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Health Risks

The fast track to new business

A point-of-sale solution implemented by Munich Re together with an Asian life insurer highlights the advantages of automated underwriting. The key ingredients in this recipe for success were tried and tested software components, a great deal of experience and in-depth consulting.

07.02.2012

A point-of-sale solution implemented by Munich Re together with an Asian life insurer highlights the advantages of automated underwriting. The key ingredients in this recipe for success were  tried and tested software components, a great deal of experience and in-depth consulting. © Corbis
The global life insurance market has seen vigorous growth over the past several years, among other things as a result of demographic change in the industrialised countries and strong demand in emerging markets. Despite this, the market is fiercely competitive. Insurers go to great lengths to woo clients, whose expectations are very high regarding service, accessibility and processing swiftness. More and more companies are therefore backing a concept that revolutionises the sales process, enhances the attractiveness of existing products, and paves the way for new covers: automated underwriting. In Australia and the UK, automation has already eclipsed paper-based underwriting. Here, service propositions focusing on speed of issue, optimal process efficiency and cost-effectiveness have convinced insurers, distributors and customers alike.

Innovation combined with franchise strength

In 2009, a life insurer in Asia approached Munich Re with a problem: it consistently launched new and successful products only to see them copied by competitors within just a few months. Operating in a price-driven market dominated by independent brokers, the insurer saw no way of setting its new covers apart from the many “me too” products that followed on their heels. After a detailed analysis by our Munich Re experts, we identified two key objectives: to protect products and sales processes from easy imitation by competitors and to achieve a stronger position in the context of independent sales channels. The insurer was equipped to develop innovative products, yet its sales processes followed conventional practices, allowing little room for competitive differentiation.In order to secure a competitive edge, the client’s continuously updated range of covers needed the support of a highly attractive new business process.

Automated underwriting in just a few months

Together with brokers and agents, a new point-of-sale solution was found which allowed the agents to assume more underwriting functions. They would not only be able to give final quotes, but also to offer alternatives in cases where loadings, exclusions or declined covers made the original product unsuitable. A smoother sales process and reduced processing times made the solution much more attractive to customers and agents. An Allfinanz Interview Server in conjunction with a comprehensive set of Munich Re underwriting rules and an Allfinanz Business Analytics software was implemented as the POS underwriting system. The system was up and running within the space of a few months. This solution, unique in the life insurer’s marketplace, significantly enhanced the insurer's attractiveness among the independent agents. A key factor in achieving this was the greater speed and efficiency with which policies could be issued – and thus commissions earned.

A perfect solution means a perfect fit

The project is just one example in the wide spectrum of automated underwriting scenarios. A bancassurance sales situation, for instance, has a different set of demands: POS systems can be counterproductive in bancassurance, as applicants are often uncomfortable giving detailed and personal health information to bank staff. An effective alternative in bancassurance can be tele-underwriting, which connects applicants with trained experts in an anonymous telephone interview situation. Finding the ideal approach or combination for a given company means connecting its unique mindset, demands and workflows with proven technologies and processes. You can find the full article with other ways of using automated underwriting in the latest issue of Topics Magazine (1/2012).

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