Question 5 Learning Outcome 4 (30 marks) You are the Claims Director for MMB DAC, an insurer. MMB DAC intends to reduce its claims handling costs, whilst maintaining its current high level of service. MMB DAC is therefore going to outsource its claims handling activities, for all claims up to 10,000. After reviewing potential claims handling partners, SB Ltd has been identified as the preferred outsourcing provider. As part of the review process, the following information has been provided about SB Ltd: Gross claims handling fees Average claim fee Salaries of staff Number of staff No. of complaints Average no. of days to settle a claim 2018 2019 2020 2018 2019 2020 2018 2019 2020 2018 2019 2020 2018 2019 2020 2018 2019 2020 2018 2019 2020 32 million 35.5 million 45 million 450 465 410 15 million 15.5 million 16 million 600 620 620 2.5 million 3.5 million 6 million 750 790 1 ,200 10 days 12 days 20 days You are required to analyse the above information and come to a decision on the appointment of SB Ltd. a) b) Explain, with justification, based on the information above, five issues that need further investigation by MMB DAC. (20 marks) Identify, with justification, one additional item of financial information for each of the issues identified in (a) above that will assist in your decision making. (10 marks)