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Integrating Underwriting with Technology for Industry GrowthIntegrating Underwriting with

Technology for Industry Growth

Presented by Maria Thomson, FSASVP of Sales for YNEV

www.synev.com

For

AHOU

On May 1, 2012

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Factors Driving Industry to E-Underwriting and STP

High acquisition costs, thus

Move to higher premium sales, thus

Concentration in affluent market, thus

Fierce competition & low margins

Consequence – Life Industry Shrinkage Since 1980

Continuing decline in life insurance ownership

Continuing decline in # of life insurers Continuing decline in life industry

employment

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Requires Simplifying and speeding the complete

sales process for agents Reducing acquisition costs

Automation of sales process, e-underwriting and STP all help achieve this

Resurgence Requires Ability to Sell Profitably in Mid-market

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And, Automation Provides Advantages in Affluent Markets

More efficient underwriting – cheaper and faster

Useful tools for agents Better data for tweaking rules Monks’ presentation provides more

details

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Nonmed Rapid New Business Process – Sales Elements

Gather basic customer data

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Nonmed Rapid New Business Process – Sales Elements (cont.)

Needs analysis to recommend face, products, features

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Nonmed Rapid New Business Process – Sales Elements (cont.)

Drill-down app (PHI), with e-data (MIB, Rx, MVR, Fraud check) gathered in background

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Nonmed Rapid New Business Process – U/W Elements 'IRMA‘* either makes the underwriting

decision or refers to human underwriters

The underwriter may set up a chat with the agent or have a phone conversation

The decision would generally be made on-the-spot

*IRMA is Synev’s e-underwriting software, & is being used in this presentation as a proxy for any such system.

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Nonmed Rapid New Business Process – U/W Elements (cont.)

Example of report underwriter might review to aid with risk assessment (next slide)

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Nonmed Rapid New Business Process – Policy Fulfillment

Agent processes credit card or eft payment through the system

An e-version of a completed app and policy with personalized schedule pages is produced

Medical Rapid New Business Process – Sales Elements

Sales elements are essentially the same as with a nonmed process.

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Medical Rapid New Business Process – U/W Elements

For apps not requiring APSs or fluids, 'IRMA' may be permitted to make the decision in some cases

If additional requirements are needed, 'IRMA' can place order with vendors

If policy can’t be issued, agent binds case and data is transmitted to underwriting

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Medical Rapid New Business Process – U/W Elements (cont.)

App data arrives in XML format 'IRMA' can generate reminders if

requirements are late, and can flag underwriter when all requirements have arrived

Underwriting report is generated, as shown in slide 13

Agent can access system for status

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Medical Rapid New Business Process – Policy Fulfillment

Once underwriting makes decision and authorizes issuance, 'IRMA' generates e-documents for agent

Two-part survey conducted by Society of Actuaries to determine utilization and benefits of automated underwriting systems

Results of SOA Automated Underwriting Surveys

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Study: Definition of e-Underwriting System

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A technology solution which is designed to perform all or some of the screening functions traditionally completed by underwriters, and thus seeks to reduce the manpower, time, and/or data necessary to underwrite a life insurance application

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Study: Three Basic Ways Systems are Used

Alert to risk factors – speeds underwriter’s analysis

Automation of SI/Nonmed underwriting - can make decision in a number of cases

Automation of medical underwriting

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Study: Amount of Independence Granted to the Machine

41% of decisions made by 'IRMA'

15% of cases 'IRMA' recommends a decision

Remaining 44% - 'IRMA' just identifies risk factors

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Study: Satisfaction with Cost Savings

50% satisfied when 'IRMA' just flags risk factors

83% satisfied when SI/Nonmed underwriting is automated

No one is satisfied with cost savings from automating medical underwriting

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Study: Unexpected Challenges

Generally, implementation and maintenance more work than expected

Coding rules to replicate medical underwriting is very difficult

Some frustrated with always having to work through vendor to make changes

Inexperienced underwriters can lose effective training ground

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Study: Unexpected Benefits

Systems provides lots of good data for analysis

Work diversity between working with system vs. traditional underwriting

Capture of all app & underwriting data in machine readable format improves the process of underwriting reviews or audits

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Industry Recovery Means More Underwriting Jobs

But - changes in where jobs come from and nature of the work For those in affluent markets, work will fundamentally be the same, but new data sources and new tech will be in play Jobs for junior personnel now available at APS summary service vendors and agencies For SI and nomed business, underwriters will be making their evaluations on-the-fly at time of sale – if 'IRMA' isn’t making all the decisions

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Other Types of Underwriting Work

Creating and modifying rules for 'IRMA' Track developments in medicine and

underwriting Evaluate new data sources Analyze company experience

Group and individual health insurance Risk evaluation, plan design, claims

review and wellness programs

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Conclusion

All of us here will ultimately benefit from the growth in individually underwritten life and health products, which is contingent upon more rapid and cost efficient business placement. In particular, e-underwriting and STP will open up the mid-market when coupled with appropriate distribution channels and products.

Specialize in new business automation and SharePoint technology. Distinguished by no license fees and rapid customization.ServicesAutomated underwritingAgency automationAPS summariesSharePoint/InfoPath development

Collaborating with Canada Life Re to provide full range of services to carriers seeking more rapid growth This presentation contains screen prints from prototype e-forms created by SYNEV for Canada Life

About ynev Tech Services

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What’s Special About SharePoint?

It’s a Microsoft corporate technology which integrates with Office – and your company is already licensed!

Very powerful – easy to configure for a multiplicity of needs

Allows SYNEV to rapidly and inexpensively tailor new business & underwriting tools to your particular needs