insurance run off forum 2018/5. dramatic savings... · 16 successfully embracing digital analytics...
TRANSCRIPT
INSURANCE RUN OFF FORUM Ian Betley Cologne – 16th March 2018
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CONTENTS Synopsis
• The ongoing technology evolution is actually a revolution
• The gap between legacy and modern widens on a month by month basis, with many legacy businesses becoming unsustainable
• The opportunities to simplify your business, or improve efficiency used to be three dimensional – economies of scale, rationalisation, or shift the problem to someone else……
• …………..now the potential combination of solutions to choose are infinite, as is the risk of failure …which horse do you bet on?
Key agenda items and message
• Providing an overview of the core areas for operational efficiency and how they impact businesses – identifying the depth of use and the boundary of overlap is key, integration of all the strategies is an imperative for success
• Digital
• Data strategy
• Intelligent Operations
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DST MARKET POSITION
Asset Managers
• Provide services to 19 of the top 30 asset managers in the UK market by AUM1
• Over 80 million accounts serviced globally
Banks Provide technology to: • 3 of the top 5 UK retail
banks2
• 2 of the top 4 global custodian banks
Insurers • Relationships with 10
of top 20 leading insurers in Europe3
• US operations service 14 of top 20 life insurance firms
Wealth Managers • Provide services to the
largest UK wealth manager for over 15 years
• 6.8 million retirement accounts serviced in US
• 42 million subaccounts administered in US
SOURCE: 1 The Investment Association. (2017, June). Total Retail and Institutional Funds Under Management for June 2017 in OEICs and unit trusts including through ISAs. Retrieved from www.theinvestmentassociation.org: https://www.theinvestmentassociation.org/fund-statistics/monthly-company-rankings.html?year=2017&type=total&date=062017&submit= 2 Business Insider UK. (2017, July 10). The 18 most profitable banks in the UK. Retrieved from http://uk.businessinsider.com/the-18-most-profitable-banks-in-the-uk-2017-7/#5-nationwide-building-society-143-billion-britains-largest-building-society-controls-around-210-billion-of-the-330-billion-worth-of-assets-of-the-entire-building-society-sector-in-the-uk-14 3 Relbanks. (2017). Top Insurance Companies in Europe. Retrieved from www.relbanks.com: https://www.relbanks.com/top-insurance-companies/europe
Capabilities: Customer Engagement - Intelligent Operations – Risk and Compliance - Data and Analytics
LETS LOOK AT THE CHALLENGES
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CLIENT CHALLENGES
Multi-Channel Sales and Servicing
Technology Burden
Responding to Regulation
Complexity Cost and Change
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INVESTMENT: CONFLICTING PRIORITIES?
How can you make real transformation happen with so many conflicting priorities?
What Drives
Successful Business?
CEO
Shareholder Value
CFO
Controllable Cost Base
Chief Actuary
Product Design
CTO
Modern Technology
Stack
CIO
Digital / Multi-
Channel
COO
Operational Streamlining
CMO
Distribution
Tactical tinkering?
CUSTOMER
Strategic alignment?
Hope is not a strategy!!!
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THE MARKET PREDICTED CHANGE IN OPERATIONS
0 50
100 150 200 250 300 350 400
Front Office
Middle & Back Office
Support Services
IT Run
IT Change
ASSUMING BOOK SIZE OF ONE MILLION POLICIES
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8
AND NOW WHERE DO THE OPPORTUNITIES LIE?
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DIGITALLY-CONNECTED ECOSYSTEM
Data and
Analytics
Customer Engagement
Intelligent Operations
Risk and
Compliance
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THE JOURNEY TO GREATER VALUE
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THE JOURNEY TO GREATER VALUE
BPR, Workflow Automation, Utilities Robotics
Data Science & Analytics
Digital, Call Centre, Mail
THE DIGITAL IMPACT
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DISTRIBUTION DISRUPTION
0
10
20
30
40
50
60
70
80
90
100
Age 25 Age 50 Age 70
Primary Digital
Research Online
Would Seek Professional Advice
Visit Bank
Bank Loyalty
Digital Native Digital Adopter Digital Curious
Line of commoditisation
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CHANNELS: EXISTING V PREFERENCE
-38%
Phone
-35%
+40%
Online
-84%
Post
Source: Consumers, Claims and Key Concerns| © 2016 DST Systems, Inc.
