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Whole life insurance in a lifetime financial plan: the case study.

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For these comparisons , I create a case study for a forty-year-old married couple with two children who are now constructing a lifetime financial plan. Jerry and Beth have determined that it is time to get serious about retirement and life insurance planning. Jerry is employed and Beth is a homemaker. These gender roles could be switched, but since life insurance is less expensive for women because of their heightened longevity, having the male be the worker is the more conservative case to consider. Jerry is seeking an additional amount of life insurance death benefit equal to $500,000. This, along with his other life insurance, will be adequate to support his family in the event of his death prior to age sixty-five.

Jerry presently has $60,000 saved in a 401(k) plan with his employer, which is invested with an equity glide path strategy representative of a typical target date fund: 80 percent stocks to age forty-five, 65 percent stocks from forty-five to fifty-four, 50 percent stocks from fifty-five to sixty-four, 40 percent stocks from sixty-five to seventy-four, and 30 percent stocks thereafter. He would like to plan for retirement at sixty-five. I will investigate a portion of his assets to be saved in the future that is equivalent to 401(k) employee contribution limits in 2019 with assumed inflation adjustments: $19,000 can be saved each year until age fifty, and then $25,000 thereafter until age sixty-five to account for the allowed catch-up contributions at those ages.

These contribution limits are inflation-adjusted such that real savings are kept the same, but the nominal amounts increase. Because life insurance premiums are fixed without inflation adjustments, the percentage of the savings directed to insurance decreases over time in real terms. Jerry expects to be in a combined 25 percent marginal tax bracket (22 percent for federal taxes and 3 percent for state taxes) in both his preretirement and postretirement years.

For investment returns, I follow the approach explained in Exhibit 3.11 from Chapter 3. Stock returns are simulated with a randomized risk premium above the fixed 3 percent bond yield. That risk premium has a 6 percent average value with a 20 percent volatility. Inflation is fixed at 2 percent annually. This implies a 1 percent real interest rate. Interest rate risk is eliminated from the analysis, as there is no possibility for fluctuating interest rates to create capital gains or losses for the underlying bond portfolio. The risky asset is based on large-capitalization stocks in the United States. Overall, this represents a 9 percent arithmetic average for stocks (7 percent in real terms). The compounded real growth rate for stocks is 5 percent. The investment portfolio is modeled using 10,000 Monte Carlo simulations for investment returns based on these capital market expectations. I assume investors earn these returns net of any investment or advisory fees. As investments are held in tax-deferred accounts, there is no further tax drag to worry about. Investors earn the gross returns and portfolio distributions are taxed as income.

The Best Options For Senior Life Insurance

Types of life insurance policies.

Life insurance is priced using the 3 percent interest rate and the Social Security Administration 1980 cohort life tables for mortality. Pricing for the term and whole life policies was provided in Exhibits 7.1 and 7.2 . Income annuities are priced in the same manner using the Society of Actuaries mortality data as explained in Chapter 4 , assuming an annual 2 percent cost-of-living adjustment for payments to match the assumed inflation rate. In Chapter 4, the income annuity was priced for females. It offered a 4.56 percent payout rate.

In this case study, we use income annuities for males and couples, and we must also account for the fact that the annuity will not be purchased for twenty-five years. The corresponding payout rates for males and couples with annuities purchased today are 4.83 percent and 3.93 percent, respectively. However, with the longevity improvements assumed by the Society of Actuaries over the next twenty-five years, the male and joint income annuity payout rates at that time are 4.47 percent and 3.75 percent, respectively. These latter numbers are what I use. It makes sense to use different mortality tables to price the life insurance and annuities on account of the different populations that use these financial products. Annuity owners will tend to live longer.

To better understand the impacts of investment volatility on the upside and downside, Monte Carlo simulations are used to create a distribution of outcomes. The exhibits report the 10th percentile, median, and 90th percentile from this distribution. We can interpret the 10th percentile outcome as a bad luck case with poor investment returns. It is possible that retirement outcomes could be even worse, but generally Jerry and Beth could expect better retirement outcomes than seen at the 10th percentile. The median reflects more typical outcomes. It is the midpoint of the distribution, with a 50 percent chance for worse outcomes and a 50 percent chance for better outcomes. These are reasonable outcomes for Jerry and Beth to expect. The 90th percentile is a good luck outcome in which investments perform very well, supporting greater spending and larger account balances.

Note that these results are presented in terms of nominal dollars to avoid reader confusion about why inflation-adjusted dollars are less than nominal dollars. This decision does not impact any comparisons for the relative outcomes between scenarios. However, readers should understand that the purchasing power of a given amount of income or wealth will be less in the future. For today’s forty-year-olds, the real purchasing power of money will be about 60 percent of what it is today at age sixty-five, and about 30 percent of today at age 100, assuming 2 percent inflation.

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*This is an excerpt from Wade Pfau’s book, Safety-First Retirement Planning: An Integrated Approach for a Worry-Free Retirement. (The Retirement Researcher’s Guide Series),  available now on Amazon AMZN

Wade Pfau

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Our claims expertise: 17 real life Gallagher client case studies and outcomes

16 august 2021.

Making a claim is when the value of your insurance is put to the test ‒ and as an insurance broker Gallagher goes the extra distance to ensure that you get the cover you paid for. These examples in our Claims Advocacy in Action: 17 Real Life Case Studies illustrate why The Gallagher Difference really does make a difference to claims outcomes.

The 17 claims case studies include

  • 12 different types of insurance cover
  • why the claim in the case was challenging and/or initially denied
  • how we applied claims and policy expertise to seek improved claims decisions for our clients The Gallagher Difference of claims service in each case.

"These real life claims case studies demonstrate the depth of our expertise as insurance policy experts, the strength of our relationships with our insurance partners, our ability to translate complex claims into something clients can readily understand and engage with, and our determination and commitment to do the right thing for the client." Adam Squire, Head of Claims, Gallagher Australia

Download the report Claims Advocacy in Action: 17 Real Life Case Studies now.

The scope of these insurance claim case studies

From legal costs involved in a professional indemnity construction case to a fire that destroyed the prestigious home on a wine producer's estate, to an employee being wrongfully detained in an African country, these case studies represent the numerous difficulties that can arise from conditions surrounding a claimable loss: issues with causes, circumstances, required documentation and how the insured party responded to the situation.

The examples help illustrate how insurance cover works, the obstacles that can occur in individual cases or how interpretations can differ and, most importantly, how Gallagher advocates claims for our clients.

Classes of insurance cover represented include

  • Commercial property
  • Domestic insurance
  • Construction
  • Marine hull
  • Financial lines
  • Film and entertainment
  • Corporate travel
  • Insolvency.

These make interesting reading in their own right but they also show how a deep understanding of insurance cover can be absolutely pivotal to how claims are viewed by the insurers. That value coupled with our dedication to the Gallagher service ethic of putting our clients first is the basis for The Gallagher Difference.

Gallagher provides insurance, risk management and benefits consulting services for clients in response to both known and unknown risk exposures. When providing analysis and recommendations regarding potential insurance coverage, potential claims and/or operational strategy in response to national emergencies (including health crises), we do so from an insurance and/or risk management perspective, and offer broad information about risk mitigation, loss control strategy and potential claim exposures. We have prepared this commentary and other news alerts for general information purposes only and the material is not intended to be, nor should it be interpreted as, legal or client-specific risk management advice. General insurance descriptions contained herein do not include complete insurance policy definitions, terms and/or conditions, and should not be relied on for coverage interpretation. The information may not include current governmental or insurance developments, is provided without knowledge of the individual recipient's industry or specific business or coverage circumstances, and in no way reflects or promises to provide insurance coverage outcomes that only insurance carriers' control.

