1. 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

2. Canadian Institute of Actuaries New Business Process Efficiencies Jym Barnes

3. 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

4. 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

5. 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

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

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

8. 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

9. 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

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

11. Information, defined as knowledge in communicable form

12. 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

13. James Robinson Barnes 111 Clear Meadow Dr Ballwin, MO 63011

14. <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>

15. 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

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

17. Underwriting rules are the key to generating meaningful XML!!

18. 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

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

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

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

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

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

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

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

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

27. 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

28. 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

29. 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

30. 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

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

32. Q & A

33. Contact Info:
Jym Barnes