Hannover Re Underwriting AutomationImprove Business Insights & Customer Service

Matthias Adrian

Marklogic World 2016London, June 14 2016

Hannover Re is among the top three reinsurers in the worldTransacts all lines of P&C and L&H business

CanadaToronto

USACharlotteChicagoDenverNew YorkOrlando

ColombiaBogotá

BermudaHamilton

MexicoMexico City

AustraliaSydney

MalaysiaKuala Lumpur

ChinaHong Kong

Shanghai

JapanTokyo

South KoreaSeoul

BahrainManama

SpainMadrid

IrelandDublin

United KingdomLondon

FranceParis

GermanyHannover

ItalyMilan

SwedenStockholmAmerica

Europe

Asia

Africa Australia

IndiaMumbai

BrazilRio de Janeiro

South AfricaJohannesburg

Life & Health reinsurance Property & Casualty and Life & Health reinsuranceProperty & Casualty reinsurance

TaiwanTaipei

Challenges Of A Life & Health Primary Insurance CompanyIt's all about the customer's journey

Interest Information Underwriting Policy ServiceClaims

Customer’s Journey

Create consistent and enjoyable customer experience Offer individually optimal solutions to customers Process interaction primarily driven by customer Finalise business in in one go / no media breaks

Multi / Cross Channel Sales & Service Cost & Efficiency Seamless channel transition No silos between sales and service

Automation as a key value driver Optimal cost & pricing structure

Depending on insurance product up to 90% automation rate required

Hannover Re’s Response To These ChallengesGoals / Strategic positioning

So why are these challenges a reinsurance concern?• Clients of reinsurers (= primary insurers) are looking to their reinsurer for expertise• Historically, risk sharing led to a shared understanding of underwriting decisions• Underwriting policies were agreed and reinsurer took the difficult cases

With digitisation underwriting becomes an automated process• Decision-making now based on rule engines that decide at the point-of-sale• Clients now looking for reinsurer’s digital risk assessment expertise• Client demand for complete automated solutions (e.g. underwriting, claims)

Automation competence is a major competitive factor for reinsurers

Hannover Re decided to build a next-gen automated underwriting system

Designed the digital sales / Multiple channelshr | ReFlex - A new generation of underwriting systems

hr | ReFlex – Backbone For Digital Insurance Sales ProcessesDesigned to handle tomorrow's business today

Interest Information Underwriting Policy ServiceClaims

Web / Mobile Sales Frontend

Integration Middleware(REST)

Risk Assessment

Third-PartyServices

Management Information

Visual Editor

Design Time Analysis TimeRun-Time & Operations

ProductsBenefits / CoversFactor RulesBusiness RulesApplication FormsTranslations

Dashboards & KPIsStandard ReportsAd-hoc ReportsData MiningSearchBusiness Monitoring

Feedback / Learning

hr | ReFlex – Backbone For Digital Insurance Sales ProcessesDesigned to handle tomorrow's business today

Web / Mobile Sales Frontend

Integration Middleware

Risk Assessment

Third-PartyServices

Management Information

KnowledgeEditor

Design Time Analysis TimeRun-Time & Operations

ProductsBenefits / CoversFactor RulesBusiness RulesApplication FormsTranslations

Dashboards & KPIsStandard ReportsAd-hoc ReportsData MiningSearchBusiness Monitoring

Rule base transfer

Underwritten Applications / Policies

Hannover Re Hannover ReOperated by client / External network / Internet

Operated by client / Internal network / Intranet

External DBs (VPN, https, …)

REST APIs

hr | ReFlex – Each Client Operates A Separate Run-Time…… but they all share the same Management Information hub

Management Information

Analysis Time

Dashboards & KPIsStandard ReportsAd-hoc ReportsData MiningSearchBusiness Monitoring

Underwritten Applications / Policies

Hannover ReClient A

Client B

Client C

hr | ReFlex - Management Information As A Self ServiceBusiness insights at your fingertips

Quick Setup / Zero Integration

Goal: Allow quick and intuitive client access to application data

Just configure local installation for automatic upload

No own IT resources or data integration required

Compliant with highest security data protection standards

Available as a central SaaS solution hosted in Europe

MI Ingest(Pre-processing)

hr | ReFlex (Hannover)

MI Upload(Anonymisation)

hr | ReFlex (Client)

Underwritten Applications

(JSON / XML)

Dashboard Users Web Server(Dashboard)SSL/TLS

SQL DWH

?

