Au
465 FY15
$29,322,000
People Growth
gu st Se pt em be r Oc tob er No ve m be r De ce m be r Ja nu ar y Fe br ua ry M ar ch
Recoveriescorp - FY12/13
515 FY16
Recoveriescorp - FY12/13
• Achieved a 16% growthNumber in revenue of Accounts over FY14/15
• ISO 27001
Insurance Growth
Due to the increased focus on effective enterprise risk management, Committees will be required to meet more frequently.
Maintaining our cost structure while managing significant business growth.
Recertifying to new ISO standards for 9001 and 14001.
Achieve an ambitious revenue growth of 15% for FY15/16.
July
• Achieve Best Employer status • Continue to build staff engagement • Focus on career progression 5
Ju ly Au gu st Se pte mb er Oc tob er No ve mb er De ce mb er Ja nu ary Fe
• Staff engagement increased by 8%
Staff in costumes at our Christmas Party.
6
Recoveries Corporation Group Limited is an Australian owned and operated business. We lead the way in delivering innovative and tailored end-to-end solutions for our clients. With more than 450 staff and offices in Sydney, Melbourne and Suva, we aim to be ‘Number 1 for Tier One’ and have key expertise in the Federal, State and Local Government, Insurance, Banking and Finance, Telecommunications and Utilities sectors.
Our Business We offer a collaborative partnership based on our clients’ needs for an integrated solution that meets their specific collection requirements. At every level of recoveriescorp’s business we have adopted this approach to partnership.
We are a provider of comprehensive debt collection solutions through our four subsidiaries: • Recoveries Corporation Pty Ltd (recoveriescorp) • Mason Black Lawyers
Whether it be the collector and the debtor at reminder call services or debt recovery level, whether it be our own suppliers and importantly, whether it be with our valued clients, recoveriescorp has developed a culture of connecting, engaging in meaningful dialogue and succeeding for the benefit of the debtor and the client. Our clients can be assured that as a partner we go beyond collection services and offer an end-toend solution that will deliver the expected outcomes while sharing, promoting and protecting our clients’ values, market and brands.
• Advanced Collection Systems Pty Ltd • Reminder Call Services Pty Ltd
Kaushi volunteering at the Asylum Seekers Resource Centre. 7
Sidat volunteering at the Aslyum Seekers Resource Centre.
8
Team in Fiji celebrating Diwali.
Our Services Reminder Call Services
Insurance Claims Recoveries
We provide cost-effective and extensive reminder call services for pre-collection calls, courtesy calls, payment arrangement reminder calls and demand calls. Our latest technology in predictive diallers ensures our clients’ files are managed with maximum efficiency.
We provide claims recoveries and claim file audits for a range of insurance classes including motor vehicle, household and commercial property, workers compensation, and public, product or professional liability.
Debt Recovery Solutions
Litigation Management
Recoveriescorp has developed a series of debt recovery processes that quickly recover outstanding debt and boost the bottom line for our clients. We can tailor a recoveries program, whether it’s segmenting debt to identify the propensity to pay or working the stages of the debt cycle.
Our legal practice, Mason Black Lawyers, offers a seamless process when litigation is required. Mason Black Lawyers can offer expert services either as a point of escalation in the recovery process or as a stand alone service.
9
Staff participating in the Emerging Leaders Program.
10
Our Values At recoveriescorp, we believe that our people are our most valuable asset. Our individual and collective behaviours influence the way in which we interact with our colleagues, clients, third party suppliers and the broader community. Our culture is anchored around five core values. By living these values we achieve excellence in everything we do. We constantly strive to be the number one provider to our clients and our proven success makes us all proud.
11
Se
Revenue Growth Recoveriescorp - FY14/15
$37,249,000
Recoveriescorp - FY13/14 $29,322,000
Recoveriescorp - FY12/13
515 FY16 12
Ju ne
ay M
People Growth
July
Amaran – finalist, AICM Young Credit Professional 2014.
Ap ril
M ar ch
Ju
ly Au gu st Se pt em be r Oc to be r No ve m be r De ce m be r Ja nu ar y Fe br ua ry
$5,000,000
465 FY15
346 FY14
$32,006,000
Our Goals Looking forward to the FY15/16, we are aiming for continued revenue growth. We also expect to exceed 500 employees for the first time which will make us a Medium to Large Enterprise in Australia. Our mission is to provide the best long term net return for our clients and over the last few years we have collected significantly improved returns for our valued clients. This has also strengthened our position in the marketplace.
In the FY15/16 we are aiming for an ambitious revenue growth of 15%. We are also looking to drive an increase in staff engagement rates towards Best Employer benchmark.
David Mond speaking at a recoveriescorp sponsored AmCham event. 13
Recoveriescorp volleyball team in Fiji.
14
Our Strategic Direction As we continue to build from good to great, we have set five key platforms for growth for the upcoming financial year. They are:
1
Expand into new markets
4
Maintain cost leadership focus
2
Drive sustainable growth in existing markets
5
Build staff engagement
3
Achieve Trusted Partner Status for all clients
15
Chairman’s Message Recoveries Corporation Group Limited has been operating since 1991 and is a leading provider of debt management, collection and legal services throughout Australia. We continue to develop and maintain strong and lasting relationships with government departments, the insurance industry and the utility and banking sectors.
