Critical questions about Insurance, answered by Navdeep Arora

1. Question and Answer Series With With Navdeep Navdeep Arora Arora Source: https://www.quora.com/profile/Navdeep-Arora-43/

2. Q . What Q . What are the key technology trends to watch for in the insurance are the key technology trends to watch for in the insurance industry? industry? Answer 1. Growing expectations & demands from customers (value, omni-channel) and regulators (solvency) 2. Emergingrisks & developing markets necessitating digital architecture and solutions 3. Downward pressure on pricing from excess underwriting capacity (alternative capital) and decreasing demand for traditional reinsurance; shift in focus from ‘protection’ to ‘risk prevention, mitigation and diversification’ 4. Improved transparency of data on the buyer & seller side, stressing current distribution & broking models, especially in mature markets 5. External data, contextual intelligence & sensory feeds becoming more ‘predictive’ than historical loss data, and enabling personalisation of insurance 6. Ability to manage high velocity transactions and delivering at customer moments of truth becoming source of competitive advantage as lines of business (life, health, P&C) disappear; cross-sector partnerships, non-native capabilities and flexible technology architecture emerging as ‘table-stakes’ 7. Large scale migration of premium & profit pools across the value chain, customer segments, products & sectors Thread: https://bit.ly/2VYAq1n Note: Answers are based on author’s expertise and research. Views are personal

3. Q. Which Q. Which Insurtech Insurtechdistribution model gets it right? distribution model gets it right? Answer • Integrating digital and traditional channels to provide a consistent and seamless customer experience regardless of entry point a. Connecting all channels to new and legacy platforms to provide a single view of customer product holdings and enable policy administration b. Establishing a seamless transition between channels across entire purchase cycles • Co-developing new channels with customers and agents, by piloting new models and seeking advocacy to ‘roll-out’ model a. Recruiting volunteer ‘agents’ to co-develop, pilot and advocate the benefits of ‘digital channel enablement’ and multi-distribution channel model. Enables agent buy-in b. Using Crowd Sourcing to understanding customers’ needs and co-develop capabilities digital • Moving from a ‘push’ to ‘pull’ product and pricing strategy, providing common modularised products for customer tailoring, agnostic of channel a. Move away from channel specific products and prices to a common product construct and across all channels with ‘modular’ options to allow customers to tailor product to needs. Channel agnostic pricing b. Information query to existing book to prevent lower new business premiums for existing customers https://bit.ly/2Y5JUKN Note: Answers are based on author’s expertise and research. Views are personal

4. Q. Which Q. Which Insurtech Insurtechdistribution model gets it right? distribution model gets it right? Answer • Reinventing rating models using customer segment analytics to price on customer behaviour and life time value, not channel economics a. Customer segment behavioural analytics are applied into rating models to inform technical price on a ‘life time value’ basis. Pricing based on predictive indicators such as length of product holding, claims frequency, average claims cost, propensity for multi-product holdings, contact centre utilisation • Managing conflict by assigning all ‘direct’ sales to an agent by postcode and providing ‘trail commission’ to support retention a. Agents are awarded ‘trail’ commissions for all direct ‘new business’ sales of customers within allocated postcode. Agents are incentivised to promote carrier regardless of sales channel and provide service b. Improving agent productivity by leveraging ‘predictive analytics’ to provide ‘attractive’ target risk profiles • Capturing information from all customer touch-points for data analytics and machine learning, driving personalised customer journeys, consistent communications and pricing and next best action a. Capturing information on customer preferences and behaviours from ‘unstructured’ sources such as social media data and contact centre notes and ‘structured’ sources such as customer journey break-points b. Data used for machine learning, providing personalised customer journeys on digital channels and telephony scripts, next best action prompts connected to customer touch-points, recorded quotes for consistent pricing across channels https://bit.ly/2Y5JUKN Note: Answers are based on author’s expertise and research. Views are personal

5. Q. How do data analytics improve insurance claims processing? Q. How do data analytics improve insurance claims processing? Answer Leading practices in claims automation & analytics are: 1. Dramatic improvements in claims experience, claims indemnity leakage, and management (ALAE, and ULAE) expense over the last 2-3 years • Claims leakage down to 1-2 % for Physical Damage, and 4-6% percent for Bodily Injury • 15-20% reduction in claims management expense –across ALAE, and ULAE (allocated, and unallocated loss adjustment expenses) 2. End-to-end process and team ownership, lean methodologies, data analytics, and technology enablement transforming claims operating model • Clear end –to-end enterprise process, and execution ownership • Converging claims footprint • Total cost of ownership focus in extracting value (cost savings, customer experience, exposure mitigation) from claims supply chain 3. FNOL becoming the hub of clams operations, with a ‘do-it-right’ approach to ensure accurate data capture, customer experience, and downstream effectiveness 4. Data analytics evolving from insights to recommendations and suggested ‘course of action’ (claims machine learning) 5. ‘Increasing investments (and ROI) on fraud and recovery (subrogation and salvage) Note: Answers are based on author’s expertise and research. Views are personal https://bit.ly/2KzF9l1

6. Q. What Q. What is the most innovative development occurring in the Life Insurance is the most innovative development occurring in the Life Insurance industry? industry? Answer This is how the evolution of Life Insurance will be placed, based on my research and hence the developments occurring in the industry https://bit.ly/3bFqnVH Note: Answers are based on author’s expertise and research. Views are personal

7. Q. What Q. What are the good life insurance policies? are the good life insurance policies? Answer A good life insurance company depends upon your age, risks, financial assets and dependants. 1. You can start with a very simple term life policy that will provide death benefits for a specific number of years (e.g, 5 years) and then expire 2. A Whole life policy that covers your lifetime, and can build cash value through savings in addition to the protection benefits (death) for your beneficiaries 3. A Universal Life Policy is similar to a whole life policy except it gives you the flexibility to change the frequency and amount of premiums (once the first premium payment has been made) based on the case value accumulated in savings,. 4. In essence, a life insurance policy can provide a balanced combination of protection (death benefits) and savings, or just protection,. https://bit.ly/35um518 Note: Answers are based on author’s expertise and research. Views are personal

8. THANK YOU! Quora: https://www.quora.com/profile/Navdeep-Arora-43 Website: www.navdeeparora.com Slideshare: https://www.slideshare.net/NArora3 Facebook: https://www.facebook.com/InsNavdeepArora Twitter: https://twitter.com/InsNavdeepArora