140408 LOMA Life Insurance Conference: STP More Than Just A Tweak To Your Operations

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Provides an overview of what may be achieved through the digitalization of new business processing and the implementation of straight-through processing including the digital delivery of life insurance policies.

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140408 LOMA Life Insurance Conference: STP More Than Just A Tweak To Your Operations

  1. 1. Presented by:Presented to: THE NOLAN COMPANY 3.2 Straight-Through Processing: More Than Just A Tweak To Your Operations People, Process, and Technology Steven M. Callahan, CMC, ChFC, CLU, FFSI, FLMI March 28, 2014 Insurance Practice Director 2014 LOMA Life Insurance Conference Stop Tweaking ! Start Recalibrating!
  2. 2. 2 LOMA Life Insurance Conference: April 7 - 9, 2014 3.2 Straight-Through Processing: More Than Just A Tweak To Your Operation Agenda • Introductions • Straight Through Processing Today and Into the Future • AXA Case Study • Questions Session Summary: • Overview and details of what may be achieved through the digitalization of new business processing and the implementation of straight-through processing including the digital delivery of life insurance policies. • Insight from an insurance company representative on their successful implementation of a digital solution.
  3. 3. 3 LOMA Life Insurance Conference: April 7 - 9, 2014 3.2 Straight-Through Processing: More Than Just A Tweak To Your Operation Introduction • Steven Callahan, CMC, ChFC, CLU, FFSI, FLHC, FLMI/M Ø The Nolan Company is a Management Consulting Company helping insurance companies with strategy, operations, and technology challenges for over 40 years. Ø I’ve been In insurance 30+ years, former Admin (NB, POS) and IT exec for AXP, GE, FFAL. Ø As Practice Director at The Nolan Company, split time between research, papers, and helping clients address service and operational issues. Ø Lately biggest client focus has been inflight system project problems and smoothly integrating technologies that have been rushed to delivery. • Let’s connect on LinkedIn – send invite to www.linkedin.com/in/stevencallahan Ø Follow my very rare tweets @stevenmcallahan Ø Traditional email: steve_callahan@renolan.com • Housekeeping Ø The entire presentation will be posted shortly after the conference. Ø The flow is informal, open to questions, meant to be relaxed and informative. Ø Please be sure to fill out the survey at the end – or when you leave if earlier
  4. 4. 4 LOMA Life Insurance Conference: April 7 - 9, 2014 3.2 Straight-Through Processing: More Than Just A Tweak To Your Operation Customer Diversity and Knowledge is Rapidly Growing Ethnic Diversity 2014 Social Networking Resources Courtesy of : wearesocial.ng slideshare.net Workforce Generational Diversity & Shift
  5. 5. 5 LOMA Life Insurance Conference: April 7 - 9, 2014 3.2 Straight-Through Processing: More Than Just A Tweak To Your Operation Web & Social Media Communications Methods have come a long way Simple: Complex: Phone Paper Service Delivery Resolution Phone Paper Service Delivery Process Resolution Phone Paper Email Text IVR Service Delivery Process Self-Service Resolution Chat Video Transfer Vendors Fax Fax
  6. 6. 6 LOMA Life Insurance Conference: April 7 - 9, 2014 3.2 Straight-Through Processing: More Than Just A Tweak To Your Operation Customer Service Old News: Future is Customer Engagement The “Big 3” measures of Customer Retention and EV? - Will they come back / stay - Will they recommend you (Net Promoter basis) - Do they feel the got value that exceeds price
  7. 7. 7 LOMA Life Insurance Conference: April 7 - 9, 2014 3.2 Straight-Through Processing: More Than Just A Tweak To Your Operation Customer Awareness and Empowerment is Significant Tens of thousands of positive service touchpoints a day, and yet one bad interaction… And suddenly your company is at the top of the tweets list telling thousands followed quickly by a Facebook “Unlike” Fan Page. Today’s Customer
  8. 8. 8 LOMA Life Insurance Conference: April 7 - 9, 2014 3.2 Straight-Through Processing: More Than Just A Tweak To Your Operation Technology’s Adoption and Utilization Growth Rate Exponential Every 60 seconds: Ø168M Emails Ø695k Searches Ø370k Skype Minutes Ø98k Tweets Ø13k iPhone apps ØThe current storage and processing capacity of the globally connected internet is currently roughly the equivalent of one human brain. ØUnlike the human brain, this synthetic global “brain” is doubling its capacity every 18 months; by 2040, it will exceed the processing power of all 7 Billion human brains in existence. ------ Kevin Kelly on “The Technium”