Many additional highlights occurred in the past year; these included – fund raising where our people supported the CREATE Foundation, the Asylum Seekers Resource Centre, the Royal Children’s Hospital Appeal and Childrens’ Tumour Foundation through our Corporate Social Responsibility program. In total, we raised $12,500 for CSR activities for the year. We continually celebrate diversity in our offices, with internal events held each month to acknowledge any holiday being celebrated during that month around the world and give our staff an opportunity to share any cultural customs with their co-workers.
Our people, who now exceed 450, located in our head office in Melbourne, in Sydney and in Suva, have again demonstrated a committed understanding of the importance of these relationships which has resulted in a year of considerable achievement on many fronts. In this regard, I acknowledge the strong performance of our staff at all levels.
During the year we appointed Joan Fitzpatrick as a Director and she has added great value to our Board. I thank her, together with David Mond and Leon Sholl, for their contribution to sound governance of our Group and its entities. We are challenged and confident to continue to build our businesses in the future.
Principles that we continually embrace strongly within our Group are a commitment to excellence, building a culture around service, a strong focus on employee engagement, ensuring our behaviours align with our goals and values, effective communication at all levels and the celebration of success.
John Wauchope
Our executive leadership team, led by David Mond, has been committed to our strategic objectives and taken a very positive ‘can do’ approach with all of our clients through innovative and attractive solutions. Our success has been recognised by our clients with awards from the insurance and banking industries. All of our executive managers and leaders continue to perform to a high level throughout our businesses and are acknowledged leaders in the industry.
Chairman
Our major business units have all produced excellent results – Recoveries Corporation Pty Ltd – our main operating entity and Mason Black Lawyers – our legal arm operating nationally on behalf of our clients. On behalf of our clients we collected from client debtors around $700,000,000 in the year, generating revenue of $37,249,000. Our overall financial performance in FY14/15 exceeded our expectations and resulted in an EBITDA of $7,532,000. 16
Managing Director & CEO’s Message This year has been a pivotal year for the Recoveriescorp Group in terms of growth and success. We won the ANZIIF award for ‘Service Provider to the Insurance Industry’. We made a strategic decision to only enter these awards every two years and I’m proud to say that recoveriescorp has won this award in the last three consecutive years that we have submitted an application. The ANZIIF awards measure best practice and achievement in service provision and not only did we win the award, but we were the only insurance claims recovery company selected as a finalist for the award.
What’s most important for us is that our clients universally placed recoveriescorp in the ‘trusted partner’ quadrant, which speaks to not just our proven record in delivering operational excellence but also our ability to develop relationships with our clients that are based on mutual trust, respect and confidence. Some of the key strengths identified by our clients included the quality of our senior personnel, our approach to relationship management, our values based culture that ensures honest and transparent client relationships, our ability to flex capacity at short notice and the innovation we have been able to introduce in analytics and reporting. The improvements recommended included upskilling some of our junior personnel, exploring new ways to demonstrate thought leadership and to share knowledge with our client partners and to continue to leverage our analytic capabilities for the benefit of our clients.
This award is testament to the great workforce that we have built at recoveriescorp, a workforce that is committed to working hard to achieve results for our clients and to ensuring that recoveriescorp maintains our excellent reputation as a leader within the industry. Our culture differentiates us from our competitors and is one of the key reasons why our staff choose to stay with us. Over the last three years we have reduced our staff turnover to a level that is well below the average for the industry. We conduct regular surveys of our staff to gauge their engagement with the company and it was pleasing to see that engagement levels increased this year by 8% over last year.
From a financial perspective we have celebrated a very profitable year with an EBITDA growth of 71% over the last year. My executive team has played a critical role in creating the winning combination that has driven our success. We have built a strong, collegiate executive team who connect and engage openly, honestly, courageously and with goodwill and who work not just for the business but also for each other. The sum of the parts will result in success for all, and that is why we see our clients working with us on a collaborative basis as a major input for sustained success.
Our staff regularly comment in the surveys about how they value being listened to and having their ideas for improvement implemented. This has also been the feedback from our clients about the way that recoveriescorp operates. Every year we conduct a Client Listening Survey where we engage independent researchers to interview our clients and ascertain their satisfaction with the service we are providing and to identify areas for further improvement. In the 2015 research, recoveriescorp achieved an outstanding Net Promoter Score (NPS) of +52.5, a result that the researchers tell us establishes recoveriescorp as the benchmark for other business to business organisations on their database and puts us in the top 10% overall for all organisations who undertake similar research. It’s alarming to know that the average NPS on their database is -10!
In 2016 the Recoveriescorp Group will achieve an important milestone in our history – our 25th anniversary. With our continually enhanced reputation and strong team we’re confident of the future ahead. David Mond
Managing Director & CEO 17
Board of Directors A founder of Recoveries Corporation and its former Chairman, David was appointed Managing Director and CEO of Recoveries Corporation Group Limited in 2007. David is passionate about driving the growth of the Group businesses and continually enhancing client services and the use of technology.
Chairman of Recoveries Corporation Group Limited since 2007, John has extensive experience in the insurance/finance sector. He holds board positions with private and not-for-profit companies involved in legal services, risk management, partnership marketing and community health. His public sector experience includes local and state government, with a number of board appointments to statutory bodies including the Country Fire Authority and Western Water Corporation (Deputy Chairman).