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SUCCESSFULLY EMBRACING DIGITAL
Analytics and digital by design
Digitised business processes
Technology strategy
Business transformation strategy
Corporate culture & organisational DNA
89% of insurers do not use past interactions to support product
recommendations or customer journeys
More than 50% of an insurers costs are embedded within the top
20 core processes
Only 9% of insurers feel they have mastered digital to a point of
differentiation from their competitors
81% of non-life and 48% of life companies believe they will lose
customers if they don’t embrace digital
68% say internal culture or corporate structure is a constraint to
business change
‘The largest insurer of the next generation may not have emerged yet’
McKinsey
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SUCCESSFULLY EMBRACING DIGITAL
Analytics and digital by design
Digitised business processes
Technology strategy
Business transformation strategy
Corporate culture & organisational DNA
Understand your customer and your decisions on how to engage
Maximise automation - abandonment of front office / back office mentality
Buy partner and ‘adapt’ approach – Two speed IT architecture approach and segregate old from new
Define your vision and overall strategy to transform – it’s not about fixing the old
Ensuring Talent management and organisational behaviour is structured to innovate and support digital
THE IMPACT OF DATA MANAGEMENT
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Identify who, when and how to maximise cross and up sell opportunities.
Identify and acquire the most profitable, loyal new business.
Identify valuable clients at risk of churn and proactively act to prevent it.
Engage and inform through insight reporting
Leverage data to meet compliance obligations.
Reduce costs by leveraging triggers, automation and next best action.
Reduce service costs through intelligent operations.
WHERE ANALYTICS CAN CREATE VALUE
Identify and manage high risk situations, individuals and better understand entity relationships.
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CULTURE
Data
Product Design &
Marketing
New Business, Renewals, Claims & Customer
Service
Finance Compliance
& Risk
IT
More Data Open banking
More Data Control GDPR
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LINKING COMPLIANCE WITH OPPORTUNITY
“UK FIRMS SPENT £1.3M EACH ON GETTING SHIP-SHAPE FOR GDPR”
DATAIQ NEWS, 15TH FEBRUARY 2018
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A ‘SMALL’ EXAMPLE
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“LIVING IN A SPREADSHEET SHANTY TOWN”
A ‘SMALL’ EXAMPLE
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A ‘SMALL’ EXAMPLE
THE IMPACT OF INTELLIGENT OPERATIONS
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INTELLIGENT OPERATIONS
Ensuring customer requests: • Go to the right people when required • Are automated where possible • With the right skills • With sufficient capacity
To achieve: • Consistency of desired customer outcome • Optimal revenue • In the right time frame • At the right cost
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MULTI-CHANNEL CUSTOMER ENGAGEMENT
Mail Online Voice Mobile Email Webchat Fax
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Data Feeds
STP / Automation
APIs
Applications
Security
Digital connectivity by design
HOW WE CAN DELIVER
Data and Analytics
Risk and Compliance
IVR Call Center
Online Mobile
Web chat Communications
Customer Engagement
Technology
Call Center
Servicing
Intelligent Operations
Automation
Business Intelligence
Communications
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CAPABILITY: INTELLIGENT OPERATIONS
• Deliver business insights to power more dynamic and effective customer and associate experiences
• Provide transparency and control to better manage risk and quality
• Measure performance to drive a continuous process improvement environment
Foster Insights
Drive Innovation
Incorporate Customer and Associate
Drive Organisational
Change
Manage Costs
Develop Flexibility
Drive Scalability
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ROBOTICS
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CASH/CHEQUE RECEIPTING
Current Process
Future Process
Create deal report (Excel
bankline etc)
Retrieve Cash deals
Enter deal information
Quality check
Print receipt and capture on system
Send report by email
Automated deal report
Robot runs pre-
Validation checks
Robot retrieves
deals
Robot
Enters deal information
Robot creates receipt
Robot sends completed
file
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MONEYOUT AND MONEYIN - CURRENT
MONEYOUT AND MONEYIN - FUTURE
Manual checks
Validate deal
Validate customer
Quality check
reconcile
STP Captures request
Robot
Pre Validate Check