  9. 9. 9 LOMA Life Insurance Conference: April 7 - 9, 2014 3.2 Straight-Through Processing: More Than Just A Tweak To Your Operation Insurance has Growth Potential: Digital Companies have Advantage
  10. 10. 10 LOMA Life Insurance Conference: April 7 - 9, 2014 3.2 Straight-Through Processing: More Than Just A Tweak To Your Operation What Does This Have to do with Straight-Through Processing? 0 10 20 30 40 50 60 70 80 Millions GI Swing Boomer Gen X Millennials High TechLow Tech Increasing Customers Demands • Immediacy / 24x7 access • Transparency • Personal service relationships • Language • Driven within and outside the industry The Market is a Diversity of Communication & Technology Expectations Digitalization of Insurance = Competitive Differentiation = Market Share
  11. 11. 11 LOMA Life Insurance Conference: April 7 - 9, 2014 3.2 Straight-Through Processing: More Than Just A Tweak To Your Operation Customer Buying Patterns are Shifting: “Recalibration” is Key Copyright:
  12. 12. 12 LOMA Life Insurance Conference: April 7 - 9, 2014 3.2 Straight-Through Processing: More Than Just A Tweak To Your Operation STP Approval and Implementation Faces Challenges ü Streamline operations ü Customer centric processes ü Elimination of paper processes ü Automate process / Reduce errors ü Optimize process / Reduce costs ü Cost effective scalability ü Shift to near real time ü Expanded accessibility ü Multiple legacy systems ü Data security concerns ü Constant regulatory change ü Insufficient forms standards ü Still have manual steps ü Cycle time hard to reduce ü Inadequate ROI to do right Well Run Implementations are proving Hard to Get Approved
  13. 13. 13 LOMA Life Insurance Conference: April 7 - 9, 2014 3.2 Straight-Through Processing: More Than Just A Tweak To Your Operation Doing it Right Fix The Processes First: • Eliminate handoffs • Eliminate duplication of effort • Consolidate / simplify organization • Reengineer practices for desired target end state • Review STP parameters vs newly designed practices and processes; pick best • Develop a roadmap from current state to reengineered end state • Use Agile Sprints and Prototyping to implement in small steps • Make sure full integration with existing environment is part of Day 1 • Start with greatest pain point / highest impact – usually New Business or Claims • Leverage what you bought, comply with industry standards – customization risk
  14. 14. 14 LOMA Life Insurance Conference: April 7 - 9, 2014 3.2 Straight-Through Processing: More Than Just A Tweak To Your Operation Take Small but Complete Bites: Fully Integrated Steps
  15. 15. 15 LOMA Life Insurance Conference: April 7 - 9, 2014 3.2 Straight-Through Processing: More Than Just A Tweak To Your Operation The Problem Is Partial Implementation and Partial Integration LEGACY MOUNTAINS E-signature E-apps and State Forms Output System Predictive Risk Models Image & Workflow Medical Providers UW Review Admin System Sales Portals Client Portals Online Vaults CRM / Illustrations
  16. 16. 16 LOMA Life Insurance Conference: April 7 - 9, 2014 3.2 Straight-Through Processing: More Than Just A Tweak To Your Operation Elements of Straight-Through Processing for New Business Client Data CRM feed, Illustration link, Auto-fill / Reuse Signature Method, Confirmability, Lock Forms Channel, Product, State IGO Consistency, Completeness, Validity Identity, Licensing, Suitability UW Initial Review, Requirements, Approvability MIB & MVR, Financials, Script SECURITY / ENCRYPTION MULTI=PLATFORM COMPATABILITY APP CAPTURE E-SIGN PACKAGE REVIEW REQUIREMENTS ORDER DATA TRANSFER APP SERVICES and RULES SECURITY / ENCRYPTION REMOTE CONTROL & ACCESS HQ HQ
  17. 17. 17 LOMA Life Insurance Conference: April 7 - 9, 2014 3.2 Straight-Through Processing: More Than Just A Tweak To Your Operation WHAT MIGHT BE POSSIBLE” BEHAVIORAL DATA SOCIAL DATA LIFESTYLE INFO INSURANCE ADVISOR HQ UNDERWRITING INSURANCE BUYERS PRIMARY PHYSICIAN MEASUREMENTS COGNITIVE TESTS
  18. 18. 18 LOMA Life Insurance Conference: April 7 - 9, 2014 3.2 Straight-Through Processing: More Than Just A Tweak To Your Operation Straight-Through Processing is one Part of Future Business Model Copyright: STP
  19. 19. 19 LOMA Life Insurance Conference: April 7 - 9, 2014 3.2 Straight-Through Processing: More Than Just A Tweak To Your Operation Future Success Depends Upon Digitally Transforming The Business
  20. 20. 20 LOMA Life Insurance Conference: April 7 - 9, 2014 3.2 Straight-Through Processing: More Than Just A Tweak To Your Operation Shifting to a Customer-Centric Operation: Tailored & Transparent “Reinvent customer relationships” was the top priority for the next 3 years given by 42% of respondents in a recent IBM Global C-Suite Study.