John Wauchope Chairman
He holds a Bachelor of Economics degree, is a Fellow Certified Practising Accountant (FCPA) specialising in Taxation, a Fellow of the Tax Institute of Australia, a Member of the Australian Institute of Company Directors and has served on CPA Australia committees of Company Directors.
John is a Fellow of both the Australian Institute of Management and of the Australian Institute of Company Directors.
David Mond
John is an avid gardener and spends many hours at home enjoying the garden he and his wife Julie, have spent over 20 years creating.
Managing Director and CEO
Leon has practiced as a Litigation Lawyer for 40 years in all jurisdictions of Australia. A founder of recoveriescorp and Mason Black Lawyers, Leon has built long-standing relationships with recoveriescorp’s clients and has been a key driver in the company’s success.
Leon Sholl Director
David is a Carlton Football Club supporter and enjoys spending weekends attending the games.
Joan was previously a CEO of the Australian and New Zealand Institute of Insurance and Finance for the past 16 years. She was responsible for unifying the state-based insurance institutes and merging the national body with the peak organisation in New Zealand. Prior to this, Joan spent a number of years working overseas at senior management level and was responsible for the development of several major commercial projects including a chemo-thermal mechanical pulp mill, a shopping complex, an office block and converting a disused quarry to a landfill site.
Leon is heavily involved in the daily management of the business, particularly all legal matters, compliance and governance. Leon has represented the following insurance companies at different times over the last 35 years: T & G Fire & General, CML Fire & General, GRE General, HIH Insurance, FAI Insurances, Switzerland & General, Zurich Insurance, Lumley Insurance, QBE Insurance, Western QBE Insurance, MMI Insurance, RACV Insurance, NRMA Insurance, CGU Insurance, AAMI Insurance, Suncorp, GIO General Limited and HBA Insurance.
Joan Fitzpatrick Director
Leon is also a Carlton Football Club supporter and regularly follows his club’s games.
She currently holds a number of board and senior management positions including: Director of the Victorian Managed Insurance Authority, Chair of the Australian Reinsurance Pool Corporation, member of the World Vision Business Advisory Council and Greenfleet Advisory Board, Executive Director Bevington Group and Director of CREATE Foundation, a charity helping children and young people in care in Australia. Joan is a proud Geelong Football Club supporter and enjoys going to the games and supporting her club.
18
Our Leadership Team Board of Directors & Executive Team
19
Executive Team James joined recoveriescorp in 2010 as the Group Finance Manager. With over 20 years of experience working as a Chartered Accountant, James has worked with some of Australia’s leading Insurance and Financial Services organisations in a variety of roles, covering both operational and strategic responsibilities.
Nick joined recoveriescorp in January 2000 and is an excellent example of our policy of promoting from within. Possessing a results-oriented philosophy and a hunger for innovation, Nick has encouraged a continuous improvement within our operations and client relationship teams. Nick’s operations background teamed with his client relationship skills makes him well rounded across all facets of the business.
Nicholas Harrak Head of Government and Commercial
James is responsible for the Group’s varied financial and business support functions and direction.
Nick’s role is to lead the end-to-end Government and Commercial business unit with a focus on the continued improvement of service delivery, growth, profitability and people development.
James loves traveling with his family to all parts of the world.
James Higgins
Nick punishes himself by regularly participating in long charity fun runs.
Group Manager Finance & Administration
Ziggy has worked with recoveriescorp management since January 2008, assisting with business strategy. Ziggy has spent more than 20 years in executive leadership role. He became finance director at one of South Africa’s largest IT companies, founded an IT infrastructure and systems business, was appointed CEO to an Australian telecommunications company and has since worked in a range of industry sectors.
With more than 20 years of experience in the Insurance industry, Jonathan possesses a broad understanding of operations and strategic management at all levels. Jonathan brings with him a wealth of experience in the management of large teams, business critical projects, supplier relationships, budgeting and financial management. Jonathan’s role at recoveriescorp is to lead the end-to-end Insurance Recoveries Operations with a focus on the continued improvement of service delivery, growth, profitability and people development.
Jonathan Agnew Head of Insurance
Jonathan is a mad rugby union fan and loves to relax by watching the mighty All Blacks play whenever the opportunity presents itself. Otherwise any game of rugby union will do.
Ziggy Frankenfeld General Manager Strategy
20
Ziggy is responsible for the development and implementation of new strategies including related M&A activities to ensure recoveriescorp continues to achieve best practice and operate to its maximum capacity. Ziggy spends a lot of his time helping his sons with the operations of their gym and when he does get some spare time, he likes to spend it out on the boat fishing.
Jeff is a 20 year veteran of the IT industry who has always worked at the forefront of enabling technology. He began his career in engineering, specialising in project management and eventually moving into a commercial environment. During a six-year tenure in an academic environment he was involved in postgraduate and executive education and consulted to commerce industry on IT strategy.
Trudie has more than 25 years of experience in senior leadership roles across the government, insurance and finance sectors. She is an experienced organisational development manager with a proven background in strategic planning, change management and leadership development. She has a key focus on aligning the people and culture strategy to the business strategy of an organisation.
