1 / 48

Agenda

Process: Into the footlights of performance - innovations from the UK and Ireland Dave Nicholas Chief Underwriter. Agenda. Agenda. Overview of the UK Overview of Ireland Innovations in Underwriting Innovations in Claims Conclusions Questions. Overview - UK. Overview - UK.

edison
Download Presentation

Agenda

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Process: Into the footlights of performance - innovations from the UK and IrelandDave NicholasChief Underwriter

  2. Agenda

  3. Agenda • Overview of the UK • Overview of Ireland • Innovations in Underwriting • Innovations in Claims • Conclusions • Questions

  4. Overview - UK

  5. Overview - UK • ‘07 – Banking crisis • National debt = £1.347 tn (Q4 2012) • 88.7% total GDP • Annual servicing cost = £43bn – or defence budget • Increasing £2.3bn week • Eurozone – biggest trading partner • Feb and April ‘13 – downgraded from AAA • Narrowly avoided triple dip recession • Austerity, low growth, high inflation

  6. Overview - Ireland

  7. Overview - Ireland • ‘05 = best quality of life….in the world! • First country in EU to enter recession • Banking / property crisis • 2nd highest level household debt in the world (190% household income) • National debt 117% GDP • ‘07 growth 4.7%, ‘09 -7.1% • 3 years negative growth • Downgraded ….twice! • Emigration ‘10 • Deep recession, austerity, but some growth!

  8. Eurozone – even worse!

  9. Eurozone – even worse!

  10. UK and Ireland – Insurance overview

  11. UK and Ireland – Insurance overview • Intermediary / Brokers • Consolidation • Banking crisis • big problem for Ireland, no mortgage market, insurers tarnised • Basic products • Life and CI, some tiered CI, little Disability • Price driven, comparisons • Customers / Intermediaries don’t like complexity • RDR • Rationalisation • Brand and customer journey key

  12. Individual New Business New contracts up 5% in 2009, 10% in 2010 and 2.7% in 2011 New business volumes down 2.2% in 2010 and down 2.4% in 2011 Source: ABI

  13. Mix of Business

  14. The future is bright(er)! • Innovation in recession • Technology • Welfare state opportunities • Direct to customer • Price comparison • Modular • Up-selling with age, needs • Corporate Partnerships • links to their brand/values • simple product and process • all about customer satisfaction • Protection gap widening • Life - £2.4 trillion (£100,000 per person) • Disability - £190 billion* *Swiss Re Term and Health Watch 2012

  15. Innovations

  16. Innovations • Underwriting • Process • Questions • Evidence • Claims • Process • Evidence

  17. Underwriting process

  18. Underwriting process • Underwriting systems • Significant increase STP • >70% some instances, 30% clean • Standard, rated and declined • More rated • Driven by data • EUS identifies key areas • Rules experts look at those areas in more detail • One company >10% rise 12 months • Number of rules questions now being looked at

  19. Underwriting process • Making decisions earlier • Focus on service and efficiency • Pre-sales enquiries • Rough idea of rating • Manages expectations (intermediary and client) • Completion rates • Distribution management / Non-disclosure • Data per intermediary • Number of clean, rated, smokers, under / over limits • Sentinel effect

  20. Underwriting Process - Telephony

  21. Underwriting – Process - Telephony • Telephony • Lots of little t • Data fed back to improve STP • Now the norm • >80,000 new instructions • Well received intermediary and client • Average turnaround 3 days • Mostly digestive, respiratory, mental and respiratory • Also lifestyle, occupation and pursuits Source MDG */13

  22. Underwriting - Process *Source MDG 2011 customer satisfaction survey

  23. Underwriting - Process • Disability • Complexity seen as a barrier • ‘Own occ’ for all • Financial guarantees, no underwriting at claim • Quality and Consistency • Audit well established (internal and external) • Gen Re UCS 2012 • Interesting results despite basic products • Using results to: • Prove consistency, plug gaps, focused training

  24. Underwriting - Questions

  25. Underwriting - Questions • Simplicity • Still looking at fewer questions • More succinct • Easier for layperson to understand • On-line making things easier • Age specific • Predictive modelling • Driving convictions / motorcycles • Focus on lifestyle (smoking an alcohol)

  26. Underwriting - Questions • Have you smoked or used any tobacco or nicotine products in the last 12 months? If yes, • How old were you when you started smoking? If no, • Have you ever smoked or used any tobacco or nicotine products? If yes, • How old were you when you started smoking? • How old were you when you stopped smoking? Depending on the answers, a nominal rating for ex smokers might apply • Using Non-Disclosure output………….