The MI system is a data warehouse...... so let's quickly do a relational schema

Let‘s start with the functional view and the data flows…

The MI system is a data warehouse...... so let's quickly do a relational schema

risk assessmentknowledge base

determine question

manage riskassessment case

create casedocumentation

legend

<<interface>>

<<function>>

<<data storage>>

arrange tele-underwriting

Interface toHannover Re

interface tocedent

interfaceto cedent

riskdialogue

businessintel-ligence manage tele-

underwriting

interface tocall center

applicationmanagement

perform manual UW

interface tocedent

interface toHannover Re

underwritingworkbenchtransfer to

external UWreceive from external UW

teleunder-writing

HS-E-5

HS-E-6

HS-E-4 HS-E-8 HS-E-7

HS-E-1

HS-E-2HS-E-2 HS-E-2HS-E-3HS-E-3

HS-E-13HS-E-12

HS-E-9 HS-E-14HS-E-15 HS-E-17 HS-E-16 HS-E-18

HS-E-19

create businessreport

HS-E-11

HS-E-27

calculate premium

offer insurance

quotationcase dataHS-E-28

risk assessmentcase data

initiatequotation

acceptoffer

productmana-gement

HS-E-1HS-E-2

manage pro-duct definition

receive answer

assess case

interface toHannover Re

interfaceto cedent

risk assess-ment

HS-E-2 HS-E-3

maintainknowledge base

HS-E-10

provideassessment

HS-E-29

insurancerecommendation

proposeproduct

productdefinition

interfaceto cedent

HS-E-2HS-E-2 interfaceto cedent

HS-E-30

access externalknowledge source

externalknow-ledge

interface toend-customer

externalaccess

HS-E-31

monitor cases

salessupport

policyissuing

interfaceto cedent

interface toend-customer

interface toend-customer

interfaceto cedent

HS-E-2

HS-E-20

HS-E-26HS-E-21 HS-E-22 HS-E-23

HS-E-24

HS-E-25

Data storage

The MI system is a data warehouse...... so let's quickly do a relational schema

Let‘s start with the functional view and the data flows…• Okay – it’s more than we thought but it can be done

The MI system is a data warehouse...... so let's quickly do a relational schema

Let‘s start with the functional view and the data flows…• Okay – it’s more than we thought but it can be done

Let’s look at the data types we need to store…

The MI system is a data warehouse...... so let's quickly do a relational schema

Structured data• IDs, person records, medical records, financial records, …

Semi-structured data• Questions and answers, free text entries, dynamic records…

Textual data and documents• Doctor’s reports, lab results, financial statements, …

Binary or encoded data• Raw data records from third-party service calls, scanned images, …

Unknown data format• Clickstream and process data, log/machine data, ORIGO, ACORD, …

The MI system is a data warehouse...... so let's quickly do a relational schema

Let‘s start with the functional view and the data flows…• Okay – it’s more than we thought but it can be done

Let’s look at the data types we need to store…• Well, that’s quite interesting – but it can be done.• We just need a little bit more time than expected.

The MI system is a data warehouse...... so let's quickly do a relational schema

Let‘s start with the functional view and the data flows…• Okay – it’s more than we thought but it can be done

Let’s look at the data types we need to store…• Well, that’s quite interesting – but it can be done.• We just need a little bit more time than expected.

By the way: Are these assumptions fixed?

The MI system is a data warehouse...... so let's quickly do a relational schema

Well, kind of . But clients may want to…

… set up new insurance products with different properties … make arbitrary changes to the questions and answers … regroup risk factors such as diseases or occupations … introduce new business rules producing different results … add point of sale or channel information for sales controlling … experiment with different questions flows for a segment (A/B testing)

… do something we haven’t even thought of

The MI system is a data warehouse...... so let's quickly do a relational schema

Let‘s start with the functional view and the data flows…• Okay – it’s more than we thought but it can be done

Let’s look at the data types we need to store…• Well, that’s quite interesting – but it can be done.• We just need a little bit more time than expected.

By the way: Are these assumptions fixed?• Okay, guess we need to consider schema versioning as well…• Or maybe we can reduce the details because you don’t need them, right?

The MI system is a data warehouse...... so let's quickly do a relational schema

Let‘s start with the functional view and the data flows…• Okay – it’s more than we thought but it can be done

Let’s look at the data types we need to store…• Well, that’s quite interesting – but it can be done.• We just need a little bit more time than expected.

By the way: Are these assumptions fixed?• Okay, guess we need to consider schema versioning as well..• Or maybe we can reduce the details because you don’t need them, right?

Oh, what about support for the previous system generations?• Dozens of clients are in production using the first and second generation systems• We need seamless reporting when they migrate but schemas are very different

The MI system is a data warehouse...... so let's quickly do a relational schema

Let‘s start with the functional view and the data flows…• Okay – it’s more than we thought but it can be done

Let’s look at the data types we need to store…• Well, that’s quite interesting – but it can be done.• We just need a little bit more time than expected.