Trudie Balthazaar Group Manager People, Culture & Marketing
Trudie leads a team of HR, Recruitment, Learning and Development, and Marketing and Communication specialists to enhance and promote the brand of recoveriescorp and to develop an internal work environment that is values based.
Jeff Sussman Chief Technology Officer
In her spare time Trudie enjoys spending time with her two dogs, Jack and Millie and taking them on long walks and to the beach in summer.
Craig is a skilled IT professional with 20 years of experience in a variety of technical and leadership roles. For 15 of these years he has been working directly for recoveriescorp and Advanced Collection Systems. With a background in software development, Craig has been instrumental in implementing innovations in our collections system (ACS) and associated interfaces, driving business process improvements. His experience and understanding across different industry sectors has allowed him to effectively manage various client and IT relationships at all levels.
Craig Rowe Chief Information Officer
Craig is responsible for Information Technology operations and the Group’s strategic direction, ensuring current and future requirements are met. Craig tries to keep active outside of work, and is a keen golfer who says he doesn’t play anywhere near enough; but takes every opportunity he can.
21
Jeff’s knowledge and experience in the areas of document and process management combined with a strategic approach to technology will ensure recoveriescorp continues to develop the best technology solutions to support customer needs. Jeff has been fascinated by helicopters since childhood and channels this interest through building and flying scale helicopters. The hobby combines multiple skills from engineering through to the skills needed to pilot these craft.
Nick accepting the NAB supplier Award 2014.
22
Our Performance This year has been a pivotal year for Recoveries Corporation Group Ltd, with strong performances from all areas of the business.
Our motto for FY14/15. 23
Government & Commercial – Key Achievements and Projects • W e implemented a new web based workflow management system that provides greater integration with digital technology, streamlines our internal collection processes and is more user friendly for our customers.
staff within a very tight timeframe and the team has excelled from the outset, both in performance and behaviour consistent with our values. • O ur teams and staff were recognised in a number of industry awards over the year:
• W e implemented the latest version of diallers for our government clients. This has the most sophisticated dialler algorithm, enabling more staff to connect and speak to debtors at the same time, thereby maximising our collection capacity.
– Our NAB team won the NAB Service Provider of the Year award – Our Centrelink team was selected as one of the three finalists in the Auscontact Contact Centre awards
• W e partnered with Fuji Xerox to implement an email communication project. We can now send digital letters that are completely streamlined and controlled. As well as satisfying the greater desire of society at large for email communication, our ability to progressively convert correspondence to email supports our environmental objectives.
– Our CBA team was a finalist in the Credit Team of the Year awards – Two of our staff were finalists in the AICM Young Professional of the Year awards – One of our emerging leaders won the Victorian Auscontact Contact Centre Professional award
• W e developed and launched a purpose-built people search system. This enables us to provide a fully integrated people search service that facilitates effective workflow management of trace requests in and out. We are currently speaking to our clients to ascertain how this database can benefit their collections processes, either as part of the overall collections service we provide or as a stand-alone service.
• S taff engagement increased by 8% over the year, with staff citing enhanced communication, the new bonus structure and consistency in leadership as the key improvements. • W e achieved an outstanding NPS of +62 from our Commercial clients and +50 for our Government clients, with the overwhelming majority of our clients placing recoveriescorp in the ‘Trusted Partner’ quadrant. Clients praised recoveriescorp for our consistency of performance, collaboration and alignment in values.
• W e implemented a new reward and recognition program to recognise and reward consistent performers with a scaled bonus structure that has been well received by staff. • W e successfully tendered for an innovative insourcing service delivery model where our staff have been engaged to provide services from within our client’s workplace. We were able to recruit, induct and train 24
Challenges
Number of Accounts 600,000
400,000 500,000
Government Banking
300,000 400,000
Utilities Government Commercial Banking
200,000 300,000
Total Utilities
100,000 200,000 0 100,000 0
Changing the perception that we are facing a weakening economic outlook will continue to be a challenge in the coming year.
Number of Accounts
500,000 600,000
Looking Forward
Commercial Total
2011
2012
2013
2014
2015
2011
2012
2013
2014
2015
Next year we will work with our clients to reduce debt recycling and to gather and share intelligence. We will continue working in partnership with clients to deliver and implement debt prevention strategies.
Value of Accounts Value of Accounts $1,600,000,000 $1,400,000,000 $1,600,000,000 $1,200,000,000 Government
$1,400,000,000 $1,000,000,000
Banking
$1,200,000,000 $800,000,000
Utilities Government
$1,000,000,000 $600,000,000
Commercial Banking
$800,000,000 $400,000,000
Total Utilities
$600,000,000 $200,000,000
Commercial
$400,000,000 $0 $200,000,000 $0
Total
2011
2012
2013
2014
2015
2011
2012
2013
2014
2015
Julie the Victorian Winner of People’s Champion Award at Auscontact Awards. 25
Insurance – Key Achievements and Projects • W e won the ANZIIF ‘Service Provider to the Insurance Industry’ award again in 2015. We have made a strategic decision to enter this award every two years and it is a testament to our staff that recoveriescorp has won this award on the last three occasions that we competed.
• W e celebrated our fourth anniversary of the establishment of our Fiji office, which has grown significantly over the period to now hold 140 FTE staff. Over the last three years we have worked hard to build a team with skills to manage insurance recoveries and to develop local leaders. The team has gone from strength to strength each year and our hybrid model continues to support our ability to provide the best long term return to our clients.
