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Improving the New Business Process
A Report from The SOA Committee on Life
Insurance Mortality & Underwriting Surveys
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Members of the Survey Subcommittee
• Sharon Smith, FALU, Chair
• Ev Kunzelman, FLMI
• Mark Swanson, FSA
• David Wylde, FSA
• SOA Staff:
– Jack Luff, FSA
– Korrel Rosenberg
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Overview of the Survey Report
The New Business Process
1. Application is sent to the company
2. Additional requirements are gathered
3. Underwriting is performed
4. Policy is delivered to approved applicants
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Overview of the Survey Report
The Report
1. Respondent Demographics
2. The Application Process
3. Changes to Underwriting Requirements
4. Underwriting Systems
5. Underwriting Resources
6. Effect of Past Changes on New Business Practices
7. Delivering the Policy
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The Application Process
For paper applications, what is the average number of days from
signature to received date?
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The Application Process
For paper applications, what percentage are received not in good order
(NIGO)?
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The Application Process
Any plans to introduce an electronic application in the future?
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Changes to Underwriting Requirements
How long ago was a change made to the company’s age and amount requirements?
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Changes to Underwriting Requirements
What was the effect of the change in requirements?
0 5 10 15 20 25 30 35 40
Cognitive or Functional Testing
Oral Fluid
Prescription Database Query
Tele-interview/Tele-application
Urinalysis
MVR
Blood Profile
APS Guidelines
Non-medical
Inspection Report
Paramedical
Resting ECG
Stress ECG
Medical Exam
Number of Responses
Increase (More Liberal) Decrease (More Conservative) No Change Not Applicable
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Changes to Underwriting Requirements
When will the company consider next reviewing or changing underwriting
requirements?
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Changes to Underwriting Requirements
What will be the effect of anticipated requirement changes?
0 5 10 15 20 25 30 35
MVR
Cognitive or Functional Testing
Oral Fluid
Urinalysis
Blood Profile
Prescription Database Query
Inspection Report
Resting ECG
Medical Exam
Stress ECG
Non-medical
Paramedical
Tele-interview/Tele-application
APS Guidelines
Number of Responses
Increase (More Liberal) Decrease (More Conservative) No Change Not Applicable
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Changes to Underwriting Requirements
What requirements have been added in the past 5 years and what
was the primary reason for the addition?
0 2 4 6 8 10 12 14 16 18
Stress ECG
Medical Exams
Chest X-Ray
Blood Test - CEA
Other: MVR
Other: Database e-Searches
Other: Hepatitis
Blood Profile Test - hsCRP
Other: PSA
Urine Test - Microalbuminuria
Other: Prescription Database
Blood Profile Test - Glycohemoglobin
Tele-interviewing/Tele-application Limits
Blood Profile Test - NT-proBNP
Cognitive/Functional Tests
Number of Responses
Protective Value Faster Competition
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Changes to Underwriting Requirements
What requirements have been deleted in the past 5 years and what was
the primary reason for the deletion?
0 2 4 6 8 10 12 14 16 18
Urine Test - Microalbuminuria
Cognitive/Functional Tests
Blood Profile Test - NT-proBNP
Blood Profile Test - hsCRP
Blood Profile Test - Glycohemoglobin
Blood Test - CEA
Other: Not Indicated
Other: Meth Testing
Tele-interviewing/Tele-application Limits
Other: Oral Fluid
Medical Exams
Stress ECG
Chest X-Ray
Number of Responses
Protective Value Faster Competition
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How Evidence is Received
How is underwriting evidence received?
0 10 20 30 40 50 60 70
MVR
Lab Results
Stress ECG
ECG
Paramedical / Medical
APS
Number of Responses
Electronic Image Mail / Courier (paper) Fax Electronic Data
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Underwriting Systems
• Are applications and underwriting evidence imaged as part of
the new business workflow?
– Yes (front end)…83%
– Yes (back end)…10%
– No…7%
• For those companies with front end imaging, can the
underwriters choose which case to work on next?
– Yes…70%
– No...30%
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Automated Underwriting System
• Does the company have an automated underwriting
system that can make underwriting decisions?
– Yes…34%
– No…66%
• If you do not have an automated underwriting system,
are you planning to install one in the near future?
– Yes…38%
– No…62%
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Remote Underwriters
Do any of the company’s underwriters work remotely from home at least some of the
time? Yes…62% If yes, what percentage of underwriters?
0
1
2
3
4
5
Num
ber o
f Res
pond
ents
Percentage of Underwriters
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Underwriting Resources
Does the company have any specialized underwriting teams? (check all that apply)
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Effect of Past Changes to New Business
Practices
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Effect of Past Changes to Expected Mortality
What was the impact on expected mortality?
