Effective Management of Life and Health Underwriting Department

Dr Ly Samnang, Sopheap Heng5 October 2015

Content of presentation

How to effectively manage the underwriting function, to institutionalize efficient processes, to render reliable and excellent services, to keep costs low, and to realize profitability. Underwriting KPIs and service turnaround times. Compliance, including data protection and privacy laws, anti-money laundering regulations. Human Capital Development including a structured professional training and development program for underwriters.

Quiz and Q&A

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A useful thinking framework: 3E, 3Ms,Opex

Economy: the minimal amount of resources to achieve something

Efficiency: input and output relationship

Effectiveness: actual vs. expected outcomes

Manpower: headcount; people (suitable and well trained)

Machines: creative use of equipment and tools, including IT hardware and software, and other systems

Money: judicious spending of money and investment for the future; keep costs to the minimal while investing in the right things.

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Opex = operational excellence: How can be do faster, more and better, with less of resources, waiting times, chances of errors, wastages, movements of people and files, number of steps and subprocesses, manual work, unnecessary communication processes, …?

Taking hint from Lao Zi’s 无为而治

(Wu Wei Er Zhi)

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A useful thinking framework: 3E, 3Ms,Opex (Cont’)

Set high, specific and reliable service standards

Set very high performance standards for each key service touch points.

Ex: KPI & TAT

Define and measure these performance closely.

Ex: Pender Index

Recognize and reward those who do try and consistently deliver them.

Reliability of service is important to inspire trust and confidence.

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NBUW Summary Process

LIS/LIC send Application by upload/Hard copy to Submission team

UW to give decision, NBC to issue & send ME/IS/CAL or other Letters to LIS/LIC & Panel doctor

NB-Proposal Pending&Cashier, Check completeness, apply cash, classified case then pass to UW, to give decision

Customer to go for ME and Panel doctor to send MR to NBUW

NBC-update in LAS

T+3hoursReceive SMS within

3 hours

NBI-Issue and prepare Policy Kit and deliver to LIS/LIC

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7 6 5

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T+3+12+51+22+3+2=26days21hrsSMS to inform about issuance

T+3+12+51hoursME/IS/CAL/Issued:

SMS & email within 2 working days

T+3+12+51+22* daysT+3+12+51+22+3 working hrs

NB-Submission, Download application, Create Client Code and Key-in data to LAS

T+3+12hoursIA: SMS & email

within 12 working hrs

(*) If customer completes ME only in 1 day, then maximum non-jet case TAT = 7 days only.Maximum jet case TAT = 5 days.

Pender Index

Pender Index=

End of Month Pending

Average case moving per working day

PI ≤ 6

Creative use of technologies, process design and deployment of resources

Pool the brainpowers and creativity of our people

Process improvement, improvement and re-engineering;

Creative use of technology and other tools e.g. Excel spreadsheet. Keep costs low and improve efficiency through automated sms, emails and reports as well.

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Compliance

AML

Data privacy and protection

Info security risk management

Fatca: the 6 indicia incl. US Green Card holder. Thinking ahead, we will soon incorporate GATCA requirements such as tax residence status.

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Think like a businessman: Only if it makes money

Income:

• Make it as easy and as fast as possible for business (premiums) to come in.

• But charge an adequate and fair premium (not overcharge, nor undercharge).

Outgo: control costs while keep the claim experience within pricing assumptions. - Underwriting is very important: If insurers do not select, they will be selected against!

• The most important and costly resources is the time of our people. So, we must make good use of their times.

• Minimize times on manual work, and invest more time in people-to-people relationships and those which need human judgment.

Investment: In our resources wisely

• - E.g. PCLA training and development program such as the sponsoring of the Academy of Life Underwriting Program, and overseas underwriting seminars/workshops.

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Underwriting control measures or activities

Underwriting authority limits are set primarily based on technical underwriting knowledge, relevant experience, risk retention, and workload demand.

Referral procedure is based on aggregate sum at risk (in PCLA, we call it underwriting amount basis)

Adhere strictly to the reinsurer underwriting manual, and internal guidelines.

Random checks: medical exam, as well as query based on information disclosed in the insurance proposal. More at the Province (as more of them are less likely and/or less frequent to undergo routine medical exam).

