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Increasing Productivity in Insurance Operations with Digital Decisioning

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Hear insurance industry expert Craig Bedell and Decision Management expert James Taylor discuss the importance of digital decisioning to improving insurance productivity.
See slides with audio here: https://youtu.be/YgCOkc23s8k

Published in: Data & Analytics
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Increasing Productivity in Insurance Operations with Digital Decisioning

  1. 1. © 2019 Decision Management Solutions James Taylor and Craig Bedell Increasing Productivity in Insurance Operations with Digital Decisioning
  2. 2. © 2019 Decision Management Solutions 6 Your Goals  Learn how to improve insurance productivity  See how digital decisioning will help your organization
  3. 3. © 2019 Decision Management Solutions 7 Our Goals In This webinar  Help you understand why insurance productivity is not rising  Convince you that a ‘focus on basics’ offers benefits across the entire organization  Introduce the idea of digital decisioning  Show you how digital decisioning drives insurance productivity James Taylor Craig Bedell
  4. 4. 8 AGENDA © 2019 Decision Management Solutions Underwriting and Pricing Productivity Claims Productivity Distribution Management Productivity Defining Digital Decisioning Getting Started Q&A
  5. 5. © 2019 Decision Management Solutions 9 “Most carriers are struggling to meet their cost of capital, and productivity has barely moved over the past decade.” “Unlike other industries, which have been able to capitalize on their investments in digital technologies, insurance hasn’t increased its overall productivity in the past ten years.” The Productivity Imperative In Insurance
  6. 6. © 2019 Decision Management Solutions 10 Quick Payoff for listening When you’re an insurance company Productivity depends on decision- making Digital investments don’t improve productivity unless you fix decisions first
  7. 7. 11© 2019 Decision Management Solutions Underwriting and Pricing Productivity
  8. 8. © 2019 Decision Management Solutions 12 Underwriting and Pricing Productivity Prompt response to qualified submissions Hit rate for quoted business Retention rate on desirable renewals Consistency and adherence
  9. 9. © 2019 Decision Management Solutions 13 Digital Decisioning in Underwriting  Business problem  Avoid adverse selection and deliver straight through processing in specialty auto  Results  75% Straight Through Processing  20% Increase in agents quoting  50% Increase in written premium  Solution  Predictive analytic model to target pricing based on risk  Business rules to enforce policies and regulations  Every quote saved for analysis and continuous improvement
  10. 10. © 2019 Decision Management Solutions 14 Ineffective Investments in Underwriting  Set a clear appetite guide  Risk score applications  Develop surrogate risk insights  Develop special coverage programs  Conduct portfolio risk analyses and reinsurance strategy review  But don’t define how to consistently apply it  But don’t integrate the score into underwriting and rating  But use cumbersome legacy decision-making  But don’t define new risk selection approach  But don’t tie to individual case decisions
  11. 11. 15© 2019 Decision Management Solutions Claims Productivity
  12. 12. © 2019 Decision Management Solutions 16 Claims Productivity Reserving at FNOL Customer Satisfaction Scores Litigation rates Time to Settlement Follow-up Activities
  13. 13. © 2019 Decision Management Solutions 17 Digital Decisioning in Medical Claims  Business Problem  Deliver 20%+ STP of medical claims across chatbot, mobile, online, direct from hospital  Results  50% Straight Through Processing  Weekly updates  Business User Control  Solution  Manage risk with cautious as-is rollout  Business-led continuous improvement  Simulation and impact analysis  8% STP on day 1, 28% on day 100, 50% on day 250 0% 10% 20% 30% 40% 50% 0 50 100 150 200 250 Days STP Rate
  14. 14. © 2019 Decision Management Solutions 18 Ineffective Investments in Claims  Digitize claims data  Digitize 100% of the claims process  Do analytics to report on wastage and fraud  Invest in fraud case management and investigation  But just replace a manila folder with a digital one  But still review each claim by hand  But don’t change how claims are approved  But engage in fruitless “pay and chase” fraud detection
  15. 15. 19© 2019 Decision Management Solutions Distribution Management Productivity
  16. 16. © 2019 Decision Management Solutions 20 Distribution Productivity Quality scores on risk submitted Submitted/ Quoted rates Quotes Taken or Bind rates Producer Productivity Up-Sell and Cross-Sell
  17. 17. © 2019 Decision Management Solutions 21 Digital Decisioning in Distribution Up-Sell and Cross-Sell in agent POS  Business problem  How to increase the Annual Premium Equivalent (APE) of sales made by agents using mobile app to work with new clients  Results  $6,000,000 in APE uplift  >98% Agent adoption  14-24%+ Acceptance  Solution  Decision service used financial data captured from client and proposed purchase to suggest intelligent up-sell or cross-sell  Seamless integration into sales conversation  Also integrated into customer portal “It’s like finding dollar bills lying in the street. The ROI is enormous and the effort tiny.”—CFO
  18. 18. © 2019 Decision Management Solutions 22 How To Spend Money on Distribution Without A Return  Agent and Agency Management mobile apps  Digital lead generation for agency force  Pre-approval guaranteed issuance  Research risk trends, exposure analyses and lifestyle insights  But just provide passive data review not active suggestions  But route and manage leads ineffectively  But blanket offers not customer- focused first best offer  But don’t integrate cross-sell and up-sell into agent selling process
  19. 19. 23© 2019 Decision Management Solutions Digital Decisioning
  20. 20. © 2019 Decision Management Solutions 24 Digital Decisioning  Digital decisioning  capitalizes on analytical insights about customers and business operations  to automate actions for individual customers through the right channels  It:  Automates operational decisions that lead to actions  Operates in real time and at scale  Seeks completely automated decisions and actions  Continually improves through feedback loops  Runs on platforms that integrate analytics, rules, and process
  21. 21. © 2019 Decision Management Solutions 25 Decision Management: Three steps to digital decisioning DecisionsFirst™ Design Thinking Mix and Match Technology Continuous Improvement Think about decision design first to build a decision model and drive practical innovation Business rules, analytics, machine learning and AI under a decision umbrella, deployed as a decision service Analyze decision-making to drive business learning and focus on gradual improvement
  22. 22. 26© 2019 Decision Management Solutions Getting Started
  23. 23. © 2019 Decision Management Solutions 27 Get Everyone On The Bus  Business  IT  Operations  Analytics
  24. 24. © 2019 Decision Management Solutions 28 There’s Something For Everyone Business Owner Control Analytic Insights in Production Operational Transparency Clean Integration with Legacy Systems Continuous Improvement
  25. 25. © 2019 Decision Management Solutions 29 Improving Productivity In Insurance  Improving Productivity Means Improving Decision-Making  Digital Business Means Digital Decisioning  Digital Decisioning  Increases the speed of decision-making  Lowers the cost of decision-making  Increases the accuracy of decision-making  Improves the consistency of decision-making  Delivers agility in decision-making
  26. 26. 30© 2019 Decision Management Solutions Your Questions Enter questions for the Q&A here James Taylor, CEO james@decisionmanagementsolutions.com Craig Bedell cbedell90@hotmail.com
  27. 27. © 2019 Decision Management Solutions 31 Thank You  More resources for boosting insurance productivity on our website  bit.ly/DecisionInnovationIns  Decision Management Solutions works with clients to improve their business by applying business rules and analytic technology to automate and improve decisions.  We can help you improve your productivity with our DecisionsFirst approach.
  28. 28. Thank You For more on Decision Management, go to: decisionmanagementsolutions.com © 2019 Decision Management Solutions

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