• W e were delighted to welcome Auto and General as a new client. They are one of Australia’s fastest growing insurance companies and we have established a strong relationship from the start, mostly due to our aligned cultures and values.
• W e completely redeveloped a series of core training modules to enhance the knowledge and effectiveness of our staff in Australia and Fiji.
• W e were invited by a major client to participate in a complete ‘Lean Sigma’ claims review of the motor recovery process. We were delighted to provide one of our team leaders to be part of the project team as this is consistent with our aim of partnering with our clients to innovate and improve services. The review revealed that our internal processes at recoveriescorp were already highly efficient, however we were able to identify opportunities for IT connectivity and automation of processes between the two organisations which have served to eradicate bottlenecks and improve overall recovery results.
• W e introduced fortnightly legal training for our staff aimed at upskilling our staff so they have a better understanding of liability issues. This training allowed us to utilise the capabilities of our incorporated legal practice, Mason Black Lawyers, for our benefit and the benefit of our clients through improved recovery rates and access to a law firm with the right skills and culture to complement our recovery strategies. • W e improved our NPS across 100% of our clients in the 2015 Client Listening Survey. Our clients praised us for our consistency and reliability of results, our industry knowledge and expertise and the continuity of our management team. Clients also expressed full confidence in our unwavering protection of their brand.
• W e collaborated with another client to deliver a series of information sessions for their recovery and settlement staff in Brisbane. These sessions were initiated to increase the awareness of these staff of what we do at recoveriescorp and to build relationships so that we can support the client to maximise recovery rates and minimise recovery costs. The sessions have been very well received and we are looking to further this relationship in the coming year.
26
Challenges Delivering high value to clients at a reasonable commercial cost has meant we have had to continually evaluate and evolve our business model. This impacted slightly on our engagement levels this year but an action plan has been developed in consultation with staff to build engagement levels in the coming year.
Insurance Growth
194,000,000
206,000,000
166,000,000 137,000,000
Looking Forward
48,505
55,344
64,123
68,780
FY12
FY13
FY14
FY15
Files
Next year we will continue our investment in operational excellence training, we will continue to build our analytics capability and place a heavy focus on increasing uninsured recovery rates.
$Value
Tamandra – winner of the most creative dish prize in a charity bake off. 27
Rachael participating in Emerging Leaders Program.
28
Challenges
Mason Black Lawyers – Key Achievements and Projects
As the firm grows through mergers and acquisitions, the corporate cultures will also merge. The biggest challenge will be maintaining the culture of the firm and getting new staff to accept and adopt our culture and our values.
• T he total number of new instructions received throughout the year was up on FY13/14. We experienced a 17.3% increase in new instructions. • T he Small Claims Team has had a successful year. We have streamlined our systems so that they are as cost effective as possible. The paralegals now have an effective precedent database that has been built up over the last twelve months, which allows them to efficiently issue demands and legal proceedings.
Looking Forward Mason Black Lawyers conducted an indepth process to deliver an innovative marketing and development plan to grow the business in each area of the practice as well as through acquisitions.
• T he Contingent Team has become an established part of the business. • T he Workers Compensation Team has seen a substantial increase in the number of new instructions, particularly from GIO. In FY13/14 we received a total of 1,390 new instructions whereas the FY14/15 year saw us receive 2,249 new instructions. This is representing a 62% increase. • L egal training for recoveriescorp insurance staff was introduced. Insurance staff at recoveriescorp are trained in their teams and seek advice and clarification on matters, scenarios and offers of settlement. • M ason Black Lawyers merged with Kempsons Lawyers resulting in: • Doubling in staff numbers • Increased clientele base • Expanded service offering particularly in the property law, wills and estate, and small business law.
AICM networking session. 29
30
Team recoveriescorp at the Run for the Kids event.
Our People At recoveriescorp, we believe that our people are our most valuable asset.
Staff at 2014 Christmas Party. 31
Staff Engagement
Induction
The annual Staff Engagement Survey was conducted on our behalf by Aon Hewitt. The results for recoveriescorp were very positive, with an 8% increase in engagement.
Over the last financial year we implemented an enhanced induction process with an increased focus on a learn-do style of training. This includes mock calls, greater involvement of leaders in the classroom training and double jacking. Senior leaders and key staff across recoveriescorp, including first aid officers, wardens and QA officers have also been incorporated in the induction program as well as the senior leadership team. Seventy nine new staff were also onboarded using our on-line system, SilkRoad Onboarding.
This increase reflects the focus recoveriescorp places on building staff engagement. Following the 2014 engagement survey we undertook focus groups with all staff to present the findings and explore their suggestions for building engagement. These ideas formed an action plan that was progressively implemented over the year, including a revised bonus structure, the CSR program, staff reward program, communication sessions and enhanced training.
Next year we will introduce additional modules on client specific training within the 4 week induction program.
Next year we will again facilitate focus groups with all teams to review the results of the 2015 engagement survey and develop an action plan to keep building on the gains we have made with engagement as we seek to achieve a ‘Best Employer’ recognition.
