Smart leveraging of risk insights for life insurance – HDFC Life Insurance Co. Ltd.
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Smart Leveraging of Risk insights for Life Insurance
Problem
- Non-disclosure in insurance applications
- Lack of awareness of the customer
- Material impact on underwriting due to non-disclosure
- Impact on claims and poor risk assessment.
- Poor customer experience with no post facto checks
Solution
- Arrangements for checking policies issued post-facto and finalizing IIB
- System development of integration with IIB to identify match of customers in their records
- Smart filters to reduce the match of records to actionable by Underwriting
- Integration of actionable customer match findings into the system used by underwriting
- Alerts and validations for adverse customer matches for Underwriting
Outcomes
- Real-time check of IIB for risk assessment
- Enhanced risk assessment
- Ensured risk aversion
- Relevant checks done only where required, ensuring Underwriting processing volume is not inflated and customer is not inconvenienced
- Automation of subsequent due diligence raising
Challenges
- IT system development prioritization
- Integration with IIB
- Ensuring a layer of Underwriting rules and filters are built
- Keeping the system design flexible
- Ensuring stakeholders are aligned to the objective
SKOCH Award Nominee
Category: Service – Large Enterprise
Sub-Category: secService – Large Enterprise
Project: Smart leveraging of risk insights for life insurance
Start Date: 2021-04-01
Organisation: HDFC Life Insurance Co. Ltd.
Respondent: Ms Aparna Karnad Halady, Associate Vice President
www.hdfclife.com
Level: Premium
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Case Study
Smart Leveraging Of Risk Insights for Life Insurance
Introduction
This nomination is regarding the implementation of integration with IIB for Underwriting policies for life insurance. IIB maintains a database of insurance-related information, including policyholders’ medical history, claims history, and fraud cases.
Problems
Earlier, there was no system of disclosure in insurance applications which had a material impact on underwriting. The customers were unaware of security checks which severely impacted the claims when seeking.
Solutions
The department integrated with IIB to identify matches of customers in their records. They made arrangements for checking policies issued post-facto and introduced smart filters to reduce the match of records to actionable by underwriting, which uses an integration of actionable customer match findings into the system. The system also facilitated alerts and validations for adverse customer matches for Underwriting
Outcomes
The project introduced real-time checks of IIB, which enhanced the risk assessment. The risk aversion is ensured and relevant checks are done only where required, ensuring that the underwriting processing volume is not inflated and the customer is not inconvenienced. The system resulted in the overall automation of subsequent due diligence raising.
Challenges
Many challenges were faced, such as prioritisation of IT system development, integration with IIB and ensuring that a layer of Underwriting rules and filters is built. Also, keeping the system design flexible and ensuring that stakeholders are aligned with the objective are other challenges.
Innovation
The project is unique in the industry way of identifying and applying IIB match insights. The Real-Time integration of IIB with the systems used by Underwriting for policy issuance also generated alerts of only red flag matches to the Underwriter. The validations to ensure the Underwriter has factored the IIB match insights in the underwriting decision.
Opportunities
The department plans on using similar insights for Group Insurance and Health Insurance and integrating such risk insights from other sources.
Summary
This overall information can be used to assess the risk associated with insuring a particular individual or group. This can help insurance companies to price their policies more accurately and reduce the likelihood of claims that can impact their profitability.
For more information, please contact:
Ms Aparna Karnad Halady, Associate Vice President at aparnak@hdfclife.com
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