INSURANCE VALUE CHAIN
1. Insurance operations can be broadly divided into three core elements.
2. They are Front office, Policy Administration & Underwriting, and Claims Processing & Payout
KEY IDEAS
1. Ideas towards driving changes in policy administration and underwriting function are:
2. Switching of business process outsourcing (BPO) for closed-book operations.
3. Enhanced use of business intelligence (BI) and analytics for underwriting.
4. Increasing adoption of self-service for policy servicing.
BUSINESS PROCESS OUTSOURCING
1. Life insurers and pension providers shift a block of policies which are no longer being sold (Closed-book) to a third-party provider.
2. These policies are nonrevenue generating but still prone to claims and servicing expenses maintained in the main systems which results in costly operations and data maintenance.
3. Outsourcing these policies reduces any policy conversions which are expensive or risky.
4. BPO firms must demonstrate strong IT skills, domain competency, and operational expertise to support closed-book processing, as well as to support data conversion and required system maintenance and upgrades.
5. Data outsourcing involve issues like depersonalizing the data and having adequate measures to handle the privacy of policy holder information for data protection.
BUSINESS INTELLIGENCE (BI)
1.Better insights and analytics for in-depth assessment of customer behavior, better risk management, improved underwriting accuracy, and fraud detection can help improve profitability.
2. Product Profitability improved based on drill-down information such as customer segmentation, life stage analysis and profitability metrics.
3. Would be ideal to have aggregated and cleansed data to analyze and respond to new
business needs in real time or near real time.