Robot Process
Robot Reconcile
Report
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Retirement and Insurance Solutions
Investor/advisor Opendoor website Contact / front office
Telephone calls
E-mails Retention Complaints
Documents in
Policy servicing Document
s out New Business
Client services
Money out Client finance
Post in
Scanning
Indexing
Cheque banking
Regulatory reporting
Technical corrections
Periodic processes
HMRC rebates
Operations fraud controls
Chargeable events certs/reporting
Daily correspondenc
e
Ad-hoc correspondenc
e
Bulk and ad-hoc mailings
Technical
Underwriting Return of Legal/ AML docs
New Business Applications
Transfers in
Top Up Processing
Annual Reviews
Annuity Admin
Divorce Triviality Small Pot
Commutation
Deceased Maintain Pensions
Drawdown
Serious Ill Health
Partial surrenders
Full Surrenders
Transfer Out Cancellation
Regular & Ad-hoc RIF
Payroll Maintenance
Reinstatements Written Enquiries
Adviser Servicing
Client Maintenance
Illustrations Quotations
Legal Documents, assignments &
Trusts
Group Pensions Maintenance
Premium Servicing
Switch Redirection
AML Servicing
Investment Administration
Archiving
Plan servicing
Arrears
Term adjustments
Sum assured adjustments
Cover basis admin
IIP Portal
Groups
Group Web
CI & Benefit Claims assessing
Rider Benefit Claims processing
Distribution processing
BACS/CHAPS Processing
TT Processing
Debtor/Creditor monitoring and
chasing
General Ledger Accounting
General Ledger Maintenance
Offshore Controls
SEPA Processing
Multi Currency Payments
Client Payments
Balance Sheet Reconciliations
Receipting of payments
Bank Reconciliations
Cheque Reissues
Payroll Payment Processing
Month End Accounting
Infor10 Maintenance
Payslips
Quality controls
Product set servicing : Savings, Bonds, Protection, Pensions IFDS DSTO
Core services retained India Key:
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Retirement and Insurance Solutions
Investor/advisor website Contact / front office
Telephone calls
E-mails Retention Complaints
Documents in
Policy servicing Document
s out New Business
Client services
Money out Client finance
Post in
Scanning
Indexing
Cheque banking
Regulatory reporting
Technical corrections
Periodic processes
HMRC rebates
Operations fraud controls
Chargeable events certs/reporting
Daily correspondenc
e
Ad-hoc correspondenc
e
Bulk and ad-hoc mailings
Technical
Underwriting Return of Legal/ AML docs
New Business Applications
Transfers in
Top Up Processing
Annual Reviews
Annuity Admin
Divorce Triviality Small Pot
Commutation
Deceased Maintain Pensions
Drawdown
Serious Ill Health
Partial surrenders
Full Surrenders
Transfer Out Cancellation
Regular & Ad-hoc RIF
Payroll Maintenance
Reinstatements Written Enquiries
Adviser Servicing
Client Maintenance
Illustrations Quotations
Legal Documents, assignments &
Trusts
Group Pensions Maintenance
Premium Servicing
Switch Redirection
AML Servicing
Investment Administration
Archiving
Plan servicing
Arrears
Term adjustments
Sum assured adjustments
Cover basis admin
IIP Portal
Groups
Group Web
CI & Benefit Claims assessing
Rider Benefit Claims processing
Distribution processing
BACS/CHAPS Processing
TT Processing
Debtor/Creditor monitoring and
chasing
General Ledger Accounting
General Ledger Maintenance
Offshore Controls
SEPA Processing
Multi Currency Payments
Client Payments
Balance Sheet Reconciliations
Receipting of payments
Bank Reconciliations
Cheque Reissues
Payroll Payment Processing
Month End Accounting
Infor10 Maintenance
Payslips
Quality controls
Product set servicing : Savings, Bonds, Protection, Pensions STP Declining Core services
Manual Robot
Key:
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EXAMPLE – PUT IT ALL TOGETHER
• Customer / Family Value /Insight
• Risk of Fraud / Leakage
• Claim Amount
• Claim Circumstances
FNOD
• Personalised Service
• Ease of process
• Channel design
• Product Variants / Claim approach
• Industry Collaboration
Customer Journey • Advice
• New product / customer incentives
• Non-traditional services
• Multi-touchpoint products
Post Claim Management
DEATH CLAIM
Exception based servicing across the end to end process There is no longer a departmental / functional process through
contact centre, claims department, finance, payments etc
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SUMMARY
0
100
200
300
400
Front Office
Middle & Back Office
Support Services
IT Run
IT Change
Cost per policy per annum £100 £30 £15 £8
Assumes Life Insurance policies
Pensions will be similar
Achieving 10%-20% operational savings used to be the norm.
Expensive transformations and rationalisation could yield 40%.
Now 70-90% is viable
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AND FINALLY – HOW IS BREXIT GOING
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