0 2 4 6 8 10 12 14 16 18 20
Urinalysis
Tele-interview / tele-application
Stress ECG
Resting ECG
Prescription Database query
Paramedical
Oral fluid
Non-medical
MVR (motor vehicle report)
Medical exam
Inspection report
Cognitive or functional testing
Blood profile
APS guidelines
Number of Responses
Increase Decrease No Change Unknown
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Effect of Past Changes to New Business Practices
Which changes increased the percentage of cases approved within 30 days? (check all that apply)
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Delivering the Policy
How are policies delivered to the policyowner? (check all that apply)
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Delivering the Policy
• For policies mailed directly to the policyowner or the agent, what
was the method of delivery? (check all that apply)
– Regular mail…86%
– Courier service…40%
– Express mail with confirmation…23%
• For policies delivered via regular mail or courier service, how is
delivery confirmed? (check all that apply)
– Signed delivery receipt…58%
– Delivery is not confirmed…55%
– Mail-back delivery receipt…18%
– Other…3%
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• For more information about this survey
– www.soa.org/research/experience-study/bus-practice-surveys/
• Contact me directly at
• Thank you!
Improving the New Business Process
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Hélène Chatelain VP NB & Chief Underwriter Transamerica Life Canada
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Distance
Underwriting
STP
Transamerica Life Canada
CRC April 2013
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Going Paperless
What began as an effort to be competitive in the insurance
industry to retain our underwriters from being swayed
over to our competitors, who offer remote underwriting
possibilities has evolved into a paperless workflow system to
then focus on a WORKBENCH for all the staff.
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The phylosophy and advantages
The goal of an upfront paperless office is to use paper more efficiently, not eliminate it altogether.
The most common advantages of going paperless upfront are:
• Increasing productivity
• Eliminating storage space
• Reducing expenses
• Working remotely
• Enhance customer service
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Advantages for Transamerica
First Implementation without a proper workflow engine:
All mail is received at Head Office no longer in the regional office
Any cheques to be deposited are done the same day instead of the day after.
No more mail cutoff time for mail deliveries to underwriters, we have a continuous workflow.
Easier to coordinate a business recovery plan.
Reduction of mail cost and office supplies.
Better control on work received that requires processing.
An easier overview of the business unit’s workflow status for management
First step towards becoming paperless
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Stage 1…Creativity workflow
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Project started September 2011 – name NULIFE
Phase 1:
Establish a solid foundation (both business and technology)
In order to build our capability to support our straight through processing effort and being able to provide solution for further development STP process and vision
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NULife Phase 1
• We leverage our front end scanning of documents into the new platform
• Automatically matches inbound documents
• Proper follow-up training where needed, and coached.
• Getting used to NULife’s operation system and workflow
• We moved from a paper based New Business process to an electronic based process.
• We established a single consistent approach to underwriting processes and establish a platform that will leverage underwriting process efficiency.
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NU LIFE Phase 1
• First steps in improving the application workflow and consistency in our Underwriting decision making steps.
• Contributing to our Must Wins:
• Communication consistency – we all talk the same language
• Improving our operational processes and streamlining how we accomplish tasks
• We have standardized how decisions are made and are creating a consistent decision making environment
DTEE
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NULIFE PHASE 1
• We did not anticipate the extent of the learning curve associated with front end scanning documents
• While we had identified the processes and trained staff and provided practice sessions some staff still struggled with the realization of ‘where’ and how documents flowed.
• Early break out or business process review sessions with staff helped
We had plans, we had newsletters, we even had wacky Wednesdays but there were still struggles in gaining a clear idea of what was being delivered, what the NU world would look like, how it would impact them and why it was significant to TLC.
Now time to do phase 2
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Milliken’s Law or The Law of Life Insurance
NULIFE Phase 2
Same Vision of STP at Transamerica We will use electronic processes to automate and streamline our business from acquisition through to in-force administration, supporting our market and increasing the ease of doing business, improving our profitability.
“Insanity is doing the same thing, the same way and expecting different results.”
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NU Life Phase 2
It will do the easy clean cases; thus freeing up the talented underwriters to
really solve problem cases.
Development of rule Vendor Integration Other efficiency
Teaching the young underwriter how to carry the load of underwriting
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Intent is Gain Momentum Consistently Deliver High Value Quick Wins Leverage our foundational work: Building rules Ingestion of data Integration of information further streamlining how our information flowing in from our external providers (Labs, Para’s etc) Working Together & Bringing Clarity to our processes and decisions further gathering data analysis and working with rule engine.
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Auto decision for clean cases: Created a “Proof of Concept” (POC) associated with rules for
“clean case underwriting” -We need to know that the rules engine is working as expected,
and is capable of making U/W decisions. -We need to ensure that we can move forward with more
complexity rules, and that we can visibly demonstrate our capability to deliver this.