  27. IP Cause of claim

  28. IP Cause of claim

  29. Non-disclosure by impairment

  30. Observations • Statistics suggest missing valuable information • 3 questions • Why is it missing? • Why does it matter? • What can we do about it? • Why is this information missing? • Could be deliberate non-disclosure • or do customers not understand what we want? • TI data suggests the latter

  31. Observations • Why does it matter? • Isn’t it picked up at claim? • Yes but only if it has to be • Key is getting client back to work • Dealing with ND at claim has potential to sour relationship • Could result in longer payments • What can we do about it? • Change the question

  32. Typical application form Have you ever had, suffered with or sought medical advice for: Stroke, brain haemorrhage or brain injury? Heart disease or disorder (including heart attack, angina, cardiomyopathy or heart valve disorder)? Insomnia, stress, anxiety, tension, depression, personality/mood or eating disorder, mental illness or breakdown, psychiatric condition or suicide attempt?

  33. What’s wrong? • Confusing mix of things within a single question • Mixture of: • symptoms e.g. anxiety, insomnia • diagnoses e.g. eating disorder • general categories e.g. psychiatric disorder • with treatment options e.g. counseling • Insomnia is so non-specific it is not useful. • People might omit things that they don’t think fall into specific categories. Thus something that is not thought of as a psychiatric disorder would not be reported.

  34. Why change and not just interview? • Big T is one solution • Has been successful particularly with IP but….. • Cost implications • No STP at all • Not everyone is withholding information • Despite improved scripts long calls unavoidable • Adverse customer experience • Over disclosure all questions asked • Statistic show claims / ND is one or two areas • opportunity for little t? • It is quicker • It is cheaper • BUT……you need disclosure first and that’s the problem

  35. So what should we ask? Have you experienced any mental or psychological distress in any form over the last X years? Not specific but it is sensitive. Would probably trigger need for additional information but a good TI script should clarify the nature of the problem. Over the last x years have you been bothered by periods of feeling down, depressed or hopeless? Over the last x years have you often been bothered by periods when you have experienced little interest or pleasure in doing things? Over the past x years have you experienced periods of anxiety or worry that have caused you distress?

  36. Underwriting - Evidence • Increasing NMLs • on back of non-disclosure data • From distribution management • Paramedicals • Replacing GPRs as first line of evidence some ages • Fewer HIV • Historical data analysis - £1m – £1.5m • Financial evidence • independent verification • Internet evidence • SARS

  37. Underwriting – Evidence - SARS • Request for full information on individual • Uses Data Protection Act legislation not Access to Medical Reports • Within 40 days, usually 10! (GPR 20+) • Small fee…..but will pay more (SARS £10-£50, GPR £100+) • More rated, more postpones, more declines • Easier to asses as no information missing • Not as time consuming as you might think • Guarantees claim (almost!) • STP the problem!

  38. Claims Statistics In 2011: • £6.7 million (all products) • 97% of life insurance claims were paid • 92% of CI claims being paid (up from 80% in 2005) • Average pay-out: • Life £46,000 • CI £59,000 • IP £14,000 (average pay out 5 yrs) Still negative perception that we don’t pay claims. Source ABI 2011

  39. Claims – process and evidence • Tele-claims • Paying them quicker • Customer or insurer? • Significant reduction (2 days not 21) • Waiving grant of probate • Alternative reference sources • Balance, need to understand grieving process • Tendency to phone customer too much

  40. Claims – process and evidence • CI definitions • easier to understand / future proof, Troponins • Positive press • SARS could have considerable impact!

  41. Conclusion

  42. Conclusion • Both UK and Irish economies in recession! • Changes to welfare system could create insurance opportunities • Investment in underwriting systems means most business ‘straight through’ • Most innovative idea may be to get evidence on everyone! • Balance between paying claims quicker and an adverse customer experience • We’ve done process to death, now need to look at products!

  43. Questions

More Related