Annualised Turnover Performance against target 35%
Career Planning
30%
We introduced a career planning service over the last quarter, together with a career guide and tools to support staff to proactively manage their career within recoveriescorp. The service aims to help staff to get a clearer idea of what they want from their career, to explore their career values and skills and create a development plan informed by a skills gap analysis to further their career at recoveriescorp.
25%
Early indications are that this initiative is highly valued by staff.
5%
29.31% 28.26% 25.52% 21.44%
21.24%
22.03% 20.93% 19.38% 19.25%
20% 15%
25.00%
20.91% 17.52% 13.92%
10%
Target 32
RCL
Fiji
Jun-15
May-15
Apr-15
Mar-15
Feb-15
Jan-15
Dec-14
Nov-14
Oct-14
Sep-14
Jul-14
Aug-14
0%
0%
Learning Management System
Effective Conversations
A total of twenty-four e-courses were developed and delivered via our on-line learning management system, SilkRoad Learning, over the year. This continues to be an effective and efficient delivery method for compliance training and client specific training. In addition to the monthly compliance assessments, we have used SilkRoad Learning to deliver training required for our ISO certifications. Feedback from our client audits continues to reinforce the importance of the introduction of SilkRoad Learning to deliver, track and report on training.
Sixty-four staff were enrolled in the newly designed Effective Conversations program that provides staff an opportunity to achieve a dual qualification of a Cert 4 in Frontline Management and a Cert 4 in Business. The program is delivered in partnership with an RTO and has been designed to build emotional intelligence, positive mindsets, communication and presentation skills as well as capabilities around workplace health and safety, operational planning and goal setting. Staff feedback in terms of the content of the course and its relevance to their roles and applications, to both work and life scenarios has been overwhelmingly positive, with particular mention being made of the ability of the facilitators to engage and challenge staff to apply the session learnings in a concrete and measurable way.
Emerging Leaders Program A new Aspire program was launched for emerging leaders. This aims to develop the knowledge, skills and emotional intelligence of our future leaders to ensure they are well prepared for any leadership roles that they succeed in achieving. The program commenced with a high impact experiential module and has been conducted monthly over ten months, with a focus on leadership flexibility, communication and coaching.
Operational Training Fifteen technical training modules were developed and delivered over the second half of the year across Australia and Fiji. These modules have been developed in an improved format, which will be rolled out in the development of future training modules.
The program continues to be well received by participants and a number of the current and past participants have already been promoted into leadership roles and appear to be well prepared for these roles as a result of their increased confidence and insight. The program will continue next year.
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Alex and Stuart shaving their hair for the World’s Greatest Shave.
Recoveriescorp seeks to be a place where talented people want to join, stay, grow and be challenged. Service Milestones Awards 5 Years Service Award
10 Years Service Award
15 Years Service Award
Suzanne Stiglic
Adrian Battistin
Craig Rowe
Kushan Gunesekera
Marilyn Pilling
Nick Harrak
Prashant Mathur Brooke Webster Chris Traikos Sravanthi Maddipudi Michael Carroll Melissa Phillips Victor Tanoto Raymond Tjenderasa Kanchana Ratnayake Ziggy Frankenfeld
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Daniel & Amaran recognised at the AICM Young Credit Professional of the Year Awards.
Top Gun Award Winners during the Year Government & Commercial
Insurance
Amaran Navaratnam
Anthony Peluso
Anthony Taouk
Deepak Bhatia
Karishma Udeshi
Marilyn Pilling
Kumar Ghetia
Robyn Wilton
Leon Lippert
Sidat Dharmakirti
Monika Bali
Hashreet Narula
Rehen Paul
Janet Tuma
Troy Pianta
Maria Lemonis
Victor Natalizio
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Abhi – winner of the Contact Centre Professional of the Year at Auscontact Awards 2015.
Corporate Social Responsibility We launched a Corporate Social Responsibility program and partnered with three not-for-profit organisations to provide our staff an opportunity to contribute their time and money towards some worthwhile causes. Some of the key CSR initiatives implemented over the year included:
• C hildren’s Tumour Foundation – we donated $5,000 to the Foundation by sponsoring a table at their annual ‘Dining with Daisies’ Gala dinner. This year we hosted three families of children with Neurofibromatosis (NF) at the recoveriescorp table and staff also volunteered at the event
• T he formal launch of our CSR Program in February with speakers from our three charity partners
• V anuatu Cyclone Emergency Appeal – we raised $188 from gold coin donations which went towards providing humanitarian aid to people and communities affected by Cyclone Pam.
• The development and launch of our staff volunteering policy
In total we raised $12,500 for CSR activities for the year, surpassing our target of $10K. Staff also contributed 51 hours of volunteering to our charity partners and donated Christmas gifts and baked goods for fundraising activities.
• T he Christmas gift appeal for the CREATE Foundation, that collected 434 gifts for young people in care • T he CSR Bake Off to raise funds for the Asylum Seekers Resource Centre which also provided a fun opportunity for staff to donate baked goods and try some delicious food prepared by their colleagues • T he Royal Children’s Hospital Appeal – which raised $300 from gold coin donations • S taff participating in Run for the Kids – which raised $297 from the registration fee for our team of 10 staff who participated in the run
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Christmas gift wrapping for the CREATE Foundation.
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Effective Conversations graduates.
Corporate Governance Recoveriescorp is committed to operating effectively and efficiently, mitigating risks and safeguarding our future.