Ingestion of data -Ingestion of vendor data (e.g., Lab test results, Parameds) and
further development of the both UW & business rules to support this.
• Minor cycle time benefits and productivity improvements are expected.
NU Life Phase 2: Approach
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• Extension of complex rule:
– The extension of the POC to include additional classes of data (e.g., Lab test results) and further development of the business rules to support this.
– The increased extension of the application data capture capabilities so that a percentage of incoming cases will be auto-decisioned / assisted-decisioned once they reach LifeSuite.
NU Life Phase 2: Approach
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• Ingestion of Data and on going…
– eApp – ingestion commences
– Underwriting support for inForce (Policy Change) ?
– Percentage of incoming cases that will be auto-decisioned /assisted-decisioned within LifeSuite
should increase overtime
NU Life Phase 2: Approach
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NU Life Phase 2 : Requirements
• Similar to phase 1 we need to review the following:
• Review and streamline the integration process and users
• Approval and review of automated underwriting rules
• Internal approvals and governance
• Communication (internal & external)
• Training of Head Office Business staff
• Change Management
• Process/Procedures Analysis and Documentation
• Updates to DRP/BIA plan
• Support of addition of new products eg Critical Illness program
• Our VISION of STP has just started !
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Jay Sankoff
Director, New Business and Underwriting Operations
RBC Insurance Company
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Distance
Underwriting
Infrastructure
Underwriting Resources
Underwriting Requirements
E-apps
Learnings
What is Next
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Infrastructure
• We were already in the process of examining our legacy underwriting and administration systems
• Recognized that one of the leading causes of ‘wastage’ was slow cycle times
• Always looking for ways to do ‘more work’ with ‘less’ staff
• The opportunities for ‘continuous improvement’ and ‘improved workflow’ in a paper environment were pretty much exhausted
• To be competitive we needed to get to the next level – ‘e-app’
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Infrastructure
- Closed our Burlington Living Benefits office in 2008
- Out of necessity introduced a strict ‘work from home’ program while still operating in a paper environment
- Competition for Life Underwriters
- Over 3 million pieces of paper
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Infrastructure
• Embarked on a 2.5 year project – Underwriting Imaging and Workbench
• Examined roles and responsibilities
• Examined workflows introducing LSS best practices of reducing waste (tasks)
• Looked for opportunities to introduce automation where possible
• Connectivity to the vendors and reinsures
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Resources
• The introduction of an Underwriting Workbench introduced great opportunities for the underwriters
• Not only for those working from home locally, but across Canada as well
• We were able to re-open and manage our Montreal underwriters more efficiently
• Began engaging contractors and full time staff from Vancouver to Gatineau
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Underwriting Requirements
• Stress ECGS - > ECGs
• Medicals - > Paramedicals
• ECGs
• MVRs
• Inspection Reports
But what of the relationship between APSes and Tele-interviews?
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Tele-interview
• Tele-interview allows you to remove non-medical questions from your application
• Allows for a shorter e-app
– Easier adjustment for the field
• Fewer errors on applications
– Second most common outstanding requirement?
• Better take up rate
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Learnings
• Customer Service Commitment
– 15
– 45
– 20
• Look to your partners to assist in moving the business
– Sales – they own the front end and the back end
– Vendors – what can they do for you
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Learnings
• Continuously build upon your successes and your failures
• Sky is the limit – don’t reject any idea
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What is Next?
• Always looking at our age and amount reqts, new products, new process opportunities
• Automate more – Review of the labs to the level of preferred
categories
– Automatically evaluate the preferred underwriting criteria
– Improve communications to the field
• Continue to engage our Sales, Product, Pricing and Reinsurance partners
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Sharon Smith Chief Underwriter Sun Life Financial
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New Business Transformation
• Multi year, multi phase, multi million dollar initiative
• Regionalized underwriting teams & large case team
• “In Box” for underwriters to sort their work
• Changes to Underwriting requirements
• Updated electronic application with drill down questions
• Integrated tele-interview offering
• Installation of new underwriting rules engine
• MIB all business
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How it all fits together
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Learnings
• It takes more than three months for three underwriters to build life and CI application and drill down questions
• Stay focused and not allow “scope creep” to derail the project
• Senior leadership active involvement is critical
• The transition to results may take longer than you’d like
• Data analytic support is an absolute must to maximize the power of the technology
• There will always be some resistance to change
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Where Next?
• Quarterly up-dates for the forseable future
– Look externally once we’ve maximized what we can do
• Ongoing review of underwriting guidelines
• Significant revisions to underwriting requirements – Focus on tools that can be received and reviewed
electronically
• Reap benefits of tele-interview recording
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Summary
• There are a number of components to the new business process, each of which needs to be examined
• Trends
– Electronic applications
– Image and underwriting workflow systems
– Underwriting rules engine
– Underwriting requirements reviewed more regularly
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