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Transforming the Life Insurance Industry – Lifestyle Based Analytics

John King and Kim Cohen

The life insurance industry has historically not been particularly innovative when it comes to the use of data as a management tool. Other industries have been able to harness the power of their customer’s information to create shareholder value, and to create a much better customer experience.

To date, innovation around any sort of analytics within life insurers has been difficult due to a combination of lack of local experience in implementing these techniques for life insurers, as well as the cultural nimbleness that is required for innovation.

To really tackle the issue of underinsurance in life insurance, a fundamental change to the way life insurers interacts with potential customers is needed.

In the last 4-5 years, a number of large US life insurers have implemented lifestyle based analytics to their application processes to enable the risk selection process to be simpler – using past application data supplemented with rich marketing datasets and financial data (such as credit and banking transactions). This has shown to be a win-win situation for the life insurer (volume growth without taking on untenable risks), for their relationships with their advisers and their customers.

These models have been used in not only application triage, but also a wide variety of business applications such as enhancing underwriting behaviours, risk based marketing, retention, customer lifetime value and even in agent recruiting and retention.

In this presentation we will explore

  • The concept of lifestyle based analytics
  • Life insurance case studies from the US using lifestyle based analytics, as well as the beginnings of such development in the UK, including the sort of data they leveraged, the challenges the insurers faced, the improvement metrics they are seeing, and the foreseeable next steps for the US life insurance industry
  • How Australian insurers could use these techniques, the sort of data they should consider exploring, and how they might start.

The presenters in combination specialise in life insurance in both Australian consulting and corporate environments and have hands on experience in applying lifestyle application triage in the US for life insurers.

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About the presenters:

John King

John is an actuary and an Associate Director in the Actuaries & Consultants practice for Deloitte in Australia and has been working in the Financial Services industry since 2000.

John is originally from Ireland and worked for 6 years for major Irish life company in Dublin before moving to Australia.

After moving to Australia, he worked for 3 years as at a specialist life insurance company which offered insurance and wealth management services primarily through a banking network. John joined Deloitte in 2009 and currently specialises in consulting to life insurance and financial services clients.

Kim Cohen

Kim is an Actuary and the Senior Product Development Manager at BT Financial Group responsible for continual innovation and structured development of new life insurance offerings.

Prior to moving into BT’s life insurance business, Kim worked for 8 years in Actuarial roles. Her background as a consulting actuary with Deloitte and as BT’s Pricing Actuary has provided a strong analytical foundation to apply to developing market-leading offerings to meet the protection needs of Australians.

Most recently, Kim was the recipient of the 2012 FSC/Deloitte Future Leader’s Award for her paper on the impact of medical and technological advances on underwriting and claims practices.

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