Business Objective Categories Our Strategic Imperatives ensure we remain focused on the activities that will position Selective for consistent, long-term success. To ensure alignment to our Strategic Imperatives, employees should align their business objectives to the Strategic Business Framework. When creating a business objective, employees and managers will choose a Category selection via a drop down list of the Strategic Imperatives. Definitions of the Business Objectives Category options are as follows: Create a Highly Engaged Team Attract, develop and retain top caliber talent; Foster an inclusive culture that encourages innovation, empowerment, engagement and accountability; and Develop and implement a holistic Strategic Workforce Planning initiative. The cornerstone of a successful organization is its people. Going one step further is the understanding that, when we come together with a clear vision, we exponentially increase the chances of our success. We recognize that the faces of our customers are changing and that s why we are developing and implementing an inclusion and diversity plan to help us attract, develop, and retain top-caliber employees that reflect the world around us. We want to ensure that Selective continues to be an attractive employer for the best in the insurance business by evaluating our compensation structure and assessing how we provide our employees the ability to establish new skills and how we best create opportunities for employees to advance within our business. Our goal is to foster a more inclusive culture that encourages and rewards innovation, empowerment, engagement, and accountability. 1
Aligning Resources for Profitable Growth Drive continuous underwriting and claims improvement; Cultivate a committed, diverse and agile distribution force; Maximize market share in our existing geographic footprint; and Build out a national footprint while maintaining our relationship model. Our success is rooted in a model that provides our field people with advanced analytical underwriting and claims tools and considerable autonomy to make the right decisions for our clients and our business. Initiatives within this imperative will ensure that we achieve our growth plans. For example, we will develop and implement state plans to maximize our market share by increasing our distribution partners market share and our share-of-wallet. Our long-term goal is to achieve a 3% market share across our primary footprint in Commercial Lines and 1% in Personal Lines. Another initiative is to establish a plan to better penetrate diverse customer markets across all three of our core business segments standard Commercial Lines, standard Personal Lines, and Excess and Surplus Lines (E&S). While we must continue to focus on maximizing market share in our current regions, we believe that we can also expand our profitable growth opportunities by working toward a 50-state footprint for our standard lines. In 2015, we will establish a multi-year plan for expanding our geographic footprint and address potential barriers to increased scale, starting by realigning our management structure and improving our technology infrastructure. Delivering a Superior Omni-Channel Customer Experience Deliver a consistent customer experience across all communication channels; Create service alignment between Selective and its distribution partners; and Build brand through customer advocacy. 2
Research has shown that delivering a superior customer experience across all customer touch points improves a company s bottom line. It transforms customers into ambassadors, who are loyal to Selective and recommend us to potential new customers. We must create a positive, effortless experience for customers. Therefore, we have initiated a full assessment of our current omni-channel capabilities and will use the findings to build an omni-channel roadmap by the end of 2015. We want to provide our customers 24/7 access to transactional capabilities and information. Customers are beginning to expect this level of access from every business and, while many insurers offer such solutions in the personal lines space, we want to be a leader in this area for the small commercial market. We have already taken a number of steps toward this goal, like creating a web-based portal where about 20% of our customers access basic information about their account. We will be developing goals and measures to increase portal use and provide customers access to more information and transaction capabilities. To provide customers with channel options, we introduced a customer mobile app and added functionality in 2014, and will add more in 2015. To bring this all together, we have created a multi-disciplinary task force with team members from across the organization to look holistically at the customer experience and put us on track to achieve best-in-class status. Leverage Data and Treat Information as a Valued Corporate Asset Instill enterprise-wide discipline in the capture and utilization of data; Expand the use of advanced analytics across Insurance Operations; and Embrace analytics to optimize marketing, operations and distribution channel. Our sophisticated underwriting and claims analytics have long been one of Selective s competitive advantages. We are now investing in ways to leverage big data and analytics to expand our capabilities in existing areas, better target customers suited for the Selective advantage, and match our distribution partners to our opportunities. 3
To start, we are aligning our modeling and business intelligence functions to allow us to better capitalize on these capabilities, improve profitability, and grow the organization. We ll also be coordinating and raising the profile of the Marketing and Customer Experience Management disciplines so they are better positioned to create positive change. The increased importance of direct engagement with our customers and our aspiration to expand geographically makes building brand awareness a key priority. We are now developing digital marketing strategies, including a social media presence, to promote and expand recognition of our value proposition to a wider range of customers. Optimize Operational Effectiveness and Efficiency Create ease of doing business and simplicity through solutions that put us ahead of the competition; Develop and drive best practices in process to optimize short- and long-term performance; and Develop a highly-scalable organization that addresses people, process, and technology. We have ambitious plans for our business and our organization must have the capacity to meet the demands of higher levels of growth and address the changes that will enable us to succeed in a new environment. Accordingly, we are investing to develop a highly scalable IT organization, which also will enable us to simplify our processes and operate more effectively. This is a multi-year plan that will focus first on our core Commercial Lines transactional system, CLAS, and follow with the ElitePac project, which will make it easier for us to build out our existing footprint and to open up new states. As we enhance the user experience, we will drive increased use of our technology by our distribution partners and customers and remove frictional cost from our transactions. We will also deliver on the projects to replace our billing and claims systems, improving our ability to grow the organization. 4
Of course, our commitment to establishing a world-class IT function must be complemented by a companywide commitment to find ways to do our jobs more effectively and efficiently in order to optimize both short- and long-term performance. All of us must voice and embrace ideas for improved efficiency. To that end, we will undertake a full external benchmarking of all aspects of our business with the goal of establishing a new lower expense ratio target. Operational We recognize that there may be business objectives that are part of normal business operations and, therefore, may not align to a Strategic Imperative. In those circumstances only, the Operational category may be selected. 5