Gallagher publications may contain links to non-Gallagher websites that are created and controlled by other organisations. We claim no responsibility for the content of any linked website, or any link contained therein. The inclusion of any link does not imply endorsement by Gallagher, as we have no responsibility for information referenced in material owned and controlled by other parties. Gallagher strongly encourages you to review any separate terms of use and privacy policies governing use of these third party websites and resources.

Insurance brokerage and related services to be provided by Arthur J. Gallagher & Co (Aus) Limited (ABN 34 005 543 920). Australian Financial Services License (AFSL) No. 238312

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The future of life insurance: Reimagining the industry for the decade ahead

life insurance case study with solution

The future of life insurance

The global life insurance industry has seen significant changes over the past decade. Developing economies—predominantly emerging markets in Asia that were formerly small contributors—have become global growth drivers and now account for more than half of global premium growth (Exhibit 1) and 84 percent of individual annuities growth (Exhibit 2). The availability of data has skyrocketed, and insurers have made progress in advanced analytics and artificial intelligence. Digital and mobile advances have raised the bar on transparency and service quality: customers can now file claims and access agents, insurance quotes, and policy information with a few taps on a screen.

The past decade has also introduced new challenges. Life insurers have not benefitted from the bull market (Exhibit 3). Global penetration fell to 3 percent, and premium growth within most developed markets, hovering just below 2 percent per year, struggled to match GDP. Globally depressed interest rates curtailed investment portfolio returns. More recently, the COVID-19 pandemic has depressed global interest rates even lower than those seen in the 2007–08 global financial crisis, leading to disproportional impact on life insurance stock relative to the rest of the market (Exhibit 4).

Meeting the moment across three key areas

Several trends show promise for the life insurance industry in the next decade. Customer demand is at an all-time high. Indeed, the COVID-19 pandemic has only reemphasized the need for mortality protection. Public pension replacement rates are declining and healthcare expenditures are rising—trends also accelerated by the COVID-19 crisis. Economic and demographic trends will also offer tailwinds. The global middle class is rapidly expanding, bringing higher incomes, growing financial wealth, and heightened risks to manage. By 2030, all baby boomers will be age 65 or older, 1 “Older People Projected to Outnumber Children for First Time in U.S. History,” US Census Bureau, March 13, 2018, census.gov. and many are expected to outlive their retirement savings. 2 Johnny Wood, “Retirees will outlive their savings by a decade,” World Economic Forum, June 13, 2019, weforum.org.

We believe the life insurance industry faces a pivotal, dual opportunity: the chance to fulfill growing customer needs while returning to profitability and growth. To achieve these goals, we expect winning life insurance companies to outperform in three areas in the decade ahead:

  • personalize every aspect of the customer experience
  • develop flexible product solutions suitable for a challenging regulatory and interest-rate environment
  • reinvent skills and capabilities

Personalize every aspect of the customer experience

The influence of digital leaders in other industries has raised the bar in insurance as well. Several areas offer opportunities for personalization that can strengthen customer relationships.

A shift to targeted health management. Life insurers have long maintained a focus on mortality protection, but concern over mortality risk has diminished in many markets, which has reduced demand for core products. Despite recent increases in online research for life insurance, spurred by COVID-19, the long-term decline of mortality risk is likely to continue. In the coming decade, insurers will play an increasingly prominent role in the health of their customers as life expectancy increases and health trends change.

By 2030, the number of people aged 60 and older will grow by more than 50 percent, from 900 million in 2015 to 1.4 billion. 3 World Population Ageing 2015: Highlights, United Nations, Department of Economic and Social Affairs, Population Division, 2015, un.org. Further, noncommunicable diseases—those more closely linked to lifestyle and behavior, such as diabetes, heart disease, and lung cancer—will account for 71 percent of all annual deaths globally and represent an increasing proportion of mortality risk. 4 “Noncommunicable diseases,” World Health Organization, June 1, 2018, who.int. We believe these factors will motivate life and annuities manufacturers to engage customers in the shared-value economics of healthy living to increase policyholder longevity.

Technology will play an important part in this transition. The proliferation of data and connected devices, particularly wearables, will continue to make it easier for life insurance companies to play an active role in shaping customer health—to everyone’s benefit. Armed with this information, life insurance companies can provide well-timed, personalized reminders or notifications around diet, disease management, doctor appointments, local health resources, and physical activity. Customers are increasingly willing to share their data in exchange for personalization; today, six in ten consumers globally are comfortable sharing personal details with their insurer in exchange for lower premiums . 5 2020 DXC insurance survey report: The voice of the US customer, dxc.technology.

This trend has accelerated during the pandemic. Evidence shows that a higher proportion of consumers are willing to share data collected on their watches related to heart rate. In recent months, life insurance companies have relied on more detailed questions and medical records instead of in-person physical exams, which have not been possible with physical distancing.

Shared-value life insurance products, such as Vitality, are in the vanguard. Developed by Discovery Group in South Africa, Vitality pioneered the model of shared-value economics in its product design and pricing, leading to the creation of an engaged wellness ecosystem. Now in 22 markets, the program has seen a 35 percent reduction in mortality among highly engaged members and a 15 percent lower policy-lapse rate. 6 Integrated Annual Report 2019, Discovery, 2019, discovery.co.za. In addition, some Japanese life insurance companies are migrating to a “pay as you live” premium schedule with dynamic pricing. For example, customers who exhibit regular healthy behaviors, such as exercising and attending doctor checkups, are rewarded with lower premiums. In the future, we expect to see life insurance transition from the traditional “assess and service” model and shift toward “prescribe and prevent” (Exhibit 5).

Continuous underwriting. The evolution toward continuous underwriting, made possible by increased data and device connectivity, will present further opportunity for personalization. Currently, mortality underwriting suffers from two primary data gaps. First, it is constrained to a single moment in time—the initial sale. The only data available at that point are past morbidity and behavioral data on the customer. Second, it fails to account for a customer’s lifestyle changes, which are significantly more controllable.

We envision underwriting evolving in four phases that will increase personalization and customer engagement (Exhibit 6). Currently, insurers focus on automating the underwriting process to improve efficiency gains and reduce inconsistencies (phase 1). Some insurers have advanced to accelerated underwriting, for which applications are submitted digitally (phase 2). Doing so dramatically reduces the need for invasive fluid and paramedical exams and results in near auto-issuance for the majority of policies. Insurers will then graduate to microsegmentation and personalization, for which individualized offers are generated using comprehensive internal and external data sets with enhanced accuracy (phase 3). Finally, winning companies will provide continuous “one-touch” underwriting, with dynamic adjustment based on customer behavior and suggested personalized actions to significantly drive healthier behavior (phase 4). Together, this four-phase evolution flips the underwriting approach on its head, with environment, health, and lifestyle becoming primary inputs and medical data providing only one part of the picture (Exhibit 7).

Personalized, omnichannel customer journeys. COVID-19 has accelerated many of the digital and omnichannel elements that were in their early stages. According to our research, more than 90 percent of new business in China historically has been generated through face-to-face interactions. Since the onset of the pandemic, insurance companies have been forced to adopt digital-hybrid solutions by incorporating robo-advisors, video conferencing, and web chats. Moreover, a recent McKinsey survey of European consumers found that 54 percent of customers now prefer direct or digital channels, up from 38 percent before the crisis.

