2006 General Meeting Assemblée générale 2006 Chicago, Illinois Canadian Institute of Actuaries L’Institut canadien des actuaires 2006 General Meeting Assemblée générale 2006 Chicago, Illinois

Canadian Institute of Actuaries New Business Process Efficiencies Jym Barnes

Introduction 1986 became very interested in the Internet Seamless integration system to system & device to device Saw the Internet as a power grid Every business process possible connected through the power grid Purchasing an item online and tracking the shipping Scheduling a trip Later known as Straight Through Processing or STP Digital thread Holy grail of workflow 1996 came to the insurance industry by accident Infatuated with STP Underwriting in the family blood

Straight Through Processing (STP) Data passing from one business process to another independent of computer system, organization, country, etc. A digital thread through intermediate business transactions to complete some overall transaction

UW Unusual Characteristics Perfect example of the power grid concept Many independent stakeholders involved in an underwriting decision (transaction) Distributors Outsource providers Paramedical companies MIB Labs MVR Providers – other evidence providers APS Providers Physicians Reinsurers Carriers

Underwriting Issues Shortage of underwriters Completely disconnected processes Expensive Long Same data captured multiple times Limited management information

STP in the new business process is a difficult problem with huge upside if solved!

What is needed? Faster cycle times Lower cost of processing a case Provide as good or better assessment of the risk Provide ability to better understand the risk Real-time Historic management information

Two concepts to solve this problem Digital thread from app entry through issue into historic risk analysis Structured data (information) passed Enriched during each step along the way Extensive underwriting rules available at every point throughout the process

Digital thread Structured data eXtensible Markup Language (XML) Metadata Information

Information, defined as knowledge in communicable form

What is XML? XML is the language for data on the Internet What does that mean for a life carrier? Also known as Meta-data or structured data Provides the opportunity to turn data into information

James Robinson Barnes 111 Clear Meadow Dr Ballwin, MO 63011

<NameAndAddress> <first>James</first> <middle>Robinson</middle> <last>Barnes</last> <street>111 Clear Meadows</street> <city>Ballwin</city> <state>MO</state> <zip>63011</zip> </NameAndAddress>

XML Value Simple yet an incredibly important building block Easier connectivity becomes possible Plug-n-play becomes possible Internet is what makes XML even more valuable

Partial solution XML is only part of the solution How do we know what to tag the information with?

Underwriting rules are the key to generating meaningful XML!!

Underwriting Rules Questions and reflexive questions Scripts Extensive data dictionaries Impairments, medicines, occupations, aliases Decisions – ratings – flat extras Requirements ordering Workflow logic Build – age/coverage Labs, MIB, MVR analysis

If you don’t have a rule for the data entered significant value is lost!

Example Do you have asthma How many attacks do you have per month 0 – 3 Do you use tobacco 4 – 7 8 – 9999

XML Generated <disclosure> <impairment> <impairmentType>Asthma</impairmentType> <bodySystem>Respiratory</bodySystem> <medical>yes</medical> <material>yes</material> <severity>severe</severe> </impairment> </disclosure>

Enrichment Rules turn data into information Rules then turn the information into actions and more information And so on and so on

XML Generated <disclosure> <impairment> <impairmentType>Asthma</impairmentType> <bodySystem>Respiratory</bodySystem> <medical>yes</medical> <material>yes</material> <severity>severe</severe> </impairment> </disclosure>

XML Enriched <riskAssessment> <decision>RUW</decision> <requirements>APS (Pulmonary Function Test</requirements> </riskAssessment>

XML Enriched <workflow> <pushCase>SeniorUW</pushCase> <wait>5 days</wait> <alarm>1 day></alarm> </workflow>

Rules are involved everywhere MIB Labs Reflexive Questions Correspondence E-app Rules Administration UW Rules Call Center Underwriter Workbench Management Information Work Flow

Historic Management Information All XML stored for later reporting Demographics Impairment analysis Requirement analysis Decision analysis Trend analysis Ability to combine with claims What if scenarios

Components of the solution Digital thread through the new business process XML is the key ingredient to make a digital thread possible Extensive underwriting rules necessary to create meaningful XML

Where are we at today? MIB supports XML LabOne supports XML Several administration system vendors support XML Several illustration system vendors support XML Underwriting system vendors support XML

Tomorrow? The opportunity exists today to connect a majority of the new business components and stakeholders using XML A digital thread throughout the new business process is within sight Some companies are further along than others in implementing STP A vast majority are moving in this direction

Every new solution must connect to every other solution or it will be your next problem!

Q & A

Contact Info: Jym Barnes jbarnes@rgatp.com 636-736-7208