Soa annual meeting emerging technologies and the future of insurance distribution
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20/10/2011 1 Presenter: Kevin Pledge, FSA, FIA EMERGING TECHNOLOGIES AND THE FUTURE OF INSURANCE DISTRIBUTION SESSION 90 OCTOBER 18, 2011 Primary Competency: Strategic Insight & Integration 2 EMERGING TECHNOLOGIES AND THE FUTURE OF INSURANCE DISTRIBUTION
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Transcript of Soa annual meeting emerging technologies and the future of insurance distribution
20/10/2011
1
Presenter:
Kevin Pledge, FSA, FIA
EMERGING TECHNOLOGIES AND THE
FUTURE OF INSURANCE
DISTRIBUTION SESSION 90
OCTOBER 18, 2011
Primary Competency: Strategic Insight & Integration
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EMERGING TECHNOLOGIES AND THE
FUTURE OF INSURANCE DISTRIBUTION
20/10/2011
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“the future is already here – it’s just not very
evenly distributed”
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EMERGING TECHNOLOGIES AND THE
FUTURE OF INSURANCE DISTRIBUTION
North America
currently haveautomated UW
considering automatedUW
not considering
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EMERGING TECHNOLOGIES AND THE
FUTURE OF INSURANCE DISTRIBUTION
Source: 2011 Underwriting Survey - Hank George Inc., Select X Ltd.
20/10/2011
3
Elsewhere
currently haveautomated UW
considering automatedUW
not considering
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EMERGING TECHNOLOGIES AND THE
FUTURE OF INSURANCE DISTRIBUTION
Source: 2011 Underwriting Survey - Hank George Inc., Select X Ltd.
different products
regulations
market pressures
technical barriers
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EMERGING TECHNOLOGIES AND THE
FUTURE OF INSURANCE DISTRIBUTION
20/10/2011
4
7
0
20
40
60
80
100
Elsewhere
NorthAmerica
NA notconsidering
EMERGING TECHNOLOGIES AND THE
FUTURE OF INSURANCE DISTRIBUTION
Key Drivers for Automated Underwriting
• Management of Risk
• Minimising Underwriting Costs
• Improving the Customer Experience
• Maximising Business Opportunities &
Conversion Rates
• Enhanced Management Information
EMERGING TECHNOLOGIES AND THE
FUTURE OF INSURANCE DISTRIBUTION
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47 days
9
Source: 2009 LOMA Service Turnaround Times Survey – Term Products
EMERGING TECHNOLOGIES AND THE
FUTURE OF INSURANCE DISTRIBUTION
obvious statement:
slow decision = attrition
by how much?
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EMERGING TECHNOLOGIES AND THE
FUTURE OF INSURANCE DISTRIBUTION
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6
0
20
40
60
80
100
Immediate Delay
percent who said they would return
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0
20
40
60
80
100
Immediate Delay
percent who actually did return
EMERGING TECHNOLOGIES AND THE
FUTURE OF INSURANCE DISTRIBUTION
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0 100 200 300 400
Traditional
Auto
EMERGING TECHNOLOGIES AND THE
FUTURE OF INSURANCE DISTRIBUTION
significant
cost savings
(on significant
portion of the
business)
20/10/2011
7
0
20
40
60
80
100
Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6
Immediate Acceptance Rates
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EMERGING TECHNOLOGIES AND THE
FUTURE OF INSURANCE DISTRIBUTION
’
30% 4%
POS
Initial Underwriting
Reflexive Underwriting
20%
Rated
Acceptance
NB
72% 42% 8%
Original
Acceptance Declined NPWs
0% 0%
6% 15%
68% 18% 4% 10% Total =
Refer to
Underwriter
Tele-UW
8%
22%
11%
20% 6% 10% 4%
0% 0% 0%
Evidence
15%
Carry Forward
9%
EMERGING TECHNOLOGIES AND THE
FUTURE OF INSURANCE DISTRIBUTION
Tele-UW
Medical
Evidence
Manual
Decision
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change of emphasis
tactical strategic
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EMERGING TECHNOLOGIES AND THE
FUTURE OF INSURANCE DISTRIBUTION
New ways to interact
New information in risk assessment
x-sell, up-sell
Underwriting speed
Ease of case submission
Sales support
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EMERGING TECHNOLOGIES AND THE
FUTURE OF INSURANCE DISTRIBUTION
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UW control
has shifted
to the
business
user
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EMERGING TECHNOLOGIES AND THE
FUTURE OF INSURANCE DISTRIBUTION
by configuration not customization
control of
process
has shifted
to the
customer
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EMERGING TECHNOLOGIES AND THE
FUTURE OF INSURANCE DISTRIBUTION
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10
predictions
for discussion
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EMERGING TECHNOLOGIES AND THE
FUTURE OF INSURANCE DISTRIBUTION
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EMERGING TECHNOLOGIES AND THE
FUTURE OF INSURANCE DISTRIBUTION
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Michel de Nostradame
1503 - 1566
King Henry II of France
1519 - 1559
EMERGING TECHNOLOGIES AND THE
FUTURE OF INSURANCE DISTRIBUTION
predictions– data….
• more sophisticated data analysis
• greater connectivity to external data
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EMERGING TECHNOLOGIES AND THE
FUTURE OF INSURANCE DISTRIBUTION
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12
predictions– distribution…
• greater control given to the distributor
• more underwriting knowledge at point of
sale
• distributor presenting underwritten
cases to insurance co.s
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EMERGING TECHNOLOGIES AND THE
FUTURE OF INSURANCE DISTRIBUTION
• Kevin is CEO and Co-Founder of Insight Decision Solutions.
• Kevin has written several articles and is co-author of “The Analysis of
Insurance Earnings” (2008).
• He has served on three SOA section councils and Microsoft’s Partner
Advisory Council for 5 years.
• Kevin qualified as a Fellow of the Institute of Actuaries (UK) in 1992
and a Fellow of the Society of Actuaries (US) in 2004.
905 475 3282 x 224
@kevinpledge
http://ca.linkedin.com/in/kevinpledge
KEVIN PLEDGE
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