Frontline professionals will continue to play a critical role in reaching customers, so insurers must embrace the integration of physical and digital channels once the crisis subsides. Life insurance companies can direct leads to the channel or agent that best serves each customer’s needs. Further, agents will be armed with advanced analytics on their customer base as well as centrally provided digital leads. Throughout the customer life cycle, life insurance companies will engage in multichannel, personalized customer interactions to promote cross-selling (by identifying the most likely “next product to buy”) and proactively reach out to customers who are likely to lapse. Such interactions have the ability to reduce customer acquisition costs by up to 50 percent, generate 5 to 10 percent of new premiums, and reduce customer churn by up to 30 percent.

Upgrading agent capabilities to more effectively use digital tools will be critical to the pending distribution shift. Indeed, a recent McKinsey survey found that “generating leads” and “building initial client relationships remotely” were the two biggest challenges faced by agents. At the same time, these agents were spending disproportionately more time on customer service and administration than before. Life insurance companies will have to significantly invest in digital infrastructure and place analytics at the core of distribution.

Develop flexible product solutions suitable for a challenging regulatory and interest-rate environment

Interest rates have been globally depressed for a decade—and even longer for some economies, such as Germany and Japan. Interest-rate pressure has increased further due to COVID-19, with few signs of abating. At the same time, changing regulations have limited traditional methods of doing business. The most successful life insurers will redouble their focus on innovation and flexibility.

A paradigm shift of the guaranteed product. Over the past five to seven years, some countries (such as France, Germany, the Netherlands, and Switzerland) saw new government bonds issued at negative yields. Meanwhile, others (such as the United States and Japan) continue to combat near zero interest rates. Indeed, according to the European Insurance and Occupational Pensions Authority, more than half of European life policies guarantee an investment return to policyholders that exceeds the yield on the local ten-year government bond. 7 IMF Blog, “European Life Insurers: Unsustainable Business Model,” blog entry by Reinout De Bock, Andrea Maechler, and Nobuyasu Sugimoto, May 5, 2015, blogs.imf.org.

New capital regulations accompanied the globally depressed rates. For example, the introduction of Solvency II in 2016 in the European Union increased capital requirements for traditional life and annuity products, putting further pressure on profitability. Consumers will continue to seek out guaranteed returns, which means many insurers will face challenges in offering guarantees in a capital-efficient, profitable manner. Collectively, traditional long-term, fixed-rate guaranteed products will undergo a paradigm shift in structure, from being rooted in guaranteed returns to offering upside potential with guaranteed downside protection.

Several life insurance companies have already begun moving their portfolios toward a wide variety of capital-markets products, specifically hybrids and unit-linked products, that are more capital efficient and perform well in a low-rate environment. From 2015 to 2019, unit-linked premiums rose $76 billion globally, with European life insurance companies accounting for two-thirds of global growth (Exhibit 8). Such products may offer customers upside potential coupled with downside protection (as high as 100 percent). That said, capital preservation is not free; whether in commissions, expense ratios, or yield, customers pay for it.

Regardless of interest-rate movement, previous fixed-rate guarantees, coupled with new regulations and customer education around alternatives, will likely keep life insurance companies focused on capital-light products in the decade ahead.

Tailor new solutions for different life stages. In the coming decade, the industry will see the emergence of new types of coverage, as well as increasing flexibility in product coverage and payment. Household debt is still more than 100 percent of net disposable income in most OECD countries, 8 “Household debt,” Organisation for Economic Co-operation and Development, 2020, data.oecd.org. divorce rates continue to rise, and job insecurity, spurred by technological advancements, can create uncertainty for consumers. Indeed, despite a decade of global economic growth, nearly 50 percent of consumers are somewhat or very concerned about job loss for themselves or a member of their household . New products that help allay those concerns, as well as increase coverage and premium flexibility, will likely prove increasingly popular with consumers.

Flexible offerings, which allow the consumer to adjust coverage throughout the life of the policy, have been met with favor in Japan. For example, a leading Japanese insurer offers medical, asset accumulation, and protection against dread disease and mortality wrapped into a single product, enabling the customer to add or reduce coverage as their circumstances change.

Value-added services and nonmonetary benefits. Over the next decade, product innovation will likely expand to adjacent services. Life insurance companies, which are competing with not only their peers but also industry alternatives such as pure wealth and asset managers, will increasingly seek to differentiate themselves through value-added services and nonmonetary benefits, particularly as life and health coverage continue to converge.

In Asia and Europe, life insurance companies are already offering administrative support for medical visits, health management, and telemedicine. Going forward, these companies could also partner with ridesharing companies and hotels to provide transportation to doctor visits or accommodations for loved ones in times of need.

Nonmonetary benefits can also address the risk needs of policyholders. For customers concerned with the cost of living in retirement, life insurance companies in Asia and the United Kingdom are replacing financial payouts with guaranteed placement in senior living communities.

Such services give insurers access to fee-based earnings, an alternative revenue stream that could be rewarded by investors. At the same time, fee-based earnings introduce more complexity vis- à -vis sales and after-sales support. Ultimately, earnings potential will be shaped by not only customer demand but also companies’ abilities to upskill distribution talent and develop unique economic solutions for distributors.

Reinvent skills and capabilities

The path to growth in the next decade will require new talent and bolder strategies. Life insurers must respond by capturing more value from existing assets and pursuing targeted M&A.

A radically different workforce, underpinned by skills of the future. By 2030, 44 percent of insurance work activities have the potential to be automated (Exhibit 9). Roles that focus on repetitive work and manual processes will cease to exist in their present form, while technology and digitally savvy workers will increase in value. Emotional, interpersonal, and social skills will also become more critical, especially for customer-facing agents who can help consumers address their changing financial and coverage needs. However, these workforce shifts will not eliminate jobs—our research indicates net new jobs will be created due to advances in automation—but instead change the nature of the work. The COVID-19 pandemic has only accelerated such trends.

In the war for digital talent, life insurance companies are at a disadvantage. The financial-services industry trails other sectors in volume of digital and tech talent. In fact, 80 percent of millennials say they have limited knowledge of the insurance industry, 9 Millennial generation attitudes about work and the insurance industry, a joint paper from The Institutes and Griffith Insurance Education Foundation, 2012, theinstitutes.org. a troubling sign for an industry in which 25 percent of employees believe themselves to be within five to ten years of retirement . However, COVID-19 and recent social unrest present an opportunity for life insurers to reframe their societal purpose, which may help recruit and retain exceptional talent.

Seventy-five percent of global executives agree that upskilling and reskilling employees  must account for at least half of their skills gap solution. Life insurance companies that prioritize those efforts and develop operating models capable of responding to changing demands will distinguish themselves from peers and position themselves at the forefront of “future-proofing” their workforces.

Substantial value from in-force and closed blocks. Given global profitability challenges, insurers can increasingly optimize in-force and closed blocks as a source of value creation. Today, the attention given to in-force management is often not commensurate with its potential. Life insurance companies can enhance in-force value creation by executing across four pillars:

  • commercial effectiveness, including lapse management and cross-selling to policyholders
  • financial efficiencies, such as actuarial optimization and reinsurance
  • operational efficiencies, such as reduced administrative costs
  • transactions, such as partial or full sales of blocks of business

Companies can also extract value from closed blocks, which sometimes have unattractive product economics and operational difficulties or are misaligned with a company’s strategy. Yet given their cash flow potential, earnings, and embedded value, closed blocks deserve time, attention, and resources. Some insurers have helped fund investment in a digital transformation or an analytics road map by rationalizing their closed blocks of business.

