Application Training — ClaimsUnderwriting. Application Training — Underwriting Welcome Introduction Slide 2 Tell us… Your name Your department or area

Application Training — ClaimsUnderwriting

Application Training — Underwriting

WelcomeIntroduction

Slide 2

Tell us…

Your name

Your department or area of work

Number of years you have completed with India Post

Two or three core job-related tasks that you perform everyday

Tools and applications that are used to perform the job-related tasks

Your expectations from this course

Application Training — Underwriting Slide 3

Before We Begin…

May we request you to keep to the training timelines.

May we request you to refrain from side discussions.

May we request you to ask questions freely.

May we request you to keep your phone in silent mode.


Module Agenda

Module Break-up Duration (minutes)

Lesson 1: Understanding Risk 30

Lesson 2: Understanding Underwriting 90

Lesson 3: Application-based Solution for Underwriting 30

Total 150


Prerequisites

Learners should be familiar with:

Basic concepts and terminology associated with Life Insurance and Underwriting

Basic knowledge of working with computers

Basic knowledge of navigating through application interfaces


Module Objectives

This module will provide information on the concepts of Risk and Underwriting as well as an overview of the application-based solution.

After completing this lesson, you should be able to:

Define Risk and Underwriting.

Explain the concepts of Risk and the importance of managing it.

Describe the processes involved in Underwriting.

Discuss aspects of the new application as a solution.


UNDERSTANDING RISK

LESSON 1


Overview and Objectives

Risk is a hazard and a source of danger. Wherever there is Risk, there is a possibility of incurring a loss.

After completing this lesson, you will be able to:

Define Risk.

Describe the types of Risk.

Explain Risk Management factors and techniques.

Understanding Risk


Definition of Risk

Risk is a hazard and a source of danger. Wherever there is Risk, there is a possibility of incurring a loss.

The existence of such risks create financial insecurities like:

—complete loss of income

—uncertainty of income

—additional expenses

—insufficient income

Understanding Risk

RiskRisk

Pure

(Chance of loss or no loss)

Pure

(Chance of loss or no loss)Speculative

(Possibility of gain)

Speculative

(Possibility of gain)

Life Insurance deals with Pure Risks


Different Types of Risk

Understanding Risk


Risk Management Factors and Techniques

Understanding Risk


Risk Management Factors and Techniques…Contd.

Understanding Risk

Avoid Risk: Avoid risk altogether.

Control Risk:

Control risk by taking steps to prevent or reduce losses. For instance, avoid fire by banning smoking near

your building or install water sprinkler/smoke detectors in the building.

Accept Risk:Accept, or retain risk.

Assume all financial responsibility for that risk. For example, in a case of losing an umbrella, the financial loss is not great enough for much concern.

Self-insurance is a risk-management technique by which a person or business accepts financial responsibility for losses associated with specific risks.

Transfer Risk:Transfer risk to another party, thereby shifting the financial responsibility for that risk to the other party, generally for a fee. For example, when an insurer agrees to provide a person or business with insurance coverage, the insurer issues an insurance policy and thus the person or the business transfers the risk to the insurance company for a fee (premium).


Lesson Summary

You have reached the end of the lesson. You should now be able to:

Define Risk.

Describe the types of Risk.

Explain Risk Management factors and techniques.

Understanding Risk


UNDERSTANDING UNDERWRITING

LESSON 2



Underwriting is the process of assessment and evaluation to fix possibility of coverage, coverage amounts (that is Sum Assured) and the premium amount payable.


Define Underwriting.

Describe Underwriting as a part of the Insurance Lifecycle.

List the types of Underwriting.

Discuss key aspects of the process.

Understanding Underwriting


Underwriting Explained




Underwriting as a Part of the Insurance Lifecycle

INSURANCE

NEW PROPOSAL

UNDERWRITING

ISSUANCE OF POLICY

POLICY SERVICING

CLAIMS


REQUIREMENT DETAILS

Risk

Aggregation

System is able to add the sum at risks for multiple policies against a single proposer

for determining the sum of risk.

Underwriting

Quote

A quote is generated by the system and that can be given to the proposer so that he

is aware of the amount of premium that he has to pay for his cover

Automatic

Rating of Life

The system has ability to automatically charge an appropriate premium on life of the

proposer based on the pre-defined business rules

Integration with

Reinsurance

Integration with Reinsurance system would handle common treaty arrangements like

Facultative and Obligatory. Example, proposals will be directly sent for Fac.

Underwriting without manual intervention.

Underwriting

Decisions

Underwriting decisions like, Postpone, Decline, Accept, Conditionally Accept are

available

Financial

Underwriting

Pre-defined business rules would enable financial underwriting based on income,

assets held etc., by the proposer.

