Future of motor insurance – Let’s Talk Innovationb23ec7c4-fe86-4fe6... · Process may be a good candidate for Robotic Process Automation Is the process a control which has had

Future of motor insurance– Let’s Talk InnovationSwiss Re Nordics Motor Roundtable, August 2018, Sebastian Risse

Swiss Re Nordics Motor Roundtable | 30 August 2018 | Sebastian Risse

• Speed of Claim Payment

• Value Added Services

• Accessibility

• Price

2


• Customer

Portals

• Mobile Apps

• Online Forms

• Social Media

• Digitization

New Technology and Approaches Help to Make the Claims Process More Efficient and Effective

3

Claim

Submission

Claim

Processing

Adjudication

& Decision

Data Analysis, Solution Definition, Project Management, Change Management

Payment

HandlingReinsurance

• Automation

• Document

Classification

• Robotics

• Image

Recognition

• Chatbot

• Big data

• Artificial

Intelligence

• Segmentation

• Drones

• Blockchain

• Offsetting

• Partner

Solutions

• Acord

Messaging

• Risk Based Work

Distribution

• (Claim) Portfolio

Management

Approach to Implement new Technology & Methodology


• Customer

Portals

• Mobile Apps

• Forms

• Social Media

• Digitization

Please vote for the trend that interests you most and you want to discuss further now: Enter a single word only

4

Claim

Submission

Claim

Processing

Adjudication

& Decision

Analysis, Solution, Project, Change

Payment

HandlingReinsurance

• Automation

• Classification

• Robotics

• Imaging

• Chatbot

• Bigdata

• AI

• Segmentation

• Drones

• Blockchain

• Offsetting

• Partner

Solutions

• Acord

• WorkDistribution

• Portfolio


Swiss Re Nordics Motor Roundtable | 30 August 2018 | Sebastian Risse 5


When to use Robots

6


Why use a Robot?

• Robots free up employees

to perform higher value

activities

• Robots are able to automate

manual, repetitive, rules-

based activities

• Robots do not make

mistakes, increasing

accuracy and data quality

• Robots can run 24-7 and in

parallel, supporting peak

workload periods

Should I consider building a robot?

7

Is the process entirely based

on rules?

Is the data available

electronically?

Is the data structured / in a

consistent pattern?

Yes

Yes

Yes

How much time do you spend a

year on this task?

> 0.5 FTE

� Process may be a good candidate

for Robotic Process

AutomationIs the process a control which

has had failures?

< 0.5 FTE

Yes

Robots currently can only handle

Rules Based Processes

No

Consider digitization first (e.g. scanning)

No

Is Manual pre-processing feasible?

(e.g. Align into Template)

No Yes

Robots: Let them work

while you think


Document Classification Example:Flexible Document Classifier

8


The Flexible Document Classifier identifies Claims Documents that require a Manual Review

FDC scans documents

Fraud

Subrogation

Court Case

Client sends claim

documents

Auto

Processing

Manual

Review


Automation Example:Claims to Contract

10


C2C Automatically matches Claims to Contracts by Identifying Key Information in Unstructured Documents to SwissRe’s Structured Databases

11

Analysis In-Box

• 62 Active

Induction email

addresses for

Crew

• 20,000+ monthly

submissions

• 14,000 new

claims per quarter

High

TMA: IF prediction is greater

than X%, THEN select Claim

ID, details are Auto Populated

& Auto=Complete

@Swissre.com

Automated Claim Search

@Swissre.com

@Swissre.com

@Swissre.com

@Swissre.com

@Swissre.com

Automated Contract Search

Automated Cedent Search

Acord:

• Auto Triage

Non-Acord:

• Predictive Triage tools:

• TMA finds claim

• C2C finds contract &

Cedent

Submission Induction Search & Indexation Delivery to Analysis

Analysis In-Box

Analysis In-Box

IF no Claim is found, check via

C2C for Contract ID: IF

prediction is greater than X%,

THEN select Business ID,

details are Auto Populated &

Auto-Complete

IF no Claim or Contract is

found, check via C2C for

Cedent: IF prediction is

greater than X%, THEN select

Cedent ID, & Auto-Complete • Greatly simplify the number of active Routing Rules

• Significantly reduce the number of active Doc Classes

• Still routes to Operations

• Operations verifies triage accuracy and amends as needed

(Teaching the machine)

Low Flow

Name Documents & Infer what

kind of Document Type it is:

I.E. Payment or First Advice

and

Add Process Driver

Process Characterization

InputOutput


Block Chain

12

Swiss Re Nordics Motor Roundtable | 30 August 2018 | Sebastian Risse13

Retrocessionnaire

Reinsurer

Insurer

Policyholder

Smart

Contracts

• Shared mutual ledger

• Consensus Process

• Smart Contracts

• Direct Settlement

From

To

• Credit Risk

• Financial Reporting Risk

• Cash Flow Inefficiencies

• Contract Uncertainty

• Reconciliations

• Multiple Sign-offs and Delays

• Improved Data Quality and Exchange

• Fast and Auditable Sign-offs

• Auto-execution of Contract Conditions

• Faster and Transparent Cash Settlement

Bank

The Vision

Regulator


Swiss Re expects a range of benefits in respect to Block Chain

14

Working Capital

Improvement

Faster and more

efficient premium and

claims settlement and

optimised liquidity

management

Operational Efficiency

and Risk Reduction

Reduction of contract

uncertainty,

reconciliations and

process inefficiencies

Quality and Integrity of

Data

Normalised and high-

quality data in a shared

source with central

control over integrity and

easier auditing

Foreign Exchange

Management

Accelerated FX

transactions and

consistent valuation

Positive Impacts:

• Combined Ratio – conservative estimate of -0.5%

• Improved liquidity

• Risk Reduction

More info: https://www.linkedin.com/pulse/b3i-turning-blockchain-use-case-business-paul-meeusen?published=u


Blockchain Insurance Industry Initiative- Smarter together across the industry

Vision: Jointly explore the potential of Blockchain

technology in industry-wide use cases to better serve

end-clients

Foundation: Five founding members with equal rights

Initiative launch date: October 2016, foundation

meeting took place at Swiss Re

Focus: A first pilot project for retrocession of large

insurance contracts between the participating

companies is initiated, based on Swiss Re developed

prototype

Membership requests: B3i is open for other insurers

and reinsurers to join. Several large firms have

announced interest.

Key Facts

…

Press release:http://www.swissre.com/reinsurance/insurers_and_reinsurers_launch_blockchain_initiative.html


The B3i PedigreeShared Ledger Technology and ACORD

16

Structured Business Process

Template

• clear sub-process triggers & terminations

• Agreed behaviours (eCOT, eBOT)

Communication Standard

• codified exchange

of business data (between different systems)

• mutually verifiable end-points (origin and destination)

• data transport security & integrity

Data Representation Model

• agreed definitions &

attribute relationships

Single Source Data

• Contract Structure

• Attribute population

• Partition & Ownership

Status Tracking

Explicit/Executable Rules

• Agreed calculation logic

• Deterministic Outcome

Single Process

• Orchestrated

• Steerable

• Auditable

• Secure

B3i

Leverage Existing Knowledge Base to Advance Market


Acord Messaging

17


• ACORD is a Non Profit organisation developing transactional standards in the Insurance and Reinsurance

sectors. Also operates in the L&H and P&C forms arena

• Standards are updated every 12-18 months

• Swiss Re is an ACORD member and is heavily involved in developing and maintaining messaging

standards in the Reinsurance and Large Commercial (GRLC) sector

• The Rüschlikon Group is a market initiative of large brokers & carriers* to implement a common subset of

the ACORD GRLC standards called:

– eBOT: Implementation guidelines for accounting and settlement messages

– eCOT: Implementation guidelines for claim messages

• Other industry groups & markets are implementing ACORD messaging, usually aligned to Rüschlikon Group's eBOT / eCOT

implementations (e.g London Market’s Central Services Refresh Program, run by XIS)

*Participants: Aon, Guy Carp, Willis, Swiss Re, SCOR, Munich Re, Hanover Re, XL group, Axis, Partner Re, etc.

ACORD Standards


• CM Sender creates one Claim Movement message per layer:

– Movement Type (various indicators) : initial_advice, subsequent_advice, closing_advice, replacement,

reopen, reopen_and_close

– Type of Transaction (various indicators) : Status Update, Reserve Update and/or Payment, Contract and

Claim Details: references, participations, Date of Loss / Description / Loss Location, etc.