  21. 21. 21 LOMA Life Insurance Conference: April 7 - 9, 2014 3.2 Straight-Through Processing: More Than Just A Tweak To Your Operation Characteristics of a Future Engaged Customer Relationship • Desire for personal interaction – web only buying grew 1% • “Digitally enabled personal service” is expected • Advice and recommendations remain important • Convenience and innovation are now expected, especially by younger buyers • Younger buyers will switch carriers faster to get what they want • Characteristics and psychographics of consumer segments are shifing fast • Fewer and fewer of the traditional loyal long term customers • Studies indicate the customer of the future is: • Less price sensitive at market level but attentive to company differences • Desirous of advice from friends, family, and company representatives • Oriented towards personal interaction during the shopping process • Expecting omni-channel engagement and service methods • Interested in new and innovative product solutions • Require simple convenience with personal and digital service options
  22. 22. 22 LOMA Life Insurance Conference: April 7 - 9, 2014 3.2 Straight-Through Processing: More Than Just A Tweak To Your Operation Digital Maturity based on Customer Awareness and Interaction Organization Centered Individual Centered Everyone to Everyone Connectivity Asymmetric Info asymmetry restricts coordination Flexible Automated value chain Orchestrated Collaborative and seamless Interactivity Incidental One-time transactions Integrated Links individual and organization, digital and physical Symbolic Mutual interdependence Awareness Segmented Individual unknown and assumed Tailored Individual is known and unique Contextual Experience is calibrated and relevant to immediate actions and needs Intelligence Transactional Passive learning through direct relationship Responsive Data-supported learning and decision-making Cognitive Self-supported learning and predictive capabilities Source: IBM Institute for Business Value Analysis
  23. 23. 23 LOMA Life Insurance Conference: April 7 - 9, 2014 3.2 Straight-Through Processing: More Than Just A Tweak To Your Operation Tips for Implementation Strategic Alignment Implementation Approach Ø Transformational Ø Customer centric focus – outside in Ø Phablet Point-of-Sale tools critical Ø Agile methodology with prototyping Ø Comprehensive approved business case Ø Disciplined change management Ø Dedicated Resources Ø Distribution champions program Ø Clearly defined integrated roadmap Ø Structured like a product launch Additional Digital Opportunities – and Challenges - are Fast Approaching: • Digitalized Underwriting Information • Formalized Social Networking Data Integration • Centrally available Behavioral Data Warehousing (lifestyle, shopping, travel) • Digital Medical Records (EHR) • Wearable Device Information Access (from Fitbits to Pacers)
  24. 24. 24 LOMA Life Insurance Conference: April 7 - 9, 2014 3.2 Straight-Through Processing: More Than Just A Tweak To Your Operation Looking Ahead: Data, Data, and More Data Copyright © Massachusetts Institute of Technology 2011. All Rights Reserved. Online Personal Health Records.
  25. 25. 25 LOMA Life Insurance Conference: April 7 - 9, 2014 3.2 Straight-Through Processing: More Than Just A Tweak To Your Operation Maybe Even Too Much Data……. Toto's new Intelligence Toilet II monitors weight, blood sugar levels, and other vital signs, transferring data to your computer for analysis via WiFi.
  26. 26. 26 LOMA Life Insurance Conference: April 7 - 9, 2014 3.2 Straight-Through Processing: More Than Just A Tweak To Your Operation Health Management is the Next Life Risk Management Opportunity
  27. 27. 27 LOMA Life Insurance Conference: April 7 - 9, 2014 3.2 Straight-Through Processing: More Than Just A Tweak To Your Operation Remember: Integrated Steps Is Key to Least Cost Success E-signature E-apps and State Forms CRM / Illustrations Output SystemPredictive Risk Models Image & Workflow Medical Providers UW Review Admin System Sales Portals Client Portals Online Vaults
  28. 28. Steven M Callahan, CMC®, FFSI Insurance Practice Director Steve_Callahan@renolan.com 206-619-7740 www.linkedin.com/in/stevencallahan @stevenmcallahan www.renolan.com

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