ALLFINANZ Case Study - PruProtect (UK)

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VitalityLife (formerly PruProtect) gains early foothold and profits through fast applications and ‘invisible’ underwriting

"Munich Re’s ALLFINANZ automated underwriting solution undoubtedly has the superior user interface for designing, publishing, updating and creating applications and underwriting rules“ says Andrew Smith, Automated Underwriting Manager at VitalityLife.

The Company

VitalityLife (formerly PruProtect) is a U.K. life and health insurer founded in 2007. It has already achieved 12 percent market share and fourth largest sales among adviser-based insurance products. It is now fully owned by Discovery, an innovative South African insurer.

Its primary products are life, whole of life, serious illness, income protection, family income benefit, disability, and premium waivers. Sales and service arms include VitalityLife staff, more than 9,000 independent financial advisers (IFAs), company partnerships and selected banks. All connect remotely for quotes and policy requests. A new iPad app facilitates service and sales. Advisers employ VitalityLife’s professionally designed email templates for customer marketing and contact.

Other marketing strategies include allying highly popular sports personalities as Vitality Ambassadors to promote healthy lifestyles. Vitality is the world’s largest incentivebased wellness programme, used by more than five million people and acknowledged as a global health incentiviser. June 2013 saw a cycling competition amongst VitalityLife advisers.

Business challenges

From VitalityLife’s earliest days,automating applications, data gathering and underwriting was a baseline requirement. No other method would enable fast impingement into the U.K.’s competitive insurance marketplace.
 
VitalityLife’s Automated Underwriting Manager Andrew Smith says, “Automation was a ‘must have’ due to its prevalence in this market. It was inconceivable a new entrant would employ slow, mail- and email-based back-and-forth underwriting. We discarded the idea of programming our own rules engine, then evaluated the market for available software. We knew that only a purpose-built system should handle our new business.”

The solution

“Munich Re’s ALLFINANZ automated underwriting solution undoubtedly has the superior user interface for designing, publishing, updating and creating applications and underwriting rules.”

“Its capability for business users to control rule changes and perform their own analysis without outside assistance is highly attractive. We rejected other solutions that would have increased IT’s interdepartmental traffic for such requests. That wouldn’t work in this fast-paced environment.

“We acquired and installed—with the practiced help of Munich Re staff—the ALLFINANZ Interview Server, ALLFINANZ Rules Designer, and ALLFINANZ Business Analytics.” Implementation required a satisfactory six months.

Benefits in hand

Given VitalityLife’s advantageous products, its effective marketing and sales campaigns, and Munich Re’s electronic application and automated underwriting, it’s difficult to accurately parcel out credit for VitalityLife having rapidly captured 12 percent of IFA market share.

“It’s well known,” says Smith, “that the industry sometimes perceives underwriting as a hindrance to sales. Yet underwriting is a requisite foundation of sound insurance practice. So our job is to keep the disciplines of underwriting completely intact yet make them as invisible as possible to the customer.

“To that end, Munich Re’s ALLFINANZ software has facilitated smoother underwriting, which improved overall service, which absolutely sped growth several ways.”

Smith enumerates the many cause-and-effect benefits VitalityLife has earned from using ALLFINANZ:

“Smart interview questions and rules send fewer referrals up to human underwriting. That pushed straight-through processing to more than 60 percent and growing. So underwriting costs have dropped as a percentage of new business.

“Binding a new customer in minutes or hours—versus weeks by old means—improves word-of-mouth advertising and reduces dropouts during application.

“Our underwriting has become more consistent because we ask the same questions and get the same decisions for high-frequency disclosures. Together, these factors combine to help us deliver excellent value to families at competitive prices.

“We were pleased to notice our medical evidence costs have dropped. Fewer tele-interviews are required because the ALLFINANZ Interview Server covers the necessary points with interactive questions.

“Another direct saving is that we kept pace with our growing sales volume without hiring substantially more underwriters. Additionally, underwriters are bright people who prefer focusing on complex cases over the repetitive questions that we can demote to automation. Now junior underwriters learn faster because they see complex cases earlier.”

Smith concludes, “As we more fully exploit ALLFINANZ Business Analytics software this year, we’ll gain even more insight. We can fine-tune certain areas for faster service, improved risk management and better impingement into various market niches.”


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