By the way: Are these assumptions fixed?• Okay, guess we need to consider schema versioning as well..• Or maybe we can reduce the details because you don’t need them, right?

Oh, what about support for the previous system generations?• Dozens of clients are in production using the first and second generation systems• We need seamless reporting when they migrate but schemas are very different

Not doable - typical business madness - make sacrifices!

The MI system is a data warehouse...

These sacrifices will compromise our value proposition

Development will still blow our budget lines

We will need much more time to market

And maybe miss the boat entirely.

There has to be a better way!

... so let's quickly do a relational schema

A New Hope…...but can it really do the job?

NoSQL: Cool promises on the horizon

FAST & AGILE

DEVELOPMENT

APPROACH

NEW WAYS TO

ACCESS DATA AND

DISPLAY IT

SCHEMALESS

NO MODELING

(WELL, KIND OF)

But which product to choose?Let’s do a PoC!

Proof-of-Concept NoSQL DatabasesEvaluation / Decision Criteria

Marklogic Server Other NoSQL Product(s)

Native ingestion of XML and JSON and other data formats (text, binary)

✓ Would do JSON very well but require tedious conversion for XML

Full-text search and linguistic capabilities for primary languages

✓ Only available in combination with external search engine ( complexity)

Security and data protection (a very strict requirement given the nature of the data)

✓(Common Criteria)

(✓)(required application logic)

Supplementary SQL-style connectivity (e.g. to connect PowerPivot or Tableau)

✓ Very limited at the time

Open and flexible programming model and administration

✓ ✓

Scalability, multi-site operations, transactions

✓ (✓)(transactions required quite a bit of

application logic)

Marklogic Optimal NoSQL Product For Our Requirements

hr | ReFlex - Management Information As A Self ServiceBusiness insights at your fingertips

MI Ingest(Pre-processing)

hr | ReFlex (Hannover)

MI Upload(Anonymisation)

hr | ReFlex (Client)

Application Files

(JSON / XML)

Dashboard Users Web Server(Dashboard)SSL/TLS

SQL DWH

hr | ReFlex - Management Information As A Self ServiceBusiness insights at your fingertips

MI Ingest(Pre-processing)

hr | ReFlex (Hannover)

MI Upload(Anonymisation)

hr | ReFlex (Client)

Application Files

(JSON / XML)

Dashboard Users Web Server(Dashboard)SSL/TLS

Applications (JSON)

Marklogic DB

hr | ReFlex - Management Information As A Self ServiceControl sales and underwriting near real-time

Dashboard & Reporting

Dashboards display most relevant KPIs at one glance

Analyse applications, decisions and sales channel data

Product / channel profitability, risk profiles, customer segmentation

Improve customer journey and underwriting based on evidence

Benchmark and consult with clients how to improve business

hr | ReFlex - Management Information As A Self ServiceUnleash the potential to optimise your business

Intuitive data analytics

Google-like full-text search (different languages)

Rich collection of configurable data charts / data widgets

Limitless dimensions (called “facets”) display mini statistics

Drill to individual applications and see all details (not just some)

Full access to original application data records

Business Benefits For Hannover Re

Leading player: Well-proven, production-hardened system

Stable partnership: Marklogic has been around for a while

Good fit with IT operations: Almost zero admin burden

Single platform for all our data needs

Strong and dependable security

Time-to-market: Continuous improvements

Mission Accomplished

Management Information a competitive advantage in Hannover Re portfolio

Outlook / What’s Next

First pilot clients have been enthusiastic• Clients from Scandinavia, Germany, Russia, US, France• Preparing to take others on around the world…

Complete client data universe

Roadmap

360° Client Data

Management

ApplicationPoS

ApplicationBack office

In-force data

Claims

Contact Information / Further Questions

Matthias Adrian - Founder and Managing Director MyTMC

Contact us: matthias.adrian@mytmc.de or external.matthias.adrian@hannover-re.com

ProductMarketing

Product Management

Agile Development

Architecture & DevOps

Project / Program / Change Management

Industry Expertise / Clients Insurance / Banking / Financial Services Automotive & Engineering Media & Publishing

MyTMC / A passion for digitisation and innovation in B2B and B2B2C

Disclaimer

The information provided in this presentation does in no way whatsoever constitute legal, accounting, tax or other professional advice.

While Hannover Rück SE has endeavoured to include in this presentation information it believes to be reliable, complete and up-to-date, the company does not make any representation or warranty, express or implied, as to the accuracy, completeness or updated status of such information.

Therefore, in no case whatsoever will Hannover Rück SE and its affiliated companies or directors, officers or employees be liable to anyone for any decision made or action taken in conjunction with the information in this presentation or for any related damages.

© Hannover Rück SE. All rights reserved. Hannover Re is the registered service mark of Hannover Rück SE.