Staff celebrating Diwali. 39
Recoveries Corporation Group Ltd Board As the governing body of Recoveries Corporation Group Ltd (RCGL), the Board recognises and acknowledges its obligations to its shareholders, employees and others such as those that it has contractual arrangements with, to ensure that RCGL conducts its activities in accordance with the highest professional and ethical standards.
Corporate Governance
In broad terms, the Board is responsible for the proper governance of RCGL, its strategies and policies, monitoring organisational and management performance, appropriate resource allocation, risk management, compliance with statutory obligations and appointment of key positions and appropriate delegation to management to ensure that RCGL statutory duties are achieved.
• the financial accounts and the annual report of RCGL are approved
In discharging its overall corporate governance responsibilities the Board ensures that: • the affairs of RCGL are managed in a proper manner • processes and systems for achieving proper accountability, probity and openness in the conduct of RCGL operations are in place • there is appropriate transparency in its dealings and that there is effective communication of appropriate information • processes and procedures are in place through an effective and efficient Committee process to inform and facilitate the Board’s decisions
The Board’s role is one of stewardship not management. This includes the following primary functions:
• appropriate delegations to management are in place to ensure that the decisions of the Board can be properly implemented and that statutory or other requirements can be complied with
Strategic Direction The Board sets the strategic direction of RCGL. This includes:
The role of each Board member is to add value to the Board’s responsibilities as described in the Board Charter.
• approval and continuous review of the strategic plan designed to deliver shareholder objectives, meet stakeholder needs and ensure the continued growth and success of RCGL
Members have an obligation to comply, at all times, with both the spirit and the letter of the Board’s Code of Conduct. This includes requirements relating to confidentiality and conflicts of interest.
• agreement as to the risk profile of Recoveries Corporation and its risk mitigation strategies
To assist the Board in discharging its stewardship role, the Board has appointed specialist committees to focus on particular responsibilities of the Board and to provide informed advice and feedback to the Board on those responsibilities and where appropriate, to make recommendations to the Board. The report of the activities of these specialist Committees for the financial year follows.
• approval of budgets to ensure that there is appropriate resource allocation • reviewing the performance of the CEO
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Audit and Risk Committee The Audit and Risk Committee’s responsibilities encompass oversight of the risk management process including compliance, external audit (in so far as this is practicable) and internal audit. The Committee met three times over the year to undertake the responsibilities detailed below.
Compliance
The Audit & Risk Committee also provided advice to the Board on specific matters that the Board referred to it for consideration and advice.
(b) M ade appropriate enquiries to satisfy itself that all regulatory compliance matters, related to the business of RCGL, had been considered in the preparation of the financial statements
(a)
Audits (a)
The Chair of the Committee for the financial year was John Wauchope. At the end of the financial year the Chair of the Board appointed Joan Fitzpatrick as the new Chair of the Committee.
Reviewed and approved both the internal and external audit plans
(b) M et with PricewaterhouseCoopers to discuss and sign off the annual financial statements
Risk Management Framework (a)
eviewed the amended risk management framework for the R company and made recommendations for further research
(b) R eceived management reports on business continuity and were informed about the planned disaster recovery test (c)
et with management to ensure that RCGL has instituted M appropriate monitoring of compliance activities
Reviewed the Business Continuity Committee charter
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Staff participating in the charity bake-off.
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Compliance Committee The Compliance Committee has been established to drive the legislative compliance direction of the Recoveries Corporation Group Ltd. Chaired by the Corporate Counsel/Solicitor Director, the Compliance Committee identifies, assesses and implements actions to ensure compliance with current legislative changes and recommends the overall strategic direction for the Group around compliance. The Committee comprises membership of key personnel across the Group who hold roles that have a direct influence on the ability of the Group to ensure high levels of compliance in all of its activities. The Committee also monitors legislative changes affecting the business, monitors progress against compliance policies and initiatives, sets the required actions to ensure compliance with all legislative requirements and delegates responsibility for implementation of the required actions to management. With a focus on continuous improvement, the Committee reviews compliance results on an ongoing basis to set new strategies and policies.
Emerging Leaders Program.
The Compliance Committee met on two occasions over the financial year to undertake its duties and approved the following compliance related Group policies and procedures: the Privacy Policy, the Recording Access and Deletion Policy and Guidelines, the Hardship Policy, the Customer Protection Policy and the Compliments and Complaints procedure.
New starter graduation in Fiji.
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Remuneration Committee The Remuneration Committee has been established to take specific responsibility for recommending to the Board of Recoveries Corporation Group Ltd the policy and practice for appointments and the remuneration review process and terms and conditions for all employees. The Remuneration Committee, through the Chair, manages the appointment process of the Chief Executive Officer (CEO) and makes recommendations to the Board in relation to appointments and remuneration, including that of the CEO. The Remuneration Committee also advises and makes recommendations to the Board on employment issues.
• Reviewed and considered a management report incorporating an annual market review of salaries and noted recommendations for salary increases for employees for the 2015/16 financial year • Reviewed and made recommendations to the Board on the remuneration of the CEO for the 2015/16 financial year At the end of the financial year the Chair of the Remuneration Committee, John Wauchope, appointed Joan Fitzpatrick as the new Chair for the Committee. It was also agreed that the Terms of Reference of the Remuneration Committee be expanded to be the Remuneration and Capability Building Committee.