By collaborating with actuaries and understanding the implications on the cost model, life insurance companies can often lock in savings and have a onetime release of reserves that is typically in the ten-to-one range (this ratio differs by company). In other words, for every $1 million saved in long-term in-force servicing costs on the closed block, there could be a $10 million onetime reserve release. Life insurance companies often use these funds to finance the transition of the closed blocks to a target platform, invest in digital and analytics, and wide-scale productivity transformations. The reserve can also be used in other ways to reduce the ongoing unit costs.

The prevalence of closed-block specialists will also spark increased sales by insurance companies beyond US and UK markets, where activity has been high. Specialists, whose scale facilitates lower costs per policy, have proven themselves to be effective operators. Moreover, closed-block sales can provide life insurance companies with immediate access to capital, derisked balance sheets, and a reduction in operational costs, such as legacy IT systems. But life insurance companies must remain open to exploring sales, and they can limit the risk of undervaluing their blocks by keeping an eye on the cost base, considering improvements, and structuring partnerships with potential buyers.

Precision M&A for expansion and capability building. Global M&A remained steady in the 2010s. The Americas accounted for 49 percent of deal volume by the end of the decade, followed by Europe at 32 percent. 10 Navigating a course between uncertainty and opportunity: Insurance growth report 2019, Clyde & Co, 2019, clydeco.com. Effective M&A—specifically as a vehicle for market expansion, capability building, and divesting noncore businesses—can continue to be a core strategy for successful life insurance companies.

Growth within existing markets will be challenging; life insurance companies can use acquisitions to enter new geographies, adjacencies, and products. Cross-border transactions can provide access to faster-growing developing markets, such as those in Latin America, and emerging markets in Asia. Moreover, the global middle class, projected to include six billion people by 2030, 11 Annual disposable income of $3,600 and over; World Population Prospects, United Nations, Department of Economic and Social Affairs, un.org; Cityscope by McKinsey Global Institute. will increasingly depend on robust wealth- and asset-management solutions, particularly in markets such as China, where the industry is evolving rapidly. Several life insurance companies have already expanded into such asset-management adjacencies, which have natural synergies with the industry’s core competencies. Others may find capital-light, fee-based businesses in areas related to other competencies to be more practical. Regardless, given the historically strong correlation between return on equity and price-to-book ratio, such investors reward higher return-on-equity businesses.

Life insurance companies can also rely on acquisitions for tech enablement and capability building. The past decade has witnessed the rise of insurtech, which attracted nearly $4 billion of global venture funding in 2018 alone. 12 Joanna Glasner, “A record $2.5B went to U.S. insurance startup deals last year, and big insurers are in all the way,” Crunchbase, April 4, 2019, crunchbase.com. Partially fueling the segment’s rise are the increasingly popular internal venture-capital funds launched by life insurance companies themselves. Such funds provide access to leading start-ups and serve as a natural “buy” versus “build” entry point for leading technologies. Insurtechs can also help companies increase their pace of innovation. The recent crisis has depressed valuations for start-ups, providing insurers an opportunity to acquire capabilities more cost effectively. As a result, life insurance companies can acquire their way to the forefront of disruptive innovation. If a full acquisition is not an option, hiring talent from insurtechs and other start-ups with greater digital and analytics capabilities is another possibility.

Finally, “shrink to grow” will likely prove a popular way for life insurance companies to launch their next growth S-curves. Divestitures of business lines or books of business, an increasingly popular trend at the end of the 2010s, can unlock capital to focus on new opportunities.

Download The future of life insurance: Reimagining the industry for the decade ahead , the full report on which this article is based (PDF–896KB).

Pierre-Ignace Bernard is a senior partner in McKinsey’s Paris office; Kweilin Ellingrud is a senior partner in the Minneapolis office; Jonathan Godsall is a partner in the New York office, where Andrew Reich is a consultant; and Bernhard Kotanko is a senior partner in the Hong Kong office.

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How life insurers can provide differentiated retirement benefits

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Benefits of integrating insurance products into a retirement plan (PDF)

Permanent life insurance and deferred income annuities with increasing income potential outperform investment-only approaches in our analysis..

  • By 2030, gaps in investors’ retirement savings and needed protections are projected to exceed hundreds of trillions of dollars in the US.
  • This presents an opportunity for insurance companies to better serve customers to bridge these chasms, through modified investment approaches.

A lthough facing challenges, the US life insurance and retirement industry has enormous potential to grow. Our analysis reveals insights on how best to capitalize on this opportunity.

EY researchers estimate that by 2030, there will be a $240 trillion retirement savings gap and a $160 trillion protection gap. Insurers are uniquely positioned to address these gaps with products that offer legacy protection, tax-deferred savings growth and guaranteed income for life.

In this article, we explore how two products can be used to meet investors’ savings and protection needs: permanent life insurance  (PLI) and a deferred income annuity with increasing income potential (DIA with IIP), which represents deferred income annuities with persistency bonuses and non-guaranteed dividends. Can integrating PLI and a DIA with IIP into a retirement plan provide value beyond an investment-only strategy?

It is a complex question to answer. To judge the impact of PLI and DIAs with IIP, we analyzed five strategies, conducted across three different starting ages: 25, 35 and 45. For each strategy, our Monte Carlo analysis generated 1,000 scenarios based on randomized input from a range of factors, such as interest rates, inflation rates, equity returns and bond returns. The high-level results are shown in this summary article and elaborated upon in our full report.

Download the full report

The five strategies compared.

We examined a baseline of traditional investment strategies and then compared them against those that also factor in PLI and DIAs with IIP:

EY strategies and product specifications

For strategies that include PLI and a DIA with IIP, the value of these products is included in the total financial assets and considered part of the fixed income allocation. Thus, for strategies where an investor allocates a portion of their wealth to an insurance product, the amount invested in bonds decreases compared to the investment-only strategy.

In our analysis, PLI cash value (accessed via surrenders or loans) are used to fund retirement income during periods of market volatility, allowing investors to avoid liquidating assets from their traditional investments that have fallen in value.

We divided the investor’s assets between the investments and the insurance products. Different product allocation combinations were simulated in increments of 10% of total annual savings for PLI and projected wealth at age 55 for DIA with IIP. Allocation percentages were capped at 60% for PLI and 30% for DIAs with IIP. For each allocation combination, we calculated the after tax retirement income that an investor can sustain in over 90% of the market return scenarios.  We also calculated the legacy value at the end of the time horizon. 

The benefit to investors

Following this methodology, strategies involving PLI and DIAs with IIP excelled overall against investment-only approaches — although the implications must be couched in a bit of nuance, depending on whether the investor is focused more on retirement income than legacy. Here are six key insights on how the strategies compare:

1. PLI + investments strategies outperform investment-only and term life + investments strategies.

PLI tends to provide superior returns over fixed income in long-run scenarios, while the term premium acts as a drag on portfolio performance. PLI loans act as a buffer against market volatility as well, improving returns since the investor does not have to sell and realize losses on investments. 

2. DIA with IIP + investments strategies outperform other strategies in retirement income.

With DIAs with IIP + investments, the investor uses a portion of the balance to purchase the DIA with IIP and does not receive that balance upon death, boosting retirement income compared to other strategies. Projected legacy tends to be lower than PLI + investments but higher than the legacy from the investment-only strategy. The latter observation is a result of the DIA with IIP outperforming fixed income due to mortality credits and dividends.