Underwriting evidence limits: set based on predictive value considerations, in the light of local context. We would rather be more stringent at underwriting stage, than at claim stage.

Underwriting audit: internal by Chief Underwriter, auditors, and reinsurer.

Expense control: periodic review of actual vs. budget, by Finance and Underwriting Department.

Claim experience monitoring: A/E ratio, by Actuarial.

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Good communication with all stakeholders is key

• Management of clear expectations for all stakeholders concerned.

• Panel doctors

• Sale teams

• Customers

• Clear understanding of the procedure, requirements, processes, expected TATs,

• Endeavour to meet promised service standards.

• Do not loosely grant exceptions or exemptions.

• Consistent reporting requirements and service level standards.

• Gathering feedback to continually improve services and the 3 Es and achieve Opex

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Maintaining good relationships…

The need to maintain good relationships with various stakeholders:•Physician-patient relationship;

•Acting as an agent for the insurance company;

•Be fair to the examinee, as well as to other customers of the insurer (premium rate proportionate

to risk);

•The insurance intermediary;

•The claimant (for claim case);

•The different needs of the sick (patients) and the insurance examinees. Priority should be given

to sick patients. However, the hospital should not let the examinees for insurance purpose wait

for too long. Proper scheduling of appointments and resource planning are key.

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The approach: professionalism

Adhere to professional medical code of conduct, always act in a professional manner, and

with the highest standards of integrity and honesty.

- Without any fear or favour.

Abide by the terms and conditions of the SLA agreed with the insurer, such as the writing of

clear and comprehensive report, and its prompt submission to the insurer.

Safeguard the confidentiality of personal information, and take the necessary measures to

prevent possible leakage of such information.

Good customer service attitude.

Being humble enough to admit if s/he does not know what s/he does not know or uncertain of.

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Medical tips prior to a medical exam:

These tips could better prepare the examinee psychologically as to what to expect, the do’s

and don’ts before going for the medical.

– These include fasting requirements, making an appointment with the medical center and

be punctual, as well as a map showing the location of the examination center, etc.

To help ensure accurate results are obtained, and the examinee could be given fair premium

rates, and could avoid unnecessary repeat of tests.

Ways the medical profession could be of help

Good services and reasonable fees!

Information for mortality/morbidity studies, rating, risk selection, etc.

Talks and articles on healthcare, medical risk assessment and related topics.

Educate the public on healthy lifestyle and living.

A solid partner with all stakeholders of this beautiful industry.

Let’s work together for the good of the insurance industry in the Kingdom!

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Full compliance with all laws and regulations

Must fully comply with the relevant laws and regulations.

Among them is the need to always safeguard the confidentiality of information of the

customers.

– Insurer may communicate with hospitals via e-mails to hasten turnaround times, provided

there is relevant safeguard in place against information risk, such as report with confidential

content must be password-protected.

Corporate social responsibility

Many customers first got to know that they have diabetes, hypertension, being hepatitis virus carriers and

other conditions, through an insurance medical examination. They are very grateful that they discovered it

earlier, rather than later.

We call up our customers to explain to them why we are unable to offer standard terms. We sincerely hope

our customers could take better care of themselves, and they go and seek medical advice or treatment, as

appropriate.

We hope to offer some coverage as far as possible, even if a case may not be ‘standard’. An impaired life

needs as much insurance protection as a healthy one.

We all must contribute our part to inspire trust and confidence in the insurance industry. Mistrust is the

biggest barrier to the purchase of insurance everywhere.

E.g.: What should we do if a case is tested positive for HIV antibody?

All cases must be handled with care and sensitivity.

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Outsourcing and in-sourcing

If more cost effective to do so, e.g. policy kit delivery

Certain aspects IT security

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Teamwork

TEAM = Together Everyone Achieves More!

T = Together

E = Everyone

A = Achieves

M = More

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Good planning

Resource planning: lead times to recruit, train; people to take various kinds of leave, having regard to peak hours of the day, and high workload at the end of the month.

Budgeting

Time to have rest and fun!

Maternal leave, and weekend no-disturbing staff policy.

Fair dealing with staff: OT and time-off

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Faster an excellent service culture

Getting enough people with the right service attitude

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