How Automated Underwriting Engine and Analytics Software can transform
insurers’ new business growth
3rd Asia Insurance CIO Technology Summit 2014
Raphael P
P. Young
Senior Vice President, Asia Pacific Ex.Japan
Munich Re Automation Solutions
Agenda
Item
1. WHAT – are we seeing in Asia?
2 WHY – automate?
2.
3. HOW – is it done? Case Studies
Background
1. Munich Re Automation Solutions Ltd - a Munich Re subsidiary
2. Software company - life insurance new business underwriting solutions only
3. In business for 28 years
4. Offices in Ireland*, USA, Germany, Singapore, Australia and Japan
5. Software & Reinsurance businesses work closely together to bring together
market
k t winning
i i new business
b i
underwriting
d
iti solutions
l ti
t insurers
to
i
globally
l b ll
Agenda
Item
1. WHAT – are we seeing in Asia?
2 WHY – automate?
2.
3. HOW – is it done? Case Studies
What we
we’re
re seeing in Asia…
1.
It’s all about growth & building capability for future
(a) Growth through New channels & products (protection) and improved product penetration
(b) Growth through a more compelling service proposition
2
2.
Major move to electronic new business and auto-Underwriting (aUW)

Good for the business: ↓ costs,↑ scalability

Good for intermediaries (speed, no rework, more productive) AND good for customers

A lot of interests from Indonesia, Philippines, Malaysia in addition to HK, Singapore, China, Taiwan
3.
Beyond the eApp to auto-Underwriting

T provide
To
id reall value
l to di
distributors
ib
& customers ((once and
dd
done, iimmediate
di
d
decisions)
i i
)

Move to more profitable protection products – high STP is key to grow… underwriters are scarce

eDistribution investment is taking the long view (future proofed solution, no cost blow out or rework)
4.
Service proposition is a key battleground of the future - Focus on “Real Value”

Immediate decisions freeing up agent’s time to focus on sales

Attract a younger, dynamic generation of agents

Constant improvement in experience (e.g. reduced/improve questions, call centre handover, add new
products/features, constant process improvements)
6
What we
we’re
re seeing in Asia…cont.
5. “Everyone”
y
is going
g g Mobile

“It’s all about the experience”… and must be compelling across all devices

Offline is a key requirement
6. Predictable long term cost

Lots of regular change in this aUW area is necessary for success (best practice clients schedule rule
changes monthly)

Self sufficiency from IT and vendor is key & no long term lock-in
7. Sharp
p focus on analytics
y
for better business decision-making
g

Now that eData is available, the trick is turning it into actionable intelligence… quickly and cheaply

Provide business managers with insightful (dashboards) they can act on

Amplified in a regional context
…aUW is half the story, Analytics is the other half
7
eApps vs aUW
 eSub eases application
pp
submission p
process,, but underwhelming
g advantage
g
post submission
 aUW delivers superior benefits: risk management / compliance; buying
experience; product development, MIS drives business decision-making,
reduced evidence costs, reduced NTU’s, etc
 aUW provides a flexible platform to ensure long term sustainable advantage
 Launch new channels, products, markets and languages quickly
 Fit-for-purpose aUW & Analytics turns underwriting into a key business enabler
 Very dynamic part of eBusiness system. Constant change is critical to success.
 Solution must fully empower underwriters & actuaries. Keep IT and the vendor away
…. And the real work starts after p
project
j
completion
p
8
Agenda
Item
1. WHAT – are we seeing in Asia?
2 WHY – automate?
2.
3. HOW – is it done? Case Studies
How automated underwriting
g solutions create value
New business process
traditional
powered by aUW solutions
Specific case management
3
4
(together with RI)
2
Qualified medical U/W
U/W com
mplexity
(e.g. laboratory and doctor reports)
3
aUW
Simple medical U/W
(e.g. questionnaires)
Clean Cases
Proce
essing dayys
U/W cost
c
4
+
1
2
1
(no further medical U/W necessary)
-
Automated underwriting is about increasing standardisation in the process
10
Benefits to yyour business
 Re-engineering
g
g distribution,, new p
products,, scalability
y
 Compelling and differentiated customer experience
 Quick underwriting decisions and reduced sales leakage
Growth
 Faster acceptance decisions and better customer service delivery
 Remove errors and re-work in applications submitted
 Can process up to 5 times more new business with no increase in
Improve business
efficiency
ffi i
/ reduce
d
costs
customer service staff
 No bottlenecks during business peaks and sales incentives
 STP, underwriting automation and system integration reduces the
cost of customer acquisition
acquisition, new business and underwriting
processes
Significant benefits to the business and the customer
11
Benefits to yyour business
 Data available from e-apps can drive evidence based decisions for
Governance and
Risk Management
product design, pricing and underwriting philosophy
 Ensures consistency of underwriting decisions
 Ability to scale operating model – cope with increasing new
Maximise corporate
agility
business volumes
 Easier to launch new product and distribution channels quickly
 Easier to adapt underwriting philosophy and strategy to rapidly
changing environment
Significant governance and strategic benefits to the business
12
aUW Benefits Summary
Business leaders
Underwriters &
Actuaries
Business
Development
IT
Applicant
pp
 Increased sales
 Shorter sales cycles
 Easy integration via
flexible config tools
 Fast decisions
 Reduced
educed costs
 Frees up
underwriters to
“underwrite”
underwrite
 Increased
profitability
 Accurate and
consistent decisions
 Leapfrog
p g
competition
 Underwriters
become key
business enablers
 High STP rates
 Solid p
platform
foundation for
growth
 Long term value
 Strategic visibility
into business
 Enhanced
reinsurance
partnership
 “Constant
improvement”
improvement
culture enabled
 No need for IT or
vendor involvement
in changes
 Analytics key for
product insights
 More
oed
diverse
e se
distribution
channels
 Improve product
penetration (up-sell
(up sell
protection products)
 Innovate quickly
 Enhanced
attractiveness of
protection products
 Loyal, more
productive
intermediaries
 Attract /recruit
intermediaries
 Easy upgrade path
and maintenance
 Integrated analytics
across NBP
 Could save $
millions from “data
analytics budget”
 Better service /
experience of
buying protection
 Broader suite of
products suited to
their needs
 Fully control the
journey/experience
that is presented to
each applicant
 Self sufficient from
vendor
13
Facilitating
g future success
Unlocking the data
 Utilise a reporting tool and
resource skills to analyse
y
 Target customers and
manage distribution
 Link & analyse application
data, policyholder data and
claims data to shape product
proposition, pricing and
acquisition models
“Money is a value business, information is a growth business”
14
Continual data analysis is critical for success
1. Define measureable and achievable goals