3. Integrated strategies are more efficient than investment-only strategies.

For example, a strategy allocating 30% of annual savings to PLI and 30% of assets at age 55 to a DIA with IIP produced 5% higher retirement income and 19% more legacy than the investment-only strategy, because PLI and DIA with IIP both outperform fixed income. 

4. For investors with a higher risk appetite, integrated strategies remain better. 

We performed the same exercise described above, except that we calculated the retirement income (and legacy values) based on the amount that the investor can sustain in over 75% of the market return scenarios, reflecting the expectations of an investor with higher risk. Income and legacy do not improve as much, yet an integrated portfolio still provides benefits relative to an investment-only strategy.

5. Integrated strategies provide investors with the flexibility to focus on the financial outcomes most important to them: retirement income, legacy or a balance in between.

 We found that PLI and a DIA with IIP mix well together, whether a person is focused on retirement income, legacy or a balance. Higher allocations to a DIA with IIP emphasize retirement income, while higher PLI boosts legacy protection. The right mix depends on the investor’s preferences.

6. Allocation up to 30% of annual savings to PLI and up to 30% of wealth at age 55 to DIA with IIP may be appropriate when optimizing retirement income and legacy value outcomes. 

Results varied by investor starting age. But the projected retirement income and legacy values generally supported allocations of 10% to 30% to both PLI and DIAs with IIPs. An investor solely focused on maximizing legacy may still opt to allocate more to PLI, but when that allocation redirects too many assets away from equities, the reduction to retirement income can be substantial.

The results point to the value of PLI and DIAs with IIPs in a retirement plan: an integrated approach can give comfort and peace of mind to retirement investors by providing legacy protection, tax-deferred savings growth, and guaranteed income for life without sacrificing their present lifestyle. Insurers can use these products to strengthen their relationships with investors, seizing upon the possibilities in a marketplace that has proved challenging.

This article has been authored by Christopher Raham, Justin Singer, Ben Yahr, Ben Lee, and Annie E Mayer.

Investment-only approaches do not deliver as promising returns as those that are combined with PLI and DIAs with increasing income potential, an EY analysis shows, although there are distinctions to consider depending on whether more retirement income or legacy value is desired. Allocation levels should be approached with care.

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Comprehensive Group Life Insurance Solution At Swiss Life

Project objectives.

The main objectives of the Comarch solution implementation project at Swiss Life focused on increasing the insurer’s business competitiveness and profitable growth , as well as reducing operational and noncompliance risks .

Swiss Life needed a comprehensive solution that would cover all life and pension insurance processes end-toend, including new business processes, contract and claim management, as well as management of their clients and insureds. The key advantage of our solution is definitely a self-service online portal for all group life insurance participants who can manage their coverage and investments without the need of contacting the insurer’s customer center.

Tomasz Jędroszkowiak Project Manager, Comarch

We were in need of an innovative solution that would make us closer to our clients. We wanted to enhance our relationship with them and make our services more client-oriented. The Comarch system offered the open architecture, wide business process management abilities, advanced business intelligence and a rich integration scope, including among others, banking systems, transfer agents, or general ledgers. That would allow us to handle all business processes in one solution.

Tony Ciccarella IT Program Manager/Architect, Swiss Life

PROJECT RESULTS / BENEFITS

Owing to the implementation of the Comarch solution all Swiss Life insurance processes are fully covered . The full range of insurance products are supported and all contracts managed in one system. Besides, the user experience and customer service have been significantly enhanced thanks to the self-service portal.

Apart from the core functionality of the Comarch Life Insurance system, we also implemented an integrated document management module, numerous external interfaces and Comarch Insurance Client Essentials – portal dedicated to policyholders’ HR departments and contract managers as well as individual insureds.

We are satisfied with the results of the project as our clients can easily manage all insurance and pension contracts, while their employees stay up-to-date and manage their policies and investments on their own. Moreover, Swiss Life has better control and overview of our pension business and more opportunities to grow it.

Madeleine Simmler Weiss Project Manager Business and Head Client & Partner Services, Swiss Life

PROJECT CHALLENGES

The project was multilayer and multistage as Swiss Life required both new functional and technical architecture to ensure optimal business process management for the future. Moreover, the desired solution was to smoothly operate in several countries and numerous languages, meeting multinational needs and regulations. Thus, the project was divided into several phases each concluded with go-live releases.

Good cooperation made us complete this large project successfully. The challenge was mostly related to the extensive data migration and integration of the Comarch solution with our external systems.

We had to face some real challenges related to the robust area of the implementation. This large enterprise required strong and extended project teams with specialists from various fields and business units leaning on strong management support.

SOLUTION COMPETITIVE ADVANTAGES

Comarch life insurance.

The comprehensive system supporting individual and group life insurance. The solution allows efficient management of all parts of insurance business, including product definition, offer presentation, underwriting, policy operations, claim processing, fund management, billing and collection, technical provisions and reserves, calculations and reporting.

Thanks to its modular structure and unique flexibility, it can be tailored to individual customer needs, including the individual life cycle of business processes and the specific nature of a particular insurance company. It allows the insurer to optimize and grow all aspects of life insurance in line with latest trends and changing markets requirements.

Read more about Comarch Life Insurance

Comarch Insurance Client Essentials

The intuitive self-service portal providing the insurance company’s clients with fast insight into their insurance covers and new product offering, anytime, anywhere. The tool also allows them to perform independent insurance operations without the need to contact their insurer’s customer service directly. For the policyholders’ HR departments and contract managers the system provides additional functionalities for group life contract management.

Read more about Comarch Digital Insurance (Comarch Insurance Client Essentials before)

The Swiss Life Group is one of Europe’s leading comprehensive life, pensions and financial solutions providers. As a market leader of group life business in Luxembourg, the company offers local risk and occupational pension solutions as well as global employee benefits solutions for expatriates and mobile employees to local and multinationals companies. As a leader in cross-border life insurance solutions for high net worth individuals, Swiss Life offers high-end life insurance cover combined with asset management, from Luxembourg, Liechtenstein and Singapore

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The u.s. life insurance industry description.

This note provides a background on the US life insurance regimes for the life insurance industry, including descriptions of different types of insurance, annuities, and regulation.

Case Description The U.S. Life Insurance Industry

Strategic managment tools used in case study analysis of the u.s. life insurance industry, step 1. problem identification in the u.s. life insurance industry case study, step 2. external environment analysis - pestel / pest / step analysis of the u.s. life insurance industry case study, step 3. industry specific / porter five forces analysis of the u.s. life insurance industry case study, step 4. evaluating alternatives / swot analysis of the u.s. life insurance industry case study, step 5. porter value chain analysis / vrio / vrin analysis the u.s. life insurance industry case study, step 6. recommendations the u.s. life insurance industry case study, step 7. basis of recommendations for the u.s. life insurance industry case study, quality & on time delivery.

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Case Analysis of The U.S. Life Insurance Industry

The U.S. Life Insurance Industry is a Harvard Business (HBR) Case Study on Innovation & Entrepreneurship , Texas Business School provides HBR case study assignment help for just $9. Texas Business School(TBS) case study solution is based on HBR Case Study Method framework, TBS expertise & global insights. The U.S. Life Insurance Industry is designed and drafted in a manner to allow the HBR case study reader to analyze a real-world problem by putting reader into the position of the decision maker. The U.S. Life Insurance Industry case study will help professionals, MBA, EMBA, and leaders to develop a broad and clear understanding of casecategory challenges. The U.S. Life Insurance Industry will also provide insight into areas such as – wordlist , strategy, leadership, sales and marketing, and negotiations.

