Emerging Technology and the Future of Distribution

Presentation given at the SOA Annual Meeting 2011

Transcript

1. Presenter: Kevin Pledge, FSA, FIA EMERGING TECHNOLOGIES AND THE FUTURE OF INSURANCE DISTRIBUTION SESSION 90 OCTOBER 19, 2011 Primary Competency: Strategic Insight & Integration
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3. “the future is already here - it just not very evenly distributed” 3 EMERGING TECHNOLOGIES AND THE FUTURE OF INSURANCE DISTRIBUTION
4. North America currently have automated UW considering automated UW not considering 4 EMERGING TECHNOLOGIES AND THE FUTURE OF INSURANCE DISTRIBUTION Source: 2011 Underwriting Survey - Hank George Inc., Select X Ltd.
5. Elsewhere currently have automated UW considering automated UW not considering 5 EMERGING TECHNOLOGIES AND THE FUTURE OF INSURANCE DISTRIBUTION Source: 2011 Underwriting Survey - Hank George Inc., Select X Ltd.
6. different products regulations market pressures technical barriers 6 EMERGING TECHNOLOGIES AND THE FUTURE OF INSURANCE DISTRIBUTION
7. electronic applications face amount threshold for lab and paramed preferred pricing MIB and MVR 7
9. 47 days 9 Source: 2009 LOMA Service Turnaround Times Survey – Term Products EMERGING TECHNOLOGIES AND THE FUTURE OF INSURANCE DISTRIBUTION
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11. • key drivers:- • issue time • cost • consistency • minimize invasiveness • new channel / market 11
12. COPERNICUS SS/G URE BUSINESS OBJECTIVES  Management of Risk  Complete, objective & consistent risk assessments  Minimising Underwriting Costs  Maximising immediate acceptance, reducing need for medical evidence  Philosophy contains over 10,000 Rules and 40,000 Assessments  Improving the Customer Experience  Configurable process allowing continual improvement through experience  Configured for each distribution channel  Maximising Business Opportunities & Conversion Rates  Immediate acceptance at POS maximised at ordinary rates, rated or with exclusions  Intelligence gathered used to help Up-Sell, Cross-Sell, Alternative Terms, Buy-Now  Enhanced Management Information  Full real time data analysis by distribution channel  Day to day portfolio management
13. obvious statement: slow decision = attrition by how much? 13 EMERGING TECHNOLOGIES AND THE FUTURE OF INSURANCE DISTRIBUTION
14. 0 20 40 60 80 100 Immediate Delay percent who said they would return 14 0 20 40 60 80 100 Immediate Delay percent who actually did return EMERGING TECHNOLOGIES AND THE FUTURE OF INSURANCE DISTRIBUTION
15. OUR MARKET STP RATES IN A PRICE DRIVEN MARKET 0% 10% 20% 30% 40% 50% 60% 70% 80% 2002 2004 2005 2007 2009 Acceptance Levels 75% of customers wasting time With SS/G 70%+ of customers get immediate decision
16. Products & Services Example Benefit Little ‘t’ Tele-U/W’ Little ‘t’ tele-UW 30% 4% POS/Big ‘T’ Initial Underwriting Reflexive Underwriting 20% Rated Acceptance 100% 72% 42% 8% Original Acceptance Declined NPWs 0% 0% Medical Evidence GPR/MER 6% 15% 68% 18% 4% 10% Total = Refer to Underwriter Tele-UW 8% 22% 11% Manual Decision 20% 6% 10% 4% 0% 0% 0% Evidence 15% Carry Forward 9%
17. change of emphasis tactical  strategic 17 EMERGING TECHNOLOGIES AND THE FUTURE OF INSURANCE DISTRIBUTION
18. New ways to interact New information in risk assessment Using data more effectively Underwriting speed Ease of case submission Sales support 18 EMERGING TECHNOLOGIES AND THE FUTURE OF INSURANCE DISTRIBUTION 
19. Acquisition Features  ‘Up Sell’, ‘Cross Sell’ and ‘Buy Now’  Revision of Terms at Point of Sale  POS Acceptance levels  70% + for Life  70% + for Critical Illness  45% - 55% for Income Protection Product Development  Rapid Product development through Configuration Deployment  Customer Website, Broker Website, Call Centre, Traditional Back Office Branding  Ability to white label within hours (through style sheets) and configuration  Ability to configure process and products rules according to channel/brand Copernicus SS/G - Business Acquisition Summary
20. control has shifted to the business user 20 EMERGING TECHNOLOGIES AND THE FUTURE OF INSURANCE DISTRIBUTION
21. Control of Product  Product Design - multi-life, multi benefit  Products Launch - speed of product launch  Rates - rapid re-pricing Control of Proposition  Access to Distribution – multi channel  Ability to Flex - to suit the way your customers want to do business Control of Process  Deployment - Self Serve, Call Centre or Back Office  Processing - data capture, screen sequencing, process sequencing  Underwriting Approach - POS U/W, Tele U/W, Back Office U/W Copernicus SS/G Business Control By Configuration – not Customisation
22. • Impact of immediate acceptance • 40% change mind • Impact of alternative offers 20% vs 40% perception 22 EMERGING TECHNOLOGIES AND THE FUTURE OF INSURANCE DISTRIBUTION
23. predictions for discussion 23 EMERGING TECHNOLOGIES AND THE FUTURE OF INSURANCE DISTRIBUTION
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29. 29 Michel de Nostradame 1503 - 1566 King Henry II of France 1519 - 1559 EMERGING TECHNOLOGIES AND THE FUTURE OF INSURANCE DISTRIBUTION
30. predictions– data…. • more sophisticated data analysis • greater connectivity to external data 30 EMERGING TECHNOLOGIES AND THE FUTURE OF INSURANCE DISTRIBUTION
31. predictions– distribution… • greater control given to the distributor • more underwriting knowledge at point of sale • distributor presenting underwritten cases to insurance co.s 31 EMERGING TECHNOLOGIES AND THE FUTURE OF INSURANCE DISTRIBUTION
32. • Kevin is CEO and Co-Founder of Insight Decision Solutions. • Kevin has written several articles and is co-author of “The Analysis of Insurance Earnings” (2008). • He has served on three SOA section councils and Microsoft’s Partner Advisory Council for 5 years. • Kevin qualified as a Fellow of the Institute of Actuaries (UK) in 1992 and a Fellow of the Society of Actuaries (US) in 2004. kpledge@insightdecision.com 905 475 3282 x 224 @kevinpledge http://ca.linkedin.com/in/kevinpledge KEVIN PLEDGE 32