22-03-2014, 02:50 PM
Improving Underwriting Efficiencies for a Life Insurer
Underwriting Efficiencies.pdf (Size: 245.4 KB / Downloads: 51)
Transforming a Giant
The client is a leading provider of individual life insurance in US, has annual revenues of over $16 billion and a network of
7500 agents. The company serves over three million policy owners and has been named as one of ‘America’s Most Admired’
insurance company by Fortune Magazine for the last 24 years.
Infosys helped the giant transform its business processes by leveraging technology to eliminate paper related inefficiencies
and in bringing a landmark shift in making it operationally ready for the growth it would see with new product
introductions. As an added benefit this initiative led to 15% reduction in operating cost for ‘new business’ and a cycle time
reduction by over 10 days translating into savings of $ 3.2 million in operating costs annually.
Business Challenge
The client is a unique life insurance company in the US that has figured consistently in the list of most admired companies by
Fortune magazine. The company operates on a ‘cooperative model’ where each insured person is a member of the company
and gets a share of the profit of the company as dividend, while the company maintains adequate reserves.
One of the most critical and complex part of the insurance process is the underwriting owing to regulatory and compliance
requirements as well as direct impact on profitability. The underwriting process was a very linear and paper-intensive process
that had evolved over many years. To put this in a larger context, the paper intensity at Life Insurance firms accounts for over
70% productivity loss while the unit costs of life underwriting processing are 40-50% higher with manual, paper-intensive
processes.
The paper intensity meant that while customers had to wait longer for their applications to be processed, the inefficiencies
also affected their dividends. Coupled with competition in the financial market and the desire to position itself as the best
financial services provider, the company could not ignore such inefficiencies. The ability to process a large volume of new
applications was also critical for the success of new product launches and tackle competition.
However, underwriting was the most important business process for the client as all of their life and disability insurance
revenue flowed through it and affected over 100 paper-based processes, some of which were in use from over 150 years.
Then there was an equivalent of terabytes of data on paper which simply could not be lost. Transforming such a critical
business function was no small challenge. And the client entrusted Infosys with the challenge.
Infosys Advantage
The transformation program aimed at introducing a new process that would eliminate paper-based workflow in the
underwriting process to deliver drastic reduction in overall cycle-time along with huge operational efficiencies. It would
capture electronic images of the underwriting documents in a document management repository and make them available to
underwriters. The solution aimed to allow the client to be scalable and handle huge volume increase in the number of new
applications. Also it would prepare the backbone to embark on future technological advances easily.
Attempts to modernize this process had been tried several times in the past and had failed due to the complexity and faulty
project approaches that were involved
Infosys partnered with the client from the initial feasibility study through the business case, design, development, deployment
and post implementation warranty and support.
The first challenge required careful optimization of over 100+ paper-based processes impacting over a 1000 end users. These
were very stable and predictable and extremely critical since more than 90% of the client’s revenue flowed through it.
Infosys pioneered the implementation of its New Business Process Excellence (NBPE) Solution to deliver successfully. Over
17 new applications and 7 new client facing systems were developed and rolled out to end users. Most of the paper-based
processes were enhanced, changed or retired.