Case Study Solutions Background Work

The U.S. Life Insurance Industry case study solution is focused on solving the strategic and operational challenges the protagonist of the case is facing. The challenges involve – evaluation of strategic options, key role of Innovation & Entrepreneurship, leadership qualities of the protagonist, and dynamics of the external environment. The challenge in front of the protagonist, of The U.S. Life Insurance Industry, is to not only build a competitive position of the organization but also to sustain it over a period of time.

Strategic Management Tools Used in Case Study Solution

The The U.S. Life Insurance Industry case study solution requires the MBA, EMBA, executive, professional to have a deep understanding of various strategic management tools such as SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

Texas Business School Approach to Innovation & Entrepreneurship Solutions

In the Texas Business School, The U.S. Life Insurance Industry case study solution – following strategic tools are used - SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis. We have additionally used the concept of supply chain management and leadership framework to build a comprehensive case study solution for the case – The U.S. Life Insurance Industry

Step 1 – Problem Identification of The U.S. Life Insurance Industry - Harvard Business School Case Study

The first step to solve HBR The U.S. Life Insurance Industry case study solution is to identify the problem present in the case. The problem statement of the case is provided in the beginning of the case where the protagonist is contemplating various options in the face of numerous challenges that Insurance Life is facing right now. Even though the problem statement is essentially – “Innovation & Entrepreneurship” challenge but it has impacted by others factors such as communication in the organization, uncertainty in the external environment, leadership in Insurance Life, style of leadership and organization structure, marketing and sales, organizational behavior, strategy, internal politics, stakeholders priorities and more.

Step 2 – External Environment Analysis

Texas Business School approach of case study analysis – Conclusion, Reasons, Evidences - provides a framework to analyze every HBR case study. It requires conducting robust external environmental analysis to decipher evidences for the reasons presented in the The U.S. Life Insurance Industry. The external environment analysis of The U.S. Life Insurance Industry will ensure that we are keeping a tab on the macro-environment factors that are directly and indirectly impacting the business of the firm.

What is PESTEL Analysis? Briefly Explained

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in The U.S. Life Insurance Industry case study. PESTEL analysis of " The U.S. Life Insurance Industry" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

How to do PESTEL / PEST / STEP Analysis? What are the components of PESTEL Analysis?

As mentioned above PESTEL Analysis has six elements – political, economic, social, technological, environmental, and legal. All the six elements are explained in context with The U.S. Life Insurance Industry macro-environment and how it impacts the businesses of the firm.

How to do PESTEL Analysis for The U.S. Life Insurance Industry

To do comprehensive PESTEL analysis of case study – The U.S. Life Insurance Industry , we have researched numerous components under the six factors of PESTEL analysis.

Political Factors that Impact The U.S. Life Insurance Industry

Political factors impact seven key decision making areas – economic environment, socio-cultural environment, rate of innovation & investment in research & development, environmental laws, legal requirements, and acceptance of new technologies.

Government policies have significant impact on the business environment of any country. The firm in “ The U.S. Life Insurance Industry ” needs to navigate these policy decisions to create either an edge for itself or reduce the negative impact of the policy as far as possible.

Data safety laws – The countries in which Insurance Life is operating, firms are required to store customer data within the premises of the country. Insurance Life needs to restructure its IT policies to accommodate these changes. In the EU countries, firms are required to make special provision for privacy issues and other laws.

Competition Regulations – Numerous countries have strong competition laws both regarding the monopoly conditions and day to day fair business practices. The U.S. Life Insurance Industry has numerous instances where the competition regulations aspects can be scrutinized.

Import restrictions on products – Before entering the new market, Insurance Life in case study The U.S. Life Insurance Industry" should look into the import restrictions that may be present in the prospective market.

Export restrictions on products – Apart from direct product export restrictions in field of technology and agriculture, a number of countries also have capital controls. Insurance Life in case study “ The U.S. Life Insurance Industry ” should look into these export restrictions policies.

Foreign Direct Investment Policies – Government policies favors local companies over international policies, Insurance Life in case study “ The U.S. Life Insurance Industry ” should understand in minute details regarding the Foreign Direct Investment policies of the prospective market.

Corporate Taxes – The rate of taxes is often used by governments to lure foreign direct investments or increase domestic investment in a certain sector. Corporate taxation can be divided into two categories – taxes on profits and taxes on operations. Taxes on profits number is important for companies that already have a sustainable business model, while taxes on operations is far more significant for companies that are looking to set up new plants or operations.

Tariffs – Chekout how much tariffs the firm needs to pay in the “ The U.S. Life Insurance Industry ” case study. The level of tariffs will determine the viability of the business model that the firm is contemplating. If the tariffs are high then it will be extremely difficult to compete with the local competitors. But if the tariffs are between 5-10% then Insurance Life can compete against other competitors.

Research and Development Subsidies and Policies – Governments often provide tax breaks and other incentives for companies to innovate in various sectors of priority. Managers at The U.S. Life Insurance Industry case study have to assess whether their business can benefit from such government assistance and subsidies.

Consumer protection – Different countries have different consumer protection laws. Managers need to clarify not only the consumer protection laws in advance but also legal implications if the firm fails to meet any of them.

Political System and Its Implications – Different political systems have different approach to free market and entrepreneurship. Managers need to assess these factors even before entering the market.

Freedom of Press is critical for fair trade and transparency. Countries where freedom of press is not prevalent there are high chances of both political and commercial corruption.

Corruption level – Insurance Life needs to assess the level of corruptions both at the official level and at the market level, even before entering a new market. To tackle the menace of corruption – a firm should have a clear SOP that provides managers at each level what to do when they encounter instances of either systematic corruption or bureaucrats looking to take bribes from the firm.

Independence of judiciary – It is critical for fair business practices. If a country doesn’t have independent judiciary then there is no point entry into such a country for business.

Government attitude towards trade unions – Different political systems and government have different attitude towards trade unions and collective bargaining. The firm needs to assess – its comfort dealing with the unions and regulations regarding unions in a given market or industry. If both are on the same page then it makes sense to enter, otherwise it doesn’t.

Economic Factors that Impact The U.S. Life Insurance Industry

Social factors that impact the u.s. life insurance industry, technological factors that impact the u.s. life insurance industry, environmental factors that impact the u.s. life insurance industry, legal factors that impact the u.s. life insurance industry, step 3 – industry specific analysis, what is porter five forces analysis, step 4 – swot analysis / internal environment analysis, step 5 – porter value chain / vrio / vrin analysis, step 6 – evaluating alternatives & recommendations, step 7 – basis for recommendations, references :: the u.s. life insurance industry case study solution.

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Pacific Life

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Call for change

Putting the customer first

Pacific Life is a leading Fortune 500 life insurance and retirement solutions company in the United States with more than $200 billion in assets. The company, whose legacy dates back to 1868, provides life insurance, annuities, mutual funds and other investment products to individuals, businesses and pension plans. Pacific Life works with a network of independent financial professionals who sell these products to their end customers.

With an eye on the future, Pacific Life wanted to remain relevant in the digital age and strongly positioned to thrive over its next 150 years in business. But first, they would have to overcome challenges such as increased competition from new entrants in FinTech and InsureTech, legacy infrastructure, evolving distribution channels and changing customer expectations.

