You are on page 1of 10
Business Context Work Product Individual Life- New Business Domain Version 1.0a XYZ Limited _________________________________________________________________

Business Context Work Product

Individual Life- New Business Domain

Version 1.0a

XYZ Limited

_________________________________________________________________

Version 1.0

Effective: April 03, 2006

New Business Domain

Business Context Work Product

Life Domain Competency

Version 1.0a

NAME:

Prepared By

ROLE:

SIGNATURE:

DATE:

Inspected/Reviewed By

Approved By

VERSION HISTORY

Version Date Changed By Changes Made No.
Version
Date
Changed By
Changes Made
No.

Topic

Life Domain Competency

Business Context Work Product

Table of Contents

Page No.

INTRODUCTION ............................................................................................................................................................4 BACKGROUND INFORMATION.........................................................................................................................................4

PURPOSE...................................................................................................................................................................4

SCOPE .....................................................................................................................................................................4 DEFINITIONS AND ACRONYMS.......................................................................................................................................4

REFERENCES..............................................................................................................................................................4

BUSINESS CONTEXT MODEL.....................................................................................................................................4

DEFINITIONS OF KEY ROLES....................................................................................................................................7

INSURER...................................................................................................................................................................7

POLICY OWNER/PROPOSER...........................................................................................................................................7

INSURED...................................................................................................................................................................7

BENEFICIARY.............................................................................................................................................................7

PRODUCER................................................................................................................................................................7

UNDERWRITER...........................................................................................................................................................8

MEDICAL EXAMINER/PHYSICIAN....................................................................................................................................8 SERVICE PROVIDERS (LABORATORY, MIB, TPA ETC)......................................................................................................8

REINSURER................................................................................................................................................................8

REGULATOR..............................................................................................................................................................8

Page 3 of 10

Introduction

Background

To sustain profitability and competitiveness in today's marketplace, insurance

Information

carriers must seek robust, scaleable solutions that will dramatically reduce their operating costs. At the same time, customer expectations of better service and their willingness to shop around are driving a radical shift to truly customer centric products and processes. Insurance companies must compete in highly competitive, tightly regulated markets that reward efficient operations. Writing new business is one such operation in the insurance world which is going though radical shift in view of increased competition and customer expectation.

Purpose

This analysis aims to identify the key players who are engaged in value creation during a new business acquisition phase from a generic life insurance industry perspective. The depiction and elaboration are primarily dealt from an Insurer’s point of view.

This analysis aims to provide the business context of the new business domain of a life insurer dealing with individual life business and subsequently accelerate further analysis and solution development work on the same domain.

Scope

In New Business framework, New Business processing main functions include:

 

Quote Process/Illustration

Proposal Submission

Good order check of the proposals received from producers.

Underwriting of proposals

Issue of policy

Preparation & submission of various statements periodically.

 

Reinsurance arrangements

Definitions and Acronyms

Acronyms

Explanation

NB

New Business

UW

Underwriting

RI

Reinsurance

References

Business Context Model

Page 4 of 10

INSURED REGULATOR PRODUCER UNDER WRITER SERVICE PROVIDER INSURER REINSURER MEDICAL EXAMINER POLICY BENEFICIARY OWNER
INSURED
REGULATOR
PRODUCER
UNDER
WRITER
SERVICE
PROVIDER
INSURER
REINSURER
MEDICAL
EXAMINER
POLICY
BENEFICIARY
OWNER

Page 5 of 10

INSURER

Identifies risk class and accepts insurable risks

Creates Insurance Products

Prices, Promotes and distributes products

Issues policy

Settles Claims as per policy provisions

REGULATOR

Promotes growth of Insurance Industry

Regulate the

Solvency of the company

Training & Appointment of agent

Licensing

Protect Insured's Interest

Handles complaints

Resolves disputes

Enforces Compliance

BENEFICIARY

Beneficiary receives the proceeds of the policy benefits.

Intimates the insurer when the claim arises

POLICY OWNER

Applies for insurance as a proposer

Does assignments, nominations.

Legal Owner of the life insurance policy

Raises policy servicing requests

MEDICAL EXAMINER

Checks and provides medical information of the insured.

PRODUCER       Distributes and sells insurance products Does need analysis Counsels
PRODUCER
Distributes and sells insurance products
Does need analysis
Counsels & services insured
Acts like a field underwriter
Performance tracking of agents
Provides market feed back to the Insurer
REINSURER
Accepts risks from the insurance company
Provides underwriting assistance
May further transfer the risk to another reinsurer
INSURED
Provides all the risk information
Undergoes medical examination if needed
 

UNDERWRITER

Scrutiny of proposal

Check for any adverse risk profile

Identify the risk and classify the risk

Decides the extent of coverage.

Acts on underwriting guidelines

 

SERVICE PROVIDER

Laboratory testing services

BPO and Call center services

Organization providing risk Information

Definitions of Key Roles

Insurer

The company offering protection through the sale of an insurance policy to an insured is known as the insurer. The insurer promises to pay a benefit if a specified event (as covered under contract provisions) occurs.

Policy Owner/Proposer

A person or party, who owns an individual insurance policy, the policy owner is not necessarily the person whose life is insured. The terms policy owner and policyholder are frequently used interchangeably.

