Application Training — ClaimsUnderwriting

Application Training — Underwriting Welcome Introduction 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.

Application Training — Underwriting Slide 4 Module Agenda Module Break-upDuration (minutes) Lesson 1: Understanding Risk30 Lesson 2: Understanding Underwriting90 Lesson 3: Application-based Solution for Underwriting30 Total150

Application Training — Underwriting Slide 5 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

Application Training — Underwriting Slide 6 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.

Application Training — Underwriting UNDERSTANDING RISK LESSON 1

Application Training — Underwriting Slide 8 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

Application Training — Underwriting Slide 9 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 Risk 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

Application Training — Underwriting Slide 10 Different Types of Risk Understanding Risk

Application Training — Underwriting Slide 11 Risk Management Factors and Techniques Understanding Risk

Application Training — Underwriting Slide 12 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).

Application Training — Underwriting Slide 13 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

Application Training — Underwriting UNDERSTANDING UNDERWRITING LESSON 2

Application Training — Underwriting Slide 15 Overview and Objectives Underwriting is the process of assessment and evaluation to fix possibility of coverage, coverage amounts (that is Sum Assured) and the premium amount payable. After completing this lesson, you will be able to: Define Underwriting. Describe Underwriting as a part of the Insurance Lifecycle. List the types of Underwriting. Discuss key aspects of the process. Understanding Underwriting

Application Training — Underwriting Slide 16 Underwriting Explained Understanding Underwriting

Application Training — Underwriting Slide 17 Understanding Underwriting Underwriting as a Part of the Insurance Lifecycle INSURANCE NEW PROPOSAL UNDERWRITING ISSUANCE OF POLICY POLICY SERVICING CLAIMS

Application Training — Underwriting Slide 18 REQUIREMENTDETAILS 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 Understanding Underwriting

Application Training — Underwriting Slide 19 Types of Underwriting and Associated Risks Understanding Underwriting Risk Factors Medical Financial Personal Build Habits Personal Medical History Family Medical History Premium-paying Capacity Life Income Multiple Insurable Interest Occupation Avocation & Hobbies Residence Moral Hazard Decision Accept Decline Counter Offer

Application Training — Underwriting Slide 20 Factors Influencing/ Affecting Underwriting Understanding Underwriting

Application Training — Underwriting Slide 21 Factors Influencing/ Affecting Underwriting…Contd. Understanding Underwriting MEDICAL UNDERWRITING 1. Build (eg. height, weight, etc.) 2. Medical History (eg. Hypertension, Hepatitis, Diabetes, Disability, etc.) 3. Medical history of parents (hereditary illness, etc.) FINANCIAL UNDERWRITING 1. Premium-paying Capacity (income, credit worthiness, expenses & liabilities) 2. Insurable Interest: financial relationship between insured & proposer 3. Life Income Multiple: maximum allowed insurance cover should not exceed a specific multiple of income PERSONAL UNDERWRITING 1. 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.)

Application Training — Underwriting Slide 22 Means of Underwriting Understanding Underwriting

Application Training — Underwriting Slide 23 List of Documents Commonly Used for Underwriting Application Form Age Proof Financial Questionnaire Housewife/Juvenile Questionnaire Standard Financial Evidence Amendment Forms Occupation Questionnaires Understanding Underwriting

Application Training — Underwriting Slide 24 Lesson Summary You have reached the end of the lesson. You should now be able to: Define Underwriting. Describe Underwriting as a part of the Insurance Lifecycle. List the types of Underwriting. Discuss key aspects of the process. Understanding Underwriting

Application Training — Underwriting APPLICATION-BASED SOLUTION FOR UNDERWRITING LESSON 3

Application Training — Underwriting Slide 26 Overview and Objectives Using the application, tasks related to Underwriting can be completed easily. After completing this lesson, you will be able to: 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

Application Training — Underwriting Slide 27 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. Application-based Solution for Underwriting

Application Training — Underwriting Slide 28 Components of the Application Application-based Solution for Underwriting RISK AGGREGATION AUTOMATIC UW RESULTS MANUAL UW -NB -CS -CLAIMS UW HISTORY CLAIM HISTORY CS HISTORY INTERNAL COMMUNICATION IMAGE FILES LETTERS HISTORY PROPOSAL BASIC INFORMATION ACCURATE UNDERWRITING DECISION

Application Training — Underwriting Slide 29 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. Application-based Solution for Underwriting

Application Training — Underwriting Slide 30 Underwriting Decisions and Validations…Contd. Application-based Solution for Underwriting UNDERWRITING DECISIONS CONDITIONAL ACCEPTANCE CONDITIONAL ACCEPTANCE POSTPONEDECLINE EXTRA LOADING LIENRESTRICT COVERAGE EXCLUSIONENDORSEMENT 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 EXTRA MORTALITY RATE FLAT AMT. PER THOUSAND SA RATING UP BY AGE NO OF TIMES OF ANNUAL PREMIUM MANUALLY LEVY EXTRA PREMIUM

Application Training — Underwriting Slide 31 Lesson Summary You have reached the end of the lesson. You should now be able to: Define Underwriting. Describe Underwriting as a part of the Insurance Lifecycle. List the types of Underwriting. Discuss key aspects of the process. Application-based Solution for Underwriting

Application Training — Underwriting Slide 32 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.

Application Training — Underwriting Slide 33 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.

Application Training — Underwriting Slide 34 Questions