"Our goal was to operate as one company with shared visibility into every relationship and touchpoint" — Rob Goodman , Vice President – Customer Experience Office, Pacific Life

Reimagining core products and revamping the product-focused operating model would also equip Pacific Life and its partners to market and sell in new ways. Leadership at Pacific Life knew that investing in digital transformation solutions was the answer to shifting the company from a product focus to instead having a laser focus on customer needs, and more importantly, being able to deliver on those needs.

When tech meets human ingenuity

One new, global outlook

Pacific Life wanted to digitize its business, deliver seamless and personalized customer experiences, and operate more efficiently by building a unified technology platform. They chose Accenture and Salesforce as the partners to enable this digital transformation, from program concept through delivery.

The first step of the journey was a design thinking exercise in which Pacific Life, Salesforce, and Accenture collectively reimagined how the company’s product set and capabilities could be evolved to unlock the greatest value. During this foundational exercise, the team at Pacific Life learned more about how Salesforce products were the pathway to achieving their business goals.

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The team decided on an innovative suite of solutions—including an enterprise sales, service and marketing transformation—that would deliver the digital capabilities that Pacific Life needed to build relationships and strengthen interactions with their customer and advisor base. The ultimate solution that Pacific Life adopted was built around the Salesforce Financial Services Cloud, but also included Marketing Cloud, CRM Analytics, MuleSoft, and additional Salesforce ecosystem products.

Educating the team at Pacific Life on how to use and get the most out of these new technology tools was integral to success. Accenture helped to establish a Center of Excellence (COE) operating model that instantiated program roles (such as scrum masters and product owners), program structure, agile training, delivery methodology, cadences and routines.

The last step was creating a transformation roadmap that detailed the sequence of releases across multiple divisions and across sales, service and marketing. A global delivery model allowed the team to deliver capabilities, in alignment with the roadmap, through a series of sprints.

A valuable difference

Technology that evolves

Pacific Life experienced several exciting “firsts” throughout the transformation. It was one of the first times the company’s life insurance and retirement solutions worked together on a large-scale transformation, marking a successful cross-enterprise transformation. It also was one of the first cloud programs, the first software-as-a-service programs, the first agile programs leveraging a global delivery model at scale. 

Blazing the trail to digital excellence included successful delivery of five major releases and more than 20 minor releases of the solution set. Notably, more than six disparate user groups across life insurance and retirement were transitioned to the platform and can now collaborate across a single, integrated platform seamlessly. 

Woman using sitting in couch while using computer

With those releases successfully delivered, Pacific Life gave its entire organization a single, comprehensive view into customer needs. Understanding the breadth and depth of customer relationships across the company, along with the specific nuances and needs of each customer, allows Pacific Life to keep up with customers’ fast-evolving preferences and to meet their needs proactively in the channel that best suits them. Pacific Life can track conversions of lead to sales and can use predictive analytics to understand the next-best action to take in a variety of sales and service scenarios. With better customer targeting and segmentation through data-driven analytics, the company is reducing customer churn, increasing lead volume and conversions, improving wholesaler productivity, boosting operational efficiency and enhancing campaign effectiveness.

"With this new unified digital platform to better engage with the financial professional community and consumers, Pacific Life has a firm footing for the next 150 years" — Mike Wallis , Managing Director – Accenture’s North American Salesforce Insurance Business

Pacific Life’s Salesforce platform has proven to be resilient and scalable, while also being fluid and nimble to grow iteratively as Pacific Life’s needs evolve and to serve as a platform for ongoing continued transformation. Accenture has been proud to have helped Pacific Life in this journey, and to have continued supporting Pacific Life’s Salesforce Platform running efficiently so that Pacific Life can continue to tap value from the platform—and the Salesforce ecosystem—each and every day.

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ICICI Prudential Life Insurance: Using Vision API to efficiently process thousands of documents

ICICI Prudential Life Insurance logo

About ICICI Prudential Life Insurance

ICICI Prudential Life Insurance aims to lead the Indian insurance field through quality products and a hassle-free claim settlement experience. A customer-centric company, it offers long-term savings and protection plans to meet customers’ needs at every stage of life.

ICICI Prudential Life Insurance significantly enhances the speed and efficiency of its underwriting and approval processes by harnessing the agility and machine learning capabilities of Vision API.

Google cloud results.

  • Helps enable instant document approval with optical character recognition by Vision API
  • Processes 100,000 documents in 20 minutes with automated document processing product Recognic, powered by Vision API and Apigee
  • Helps increase the number of applications processed by 30% within the same timeframe

Cuts document processing time from 10 minutes to 10 seconds

The insurance landscape in India has seen significant changes in recent years with the adoption of new technology. As one of the major insurance providers in the country, ICICI Prudential Life Insurance has aimed to lead in this transformation journey. "There has been a data explosion across India over the past few years, together with a high mobile penetration rate. Today, about 60% of our customers approach us via mobile, for example, which was certainly not the case before," says Alpesh Karnik, SVP, IT, at ICICI Life Insurance.

Consumer expectations have also evolved, with easier access to information and online services. "Consumers today are more informed on the importance of investing in insurance products, so there’s much more of a pull factor when it comes to sales, but they also want to be able to get these products quickly and easily," adds Alpesh. To meet the demands of these consumers, ICICI Prudential Life Insurance realized it needed to make its processes even faster and more efficient. Looking to upgrade its infrastructure, the company turned to Google Cloud .

“The biggest benefit of using Recognic and Vision API is that it eliminates the initial waiting time, which can result in drop-offs. Now customers can know immediately whether their documents are sufficient, or if they need to revise or submit any others.”

Serving customers better by speeding up processes with Google Cloud

ICICI Prudential Life Insurance's distributors were already using tablets to input customer data faster and more efficiently, but many of the company’s solutions still required a team at the back end to manually sift through documents for approval. This meant that customers needed to wait five or six hours, or sometimes until the next working day, to know if their documents were approved or needed revision.

That all changed after partnering with Google Cloud Premier Partner Searce to take advantage of its AI/ML powered automated document processing product Recognic , which is built on Google Cloud. Developed using the optical character recognition (OCR) capabilities of Cloud Vision , Recognic reads, understands, and validates documents at scale, enabling organizations that handle massive amounts of paperwork to digitize these documents and then accurately store and index them.

“Google Cloud has cut down the middle- and back-office work, leading to a 30% increase in the number of applications we can process in the same time span without the need for additional resources."

“In the case of ICICI Prudential, the biggest benefit of using Recognic and Vision API is that it eliminates the initial waiting time, which can result in drop-offs. Now customers can know immediately whether their documents are sufficient, or if they need to revise or submit any others,” Alpesh adds.

Alpesh explains that if the details on the application form match the documents provided, the case doesn’t need to go to the underwriter for further checks and can go directly to policy issuance. “Google Cloud has cut down the middle- and back-office work, leading to a 30% increase in the number of applications we can process in the same time span without the need for additional resources."

ICICI Prudential Life Insurance is also working with Searce to build deep learning models into Recognic so that it can overcome template barriers and input data from a variety of forms. This is particularly helpful for financial and medical documents underwriting because unlike a passport or driving license, financial documents have a higher structural complexity.

As customer data becomes more important in the work of ICICI Prudential Life Insurance, so does protecting it, and the company is taking every measure to safeguard the security and privacy of its customers’ information. “Details of customers' contactability are automatically removed by Google Cloud after processing is complete. This step in the workflow gives us the confidence that data is not stored at any level of the optical character recognition process," says Alpesh.

