In an industry not often noted for innovation, COVID-19 has proven that insurers can rapidly innovate to help businesses and consumers manage risks and protect against losses. For example, insurers quickly added benefits for COVID-19 critical illnesses and waived member cost sharing for diagnostic testing related to COVID-19. In addition to COVID-19, other significant changes, such as technological advances and healthcare reform, have fostered innovation in life and health insurance products.
Innovative products and services enable insurers to respond to client needs in new ways that competitors have not considered or been able to provide. However, innovation may be viewed as disruptive in the heavily regulated insurance industry, and regulators charged with protecting consumers might be concerned with ideas that are untested. Even when regulators are convinced that an innovative insurance product or service would greatly benefit a consumer population, they might be constrained by regulatory limitations.
In this article, Milliman consultant Stacy Koron explains why a principles-based approach to insurance industry regulations may be a more effective way to foster innovation.
Milliman is pleased to announce that the firm has won three 2020 InsuranceERM Americas Awards for its insurtech products and risk consulting services. The goal of the IERM Americas Awards is to highlight enterprise risk management leaders in the Americas.
In the technology category, Milliman’s Nodal™ was named “Analytics Solution of the Year” while Milliman’s Arius Enterprise® won “Cloud Technology of the Year.” Awards in these categories recognize insurtech solutions that enable strategic decision-making and provide risk insights that can improve efficiency and operations for (re)insurers. For instance Nodal, Milliman’s predictive modelling platform for early claim intervention, uses machine learning to comb through unstructured data and identify high-risk claims, and has helped clients reduce claims severity by 15% and overall losses by 41%. Meanwhile, Milliman’s Arius, one of the industry’s most comprehensive reserve analysis solutions, has saved clients hundreds of hours per year while simultaneously improving analyses and governance over data and processes.
Milliman was also recognized with a 2020 InsuranceERM Americas Award for its risk consulting services, with three members of the firm’s Chicago Life ERM practice taking home “Risk Team of the Year.” Anthony Dardis, Ariel Weis, and Chloe Lau have, combined, over 60 years’ experience on both the assets and liabilities sides of life insurance, and are well-known for their benchmarking capabilities and “practical-first” approach to risk management.
“Transformation in the insurance industry begins by leveraging new technologies in conjunction with the latest data and expert analysis, three areas in which Milliman excels,” says Milliman President and CEO Steve White. “Managing complex risks requires both the best expertise and the most innovative tools, so we feel gratified to have won IERM Americas Awards for both our risk consulting and technology solutions.”
For more information on Milliman’s insurtech products, including Nodal and Arius, click here. For more information on Milliman’s enterprise risk management solutions, click here.
With many states remaining under stay-at-home advisement, liability attorneys have delayed various in-person actions, including depositions. A review of a Milliman database of defense attorney invoices allows this delay to be quantified.
For example, attorneys attended 80% fewer depositions in the second half of March, contributing to an overall reduction in attorney fees of 6% to 7% for the month. By the end of April, however, attorneys had become more comfortable with virtual depositions, allowing them to attend 20% more depositions.
To read more about how depositions were affected by the COVID-19 pandemic, read this article by Milliman’s Susan Forray, Chad Karls, and Joseph Mawhinney.
The coronavirus pandemic has affected the insurance industry in many ways. However, it may ultimately accelerate actuarial innovation and technology. In this episode of the Society of Actuaries’ (SOA) Research Insights podcast, Milliman’s Pat Renzi discusses some of the short- and long-term effects of COVID-19 on the insurance industry and its digital transformation with the SOA’s Dale Hall.
An unexpected issue faced by property & casualty insurers during the COVID-19 pandemic has been premium refunds to policyholders – especially on personal auto policies.
The refunds and rebates are justified by substantial reductions in auto claims and losses because people have driven less as a result of being sheltered at home, and as stores and restaurants have remained closed or with restricted operations.
Beginning in late March, shortly after stay-at-home orders were widely imposed nationwide, many insurers began voluntarily paying partial premium refunds to personal auto policyholders. In addition, some state insurance commissioners have mandated auto premium refunds because of the reduction in miles driven. In addition, where permitted, some companies have begun offering discounts on renewal premiums to reflect the current better-than-expected loss experience instead of or in addition to refunds on current policies.
In this article, Milliman’s Susan Forray and Eric Krafcheck discuss actuarial considerations for premium refunds. They also provide perspective on the tax treatment of premium refunds from the standpoints of