Over the financial year the Remuneration Committee met on two occasions and carried out the following delegated responsibilities: • Reviewed and considered reports from the Group Manager People, Culture and Marketing in relation to employment issues, including staff recruitment, engagement and retention • Reviewed and noted the annual review of key HR related policies for the Recoveries Corporation Group • Reviewed the results of the 2015 annual staff engagement survey and considered the action plan developed by management to address the key issues identified • Reviewed and noted a new performance plan template for executives across the Recoveries Corporation Group • Reviewed and considered the new succession planning process developed for the Recoveries Corporation Group
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Celebrating new starter graduation in Fiji.
ISO Certification ISO 27001 – Information Security: Protecting our clients’ data is a fundamental requirement especially in a business that deals with Personally Identifiable Information. This standard provides the framework for this protection. This standard is a very important and difficult one to implement and we are proud that we have been able to maintain this certification over the last 5 years.
Recoveriescorp is committed to the continual improvement of our internal processes to ensure enhanced business performance for our clients. This commitment is demonstrated by our certification to four international standards: ISO 9001 – Quality Management Systems (QMS) ISO 27001 – Information Security Management Systems (ISMS)
OHSAS 18001 – Health and Safety Management: Ensures we are safe at work.
ISO 14001 – Environmental Management Systems (EMS) OHSAS 18001 – Occupational Health & Safety Management System (OH&SMS)
ISO 14001 – Environmental Management Systems: Ensures we consider the impact of our business activities on the environment.
These certifications are highly valued by our clients, and importantly they guide our day-to-day activities and support a culture of excellence and integrity.
As part of the ISO requirements, we undertook both an internal and external audit over the year for all our four certification standards. We successfully met the requirements for all recertification audits, and were re-issued with the certifications. These will be valid for the next three years. Each one is monitored via a surveillance audit conducted annually.
Everyone working at recoveriescorp is expected to meet the compliance requirements of these standards and they form part of our employment contract with all staff. The following summarises the benefits of each standard: ISO 9001 – Quality Management: This standard ensures that our work procedures are clearly documented so that we can apply them consistently and deliver the same outcomes every day. This standard also provides the framework for constantly looking for improvements to the way we work to improve service delivery, effectiveness and efficiency.
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Emerging Leaders Program at Circus Oz.
Emerging Leaders Program at Circus Oz.
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Our Financial Performance The revenue of the Group grew in the last year by 16%, with increases across all of our business units.
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Overall Financial Position
Revenue
The Recoveries Corporation Group Ltd is in a very healthy financial position, having reported an EBITDA for the financial year ended 30 June 2015 of $7,532,000 which is a significant increase on the prior year.
$40,000 $35,000 $30,000 $25,000
The Group revenue continues to increase every year. For the year ending 30 June 2015, we saw a pleasing 16% increase and we expect to see a similar percentage increase into the next financial year.
$20,000 $15,000 $10,000 $5,000
Our balance sheet remains strong with a working capital ratio above our target of 1.00. Debt levels are manageable, with the overdraft facilities rarely used throughout the year.
FY12/13
FY13/14
Receipts from Clients
Balance Sheet
Revenue
FY14/15
$45,000 $40,000 Our current assets are predominantly cash and accounts receivable. $35,000 Our cash position continues to remain strong, with around $2m held $30,000 at the end of the financial year. $25,000
$ million FY12/13
FY13/14
FY14/15
Government
10,507
10,220
12,152
Commercial
6,231
7,970
9,962
10,136
10,730
11,071
2,448
3,086
4,064
29,322
32,006
37,249
Insurance Mason Black Lawyers
Total
$20,000
The Group’s accounts receivable have increased $15,000 in line with our $10,000 increased revenue for the year. However, our working capital ratio has $5,000 improved due to our current liabilities being maintained at prior year levels, with borrowings kept lower and all creditors being FY12/13 paid on time FY13/14 and within applicable terms of payments. We continue to invest for the future with an increase in our spend on PPE of 54% on the prior year.
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FY14/15
0 0 FY12/13
FY13/14
FY14/15
Collections
Receipts from Clients $45,000 $40,000
$ million
$35,000 $30,000
FY13/14
FY14/15
Government
544
533
Commercial
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62
Insurance
91
96
684
690
$25,000 $20,000 $15,000 $10,000 $5,000 FY12/13
FY13/14
FY14/15
Expenses Salaries and wages continue to be our largest single expenditure item, and comprise around 64% of our total expenses.
We collected over $2.5 million per business day during FY14/15, or around $700 million for the year.
A detailed review of each of our expenditure items, including salaries and wages, resulted in a number of projects throughout the year to drive efficiencies. These initiatives delivered a saving of around $0.5m for the financial year, and this followed a similar process carried out in the prior year which delivered over $1.0m of savings for the Group. Total expenses were again within 5% of the budgeted amount for the Group. All senior leaders are responsible for their budget and collaborate in our continuous Root and Branch cost program.
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Acknowledgments Recoveriescorp would like to acknowledge the contributions and achievements of our people. They are the foundation of our success and this annual report celebrates some of the activities they have participated in over the financial year.
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Recoveries Corporation Group Limited PHONE: 03 8627 0600 www.recoveriescorp.com.au