Partnering with the right teams for dedicated support

In achieving the best solution for its business goals, ICICI Prudential Life Insurance recognizes the importance of its decision to work with partners that truly understand the insurance business. "There are many intricacies involved in this business, and it’s clear that both Google Cloud and Searce really took the time to understand our underwriting processes before coming up with a solution," says Alpesh. He adds that during the implementation process, all findings were well documented and queries were responded to quickly.

"We didn't want to take any shortcuts deploying Recognic, but at the same time, we didn't want to draw out the implementation process. The excellent support from both Google Cloud and Searce throughout the journey was reassuring for us as they were always thinking ahead."

Future-proofing the organization through machine learning and AI

In the coming years, Alpesh foresees the insurance industry to be even more agile than it is today. "I doubt elaborate processes such as underwriting or operations checks will need to be done manually in the future. Everything will be done through machine learning and AI.” In light of this, ICICI Prudential Life Insurance is doing everything it can to prepare, as customers’ expectations are set to keep evolving. "We have to be prepared for the future, and I believe that with Google Cloud, we can do it.”

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Searce is a niche cloud consulting business with futuristic tech in its DNA, focused on “realizing the Next in the Now” for its clients. Specializing in cloud data engineering, AI/ML, and advanced cloud InfraTech such as Anthos and Kubernetes, Searce is one of the top partners for Google Cloud globally, with 3,000+ clients successfully moved to cloud.

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Infinity Life Insurance Company: Creating an Organization (A) Harvard Case Solution & Analysis

Home >> Management Case Studies >> Infinity Life Insurance Company: Creating an Organization (A)

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Infinity Life Insurance Company : Creating an Organization (A) Case Solution

Infinity Life Insurance Company was a joint endeavor in between 2 Indian public sector banks and a U.K.-based insurance company. The business started its affairs in November 2009, as the youngest entrant in the life insurance market in India. With the Indian federal government focusing on additional liberalization in the insurance sector, the joint endeavor required to be all set for the next leap.

This is just an excerpt. This case is about  ORGANIZATIONAL DEVELOPMENT

PUBLICATION DATE: November 17, 2016

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Life Insurance Case Study

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This is an ideal case study for students who are studying insurance or someone who likes to practice this type of topics to keep the learning updated.

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This is the English version of my 2017 textbook - Életbiztosítás, which was the second, revised and extended version of my 2003 textbook.

life insurance case study with solution

A comprehensive textbook of life insurance. Basis of the Corvinus University actuary course. This is the English version of the original publication, which was published originally in Hungarian. (see: http://bookline.hu/product/home!execute.action?_v=Banyar_Jozsef_Eletbiztositas&id=5505&type=22)

Life insurance - textbook Cover Page

Solvency appraising is analyzed by means of an appropriate deductive methodology, pointing out the connection to the time dynamic of the business. This research line is framed into a combined approach to solvency measuring, full of suggestions from a regulatory perspective. The model is exemplified in the case of a temporary life annuity cohort.

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The problem of this research is how to regulate investment-based life insurance in Indonesia and the liability of investment-based life insurance companies against the risk of default by policyholders. This study uses a research method that has an empirical juridical type. The study results explain that the regulation of investment-based life insurance in Indonesia is regulated in Law Number 40 of 2014 concerning Business Per Insurance, OJK Regulation Number 23/POJK.05/2015 concerning Insurance Products and Marketing and Decree of the Chairman of BPPM and Financial Institutions Number KEP-104/ BL/2006 concerning Investment-based life insurance products. PP Number 87 of 2019 concerning insurance companies in the form of joint ventures, RI's Financial Decree Number 422/KMK.06/2003 and Director General of Financial Institutions Decree Number 2475/LK concerning investment insurance products and forms of liability of default insurance companies must fulfill the contents of the agreem...

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The Life insurance industry has been the most important industry in India. This paper is an attempt to study the emerging scenario of life insurance business in the light of liberalization and entry of private players in the insurance sector. Monopoly of Life Insurance Corporation is over and now we have on scene a total of fourteen players with the market share being 76:24 approximately of LIC vs. other players in the industry. No doubt new entrants have done a good job in terms of life insurance business but it will be a difficult task for private players to move the customers away from LIC.

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The focus of this article is to present the modelling tehcniques used on international practice in the evaluation of right life premiums based. The knowledge and models obtained have a common element of mortality risk indicators but these are varied in different parts of the world. The common elements of these studies and models are generally based on a series of indicators which mainly point out their probability of survival and they are named the mortality indicators. These indicators represent the basis for the calculation of the premiums quotes and for the elaboration by the insurers of premium tables. The benefit for the policyholder is to obtain insurance at a fair and competitive price and for the insurer, to maintain the experience of its portfolio in line with mortality assumptions.

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life insurance case study with solution

Life Insurance

Protecting net interest income, the problem.

  • The client needed to protect net interest income while  guaranteeing returns 
  • Risks were hedged only against a single, most intuitive market scenario
  • Needed hedging strategies against a broad spectrum of adverse scenarios

THE SOLUTION

  • Straterix’s Reverse Scenario functionality was applied to the company’s asset and liability profile 
  • A full distribution of net interest income results was generated on a multitude of scenarios
  • All scenarios leading to adverse outcomes were analyzed

THE BUSINESS CASE

  • The company only had protection against a scenario with multiple defaults in their investment portfolio
  • The CRO needed to verify the strategy and determine whether additional actions were necessary

THE RESULTS

  • The company adjusted their hedging and re-investment strategy, based on  discovery of a full set of adverse scenarios,
  • In addition to better hedging coverage, the insurance company improved investment results

Success Stories

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Testimonial

Resolution Life Australasia Navigates its Digital Transformation Journey with Infosys

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CAA Partners With Infosys for Its Seamless and Innovative Digital Transformation

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Infosys Secures MS Amlin's digital transformation journey

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Success Story

a.s.r. Netherlands partners with Infosys for enhanced operational and business efficiencies

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Legacy Modernization for Leading Insurer

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Customized ServiceNow implementation by Infosys helps Swiss Reattain Enhanced IT Capabilities

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Claims Transformation Improves Productivity, Reduces Processing Time by 20%

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Infosys helped Reduce Cycle-Time to launch new services by 25%

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Self-Service Platform for Faster Time-To-Market and Enhanced Customer Satisfaction

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Enabling a 360 Degree Customer view Increases Servicing Efficiency

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Data-Masking Solution Lowers Risk, Reduces Costs for Leading Global Insurer

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Improved Efficiency and Significant Cost-Savings through Flexible Managed Services Model

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    district that pays a specified benefit. Based on a retirement age of six. y-five, she would receive $392 monthly. If Patricia predeceases Kevin, he would be entitled to 50 percent of her mont. ly benefits starting at age sixty-five. The school district provides $15,000 in group insurance coverage to Patricia, and s.

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  12. Pacific Life Case Study

    Pacific Life is a leading Fortune 500 life insurance and retirement solutions company in the United States with more than $200 billion in assets. The company, whose legacy dates back to 1868, provides life insurance, annuities, mutual funds and other investment products to individuals, businesses and pension plans.

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    Sutherland created a best-in-class service center staffed with a team of dedicated agents licensed in 49 states and the District of Columbia. These agents were specially recruited for this insurer and trained to understand the target customer. We also provided a technology-enabled, service solution with a single interface for all agent needs.

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    The insurance landscape in India has seen significant changes in recent years with the adoption of new technology. As one of the major insurance providers in the country, ICICI Prudential Life Insurance has aimed to lead in this transformation journey. "There has been a data explosion across India over the past few years, together with a high mobile penetration rate.

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