– 100% layer figures (Recommended: FGU figures)

• TA If settlement required, Sender also creates a TechAccount message:

– Transaction Type: claim_transaction

– Xref to Claim and associated CM message

– Net Receiver Shares figures

• TA RIP In case of RIP, a further TA message for the premium amount:

– Transaction Type: reinstatement

– Xref to Settlement TA

ACORD Based Claim Handling:Building a Claim Movement with messages

Xref to TA

Xref to CM

Currency USD

Group Refs link

messages across

multiple currencies

Currency CHF

Currency EUR

Group Ref

TAs

(across

currencies)

Group Ref

CMs

(across

currencies)


Portfolio Management

20




Big Data Example: Claims Development Tracker

23


How Do You Handle Your Claims?


No

rma

lise

d V

alu

e [

$/$

Tot.

Inc]

Adjusted Age in years [AsOfDate – DoL]0

(DoL)3

0.2

2N

0.4

0.6

0.8

1.0

Y

1

Q3 (75%)

Q1 (25%)

Q2 (median)

Historical Claim Behaviour will Identify New Claim Outliers

25

Claim Portfolio Q2 (median)

Q1 / Q3 limit

Total Incurred

Claim portfolio datapoints

Claim IC123 outlier

Claim IC123 development

Deviation from expected behaviour

4


The Claim Handler

Predict the behaviour of a single based on

the claim handler markets, clients and

claims portfolios knowledge

0

20

40

60

80

100

120

0 10 20 30 40 50 60 70 80 90 10

Average prediction error - % over lifespan

Claim Handler


0

20

40

60

80

100

120

0 10 20 30 40 50 60 70 80 90 10

Average prediction error - % over lifespan

Claim Handler CDT

The Claim Handler and Claims Development Tracker

Predict the behaviour based on

historical claim behaviour

• Better claim

adjudication (fraud

detection, portfolio

steering, etc.)

• Better reserve

management (“Single

Claim Reserving”)



28


SwissRe’s “World Class Processes” (WCP) improves internal business processes with the goal to provide

efficient and effective procedures which address the clients needs.

The following slides show how WCP improved the claims handling and technical accounting processes

through:

1. Identification of improvement opportunities through as-is monitoring

2. Root Cause Analysis of as-is Processes

3. Definition of Solutions in Collaboration with the Employees

4. Implementation of new Processes using Change Management Techniques

Overview

29


• Productivity

• Throughput

• Data Quality

• Customer Satisfaction

1. Identification of improvement opportunities through as-is monitoring: Which KPI‘s don‘t match the strategic direction?

30

Business Management Cockpit

World Class Processes:

Claims and Technical Accounting

Continuous Process Improvement through

„Bottom-Up“ Initiatives (Employee Driven)

Regional Process Variations generate

Inconsistent Results

Digitalization und Automation during Triage

and Analysis

Low Data Quality, Productivity and Turnaround

Time don’t Meet Client Expectations

Me

asu

reA

na

lyse

s

• Snapshots

• Trends

• Comparisons

• Best Practice/ Benchmarking


2. Root Cause Analysis of as-is Processes : What has to Change?

31

Sample Analysis Tools



All Bookings are processes equally, no

Segmentation

Employees take No Ownership for data

quality, etc.

Front loaded Analysis require High Manual

Efforts

Low Risk Appetite with lead to non-value

added reviews

Data

Stratification

Process

Mapping

Root Cause

Analysis


3. Definition of Solutions in Collaboration with the Employees: What does our Solution look like?

32

World Class Processes

Segmentation

Become a

detective

Letting go of low risk claims: Give claim approval

to set the claim to “flow” until an exception:

Technical

Approval

Minimize

Manual Claim

Approvals

Technical AccountingFrom “One-Size-Fits-All” to

“Differentiated Processing to Focus on Valuable Transactions”

Claims HandlingFrom “High/Low/Flow challenges” to

“Getting to 60% Flow Business”

Define thresholds &

limits

Approval Expiration

Date

Claims

notice

Approval

needed?Booking EndStart

Smart

ReviewEscalation

Decision

Making

From preventive to detective checks: most

transactions will be good, so we will analyze them

holistically after processing

Less

controlling of

clients that

we trust

Client Impact Focus

Ignore small

mistakes

Put the

efforts into

cases that

need our

attention

Focus on the

big picture

Less

“Queue Mgmt”

Focus on

Important Cases

Find the needle

in the haystack

Keep a Portfolio

Oversight

Steer the business using

Smart Tools


4. Implementation of new Processes using Change Management Techniques: How can we onboard our employees?

33

The 5 Steps of Change Management



Business Experts are included during

analysis and solution definition

Project Steering at all organizational

levels

Dry Runs before going live: Test new

processes on existing portfolios

Multi-tiered KPI Definitions



Legal notice

35

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