Some Requirements at India Post – Postal Life Insurance



Types of Underwriting and Associated Risks


Risk FactorsRisk Factors

MedicalMedical FinancialFinancial PersonalPersonal

Build

Habits

Personal Medical History

Family Medical History

Premium-paying Capacity

Life Income Multiple

Insurable Interest

Occupation

Avocation & Hobbies

Residence

Moral Hazard

DecisionDecision

AcceptAccept DeclineDeclineCounter OfferCounter Offer


Factors Influencing/ Affecting Underwriting



Factors Influencing/ Affecting Underwriting…Contd.


MEDICAL UNDERWRITING1. Build (eg. height, weight, etc.)2. Medical History (eg. Hypertension, Hepatitis, Diabetes, Disability, etc.)3. Medical history of parents (hereditary illness, etc.)

FINANCIAL UNDERWRITING1. Premium-paying Capacity (income, credit worthiness, expenses & liabilities)2. Insurable Interest: financial relationship between insured & proposer3. Life Income Multiple: maximum allowed insurance cover should not exceed a specific multiple of income

PERSONAL UNDERWRITING1. Habits (e.g. smoking, drinking)2. Occupation ( high-risk occupations like such as coal mining, flying, industrial jobs, professionals taking part in extreme sports, etc.).3. Residence (location of dwelling is prone to earthquakes, tsunami etc.)


Means of Underwriting



List of Documents Commonly Used for Underwriting

Application Form

Age Proof

Financial Questionnaire

Housewife/Juvenile Questionnaire

Standard Financial Evidence

Amendment Forms

Occupation Questionnaires



Lesson Summary








APPLICATION-BASED SOLUTION FOR UNDERWRITING

LESSON 3



Using the application, tasks related to Underwriting can be completed easily.


Describe the capabilities of the application.

Define the components of the application.

Discuss the validations and decisions involved in the process.

Application-based Solution for Underwriting


High-level Capabilities of the Application

The Underwriting functionality of the application deals with Individual Business, wherein proposer-proposed, employer-employee, key-man, joint-lives and minor-lives.

The McCamish System will check the proposal information in the auto-underwriting process. If there are any risks that must be manually evaluated, the proposal will be sent to underwriting.

The application enables Underwriters to have a complete view of the underwriting history, claim history or the risk aggregation under the same customer with different policies

The application is able to monitor Underwriting performance and generate customized performance report.



Components of the Application


RISK AGGREGATION

AUTOMATIC UW RESULTS

MANUAL UW-NB

-CS

-CLAIMS

UW HISTORY

CLAIM HISTORYCS HISTORY

INTERNAL COMMUNICATI

ON

IMAGE FILES

LETTERS HISTORY

PROPOSAL BASIC

INFORMATION

ACCURATEUNDERWRITING

DECISION


Underwriting Decisions and Validations

For New Business, if the Underwriting Decision is Conditionally Accepted at the policy level, the system does not display this underwriting decision to all the benefits as the underwriter can impose different underwriting terms for each benefit.

For New Business, if the Underwriting Decision is Accepted at the policy level, the system displays this underwriting decision to all the benefits attached to the main benefit upon the underwriter completion of the decision update.

For New Business, if the Underwriting Decision is Declined or Postponed at the policy level, the system displays the underwriting decision to all the benefits attached to the main benefit. However, the reason for decline or postpone will only be captured and reflected under the main benefit.



Underwriting Decisions and Validations…Contd.


UNDERWRITINGDECISIONS

CONDITIONALACCEPTANCE

ACCEPTANCE CONDITIONAL ACCEPTANCE

POSTPONE DECLINE

EXTRALOADING

LIEN RESTRICTCOVERAGE

EXCLUSION ENDORSEMENT

RICH UNDERWRITING DECISIONS MEET MOST BUSINESS REQUIREMENTS

-Multiple loading options can be applied on Life Assured: Health, Occupation, Avocation, Residential, Aviation, etc.-Within each loading option multiple layers can be applied

EXTRA LOADING /

RATING TYPES

EXTRAMORTALITY

RATEFLAT AMT. PER THOUSAND SA

RATING UP BY AGE

NO OF TIMES OF ANNUAL

PREMIUM

MANUALLY LEVY EXTRA

PREMIUM


Lesson Summary








Check Your Understanding

1. What are the two main types of Risk?

2. What is the basic job of an Underwriter?

3. List some of the documents that are required for Financial underwriting?

4. Name at least two activities involved in reaching an Underwriting decision.

5. Name two factors for each of the types of Underwriting.


Module Summary

You have reached the end of the module. You should now be able to:

Define Risk and Underwriting.

Explain the concepts of Risk and the importance of managing it.

Describe the processes involved in Underwriting.

Discuss aspects of the new application as a solution.


Questions