Proposer or applicant is the person or party that applies for an insurance policy and called as a proposer till the policy issuance. When a policy is issued, the proposer or applicant becomes the policy owner.

Insured

The insured is the person whose life is insured under the policy. The policy owner and the insured may be and often are the same persons. He or she is the person whose life is covered by the insurance policy and upon his or her death the insurer pays out a death benefit to a designated beneficiary.

Beneficiary

Life Insurance policy proceeds are usually paid to the policy’s beneficiary, the person or party the policy owner names to receive the policy benefits. Beneficiary can be the Insured in case of survival benefits and it would be another person or party nominated by the policy owner to receive the proceeds of death benefits.

Producer

A producer is a representative of an insurance company authorized to sell insurance policies. Producers identify the financial needs and future goals of their customers and recommend appropriate products to suit the need. Producer is a commissioned distributor who is under contract to receive a percentage of premiums generated and provides service to the policy owner on behalf of the insurance company.

Underwriter

The employees of the life insurance company who are trained and responsible to identify and classify the degree of risk represented by a proposed insured are called underwriters. Underwriting consists of two primary phases,

Identifying the risk the proposed insured represents

Classifying the degree of risk the proposed insured represents

Medical Examiner/Physician

A physician appointed by the Insurance Company who produces primary medical report on the proposed insured’s health basing on a physical examination and questioning of the proposed insured. Such a medical report serves as part of a medical information section of the proposal.

Service Providers (Laboratory, MIB, TPA etc)

In exchange for a fee, a number of service providers assist the new business processes of an insurance company. Laboratory or medical clinic provides laboratory services to help the underwriter evaluate the medical risk presented by the proposed insured.

Organizations like Medical Insurance Bureau store and provide medical history information of

proposed insured to insurers. Underwriters of insurance company refer to these organizations to collect and validate more medical information if required. Third Party Administrators provide supplementary processing services to the insurer like payment and collection services, call center support to the customers and producers etc.

Reinsurer

As part of risk transfer strategy, the insurance company transfers part or all the risks on its insurance policies to another insurance company called as Reinsurer. In other words insurance company purchases risk coverage from the reinsurance company in exchange of some premium amount.

Regulator

It is the apex body overseeing the insurance business in a particular territory. It protects the interests of the policyholders, promotes and ensures orderly growth of the insurance industry. The primary role of the regulator is to ensure that the insurance companies

  • - Remain solvent- that they are able to meet their debts and to pay policy benefits when they come due.

  • - Conduct their businesses fairly and ethically.

Business Processes:

The Business Processes of all the roles identified as per the Business context.

Insurer:

  • 1. Appointment Licensing & Registration Process for channel Partners or Producers

  • 2. Producer Performance tracking process

  • 3. Producer Compensation Process

  • 4. Product Development

  • 5. Product Training Process

  • 6. Proposal Scrutiny process

  • 7. Underwriting process

 
  • 8. Policy Issuance

 

9.

Policy Servicing Process

10. Claims Process 11. Reinsurance Arrangements Process 12. Financial Management Process 13. Reporting and Compliance Process

Producer:

 

1.

Appointment, Registration, Licensing and license renewal process

2.

Product Training Process

3.

Lead Generation Process

4.

Illustration and Quotation Process

 

5.

Proposal Submission Process

 

6.

Policy servicing process

7.

Claim support process

Policy Owner:

 
 

1.

Policy application process

2.

Providing risk information to the insurer

 

3.

Premium payment process

 

4.

Policy servicing process

Insured:

 

1.

Providing risk information to the insurer

 

2.

Policy Servicing Process

3.

Survival Claim Process

Beneficiary:

 
 

1.

Claim intimation process

2.

Claim document submission process

 

3.

Change of beneficiary – Authorization process

 

Regulator:

 
 

1.

Licensing process for various entities

 

2.

Regulation Process for ensuring Market Conduct

3.

Regulates the maintenance of margin of solvency

4.

Complaint handling & adjudication of conflicts between various entities

Underwriter:

 
 

1.

Process of risk assessment (identification, eligibility check, classification, attaching

 

decision, Rating process)

 
 

2.

Process of obtaining reinsurance coverage

 

Medical Examiner

 
 

1.

Tie-up with the Insurer

2.

Process of Medical Examination

 

3.

Compensation Process

Page 9 of 10

Service Providers Medical Information Providers

  • 1. Tie-up with the Insurer

  • 2. Process of Medical information collection

  • 3. Providing medical history to the insurer

  • 4. Compensation Process Medical Clinics

  • 1. Tie-up with the Insurer

  • 2. Process of Laboratory Test

  • 3. Compensation Process Third Party Administrators

  • 1. Tie-up/agreement process with the Insurer

  • 2. Process of Knowledge Transfer from the Insurer

  • 3. Performing the identified process(call center services, business process)

  • 4. Compensation Process

Reinsurer:

  • 1. Treaty/FAC agreement process with the Insurer

  • 2. Risk acceptance process

  • 3. Billing Process

  • 4. Claims Process

The business processes in relation to the Insurer only are being considered for this exercise. The Business process model pertaining to Beneficiary & Service Providers are based on the information currently available and do not purport to be comprehensive.