Measure
Discover


Change
Analyse

Reduce Operational Costs

Reduce referrals to manual underwriting

Reduce medical evidence costs
Increase Premium Income

Reduce not completed cases

Discover product opportunities
Improve Claims Experience

Identify early under disclosure/anti-selection

Link underwriting disclosures with claim outcomes
Improve Compliance

Consistent underwriting throughout the portfolio
2. Adopt a continuous process to enhance your
proposition
Framework to deliver multiple business benefits
15
Business Analytics Reports Library
Our Business Analytics has pre-defined, out-of-the-box reports library which enables clear and deep
business insights immediately
immediately.
Dashboards
• Home dashboard
• Rules
R l performance
f
dashboards
d hb d
• Underwriting outcomes results dashboard
R l Performance
Rules
P f
T
Tuning
i
a.
b.
c
c.
d.
Base Questions answered
Condition completeness
Condition effectiveness
Initial UW effectiveness
Distribution Management
a.
b.
c.
d.
Agent Behavior: Case Statistics
Agent Behaviour: Life Statistics
T 25 Agents
Top
A
t by
b Case
C
Status
St t
Product Breakdown by Agent
Sales
a.
Sales Breakdown
Underwriting Philosophy
a.
b.
c.
d.
e.
f.
g.
h.
i.
Case Information
Life statistics
Top
p 25 Conditions
Top 25 Conditions with Premium Loadings Actions
Top 25 Conditions with Sum Assured Loadings Actions
Top 25 Evidence
Top 25 Exclusions
Top 25 Policy Conditions
Top 25 Combinations
Confidential document
16
Dashboards – overall performance
Agile reporting with new insights for management
Underwriting
g rules performance
Enhance rules performance for operational efficiencies
Underwriting philosophy reports
Disclosures with premium loadings actions – medical, occupational, pursuits
Link to claims data for pricing
19
Medical evidence costs
Which disclosures are causing you most cost?
Anal se policy
Analyse
polic completion rates – efficiencies,
efficiencies niche market offers
20
Distribution management
g
Product and benefit sales by each agent.
Product profitability of Agents
21
Distribution
s bu o management
a age e
Statistics such as the average age, % of drinkers & smokers
Assess the quality of business
22
Distribution management
g
Application statistics, % of cases issued; % issued at standard terms; average duration of
policy; average number of disclosures,
disclosures evidence requests,
requests exclusions etc.
etc
M
Measure
profitability
fit bilit off Agents
A
t
Agenda
Item
1. WHAT – are we seeing in Asia?
2 WHY – automate?
2.
3. HOW – is it done? Case Studies
Best Practice

refer to speaker
Asia Pacific

refer to speaker
26
Conclusion
 Automated underwriting offers insights not accessible in traditional processes.
 Unlocking the data can take your business to the next level.
 Ability to create a framework from portfolio insights to drive evidence based
decisions:
o pricing
o product design
o underwriting philosophy
o Improved risk management
o Distribution management
o Operational efficiencies
Automated underwriting insights puts your business in the drivers seat
27
Thank you very much
for your attention
© 201
13 Munich Re Automation
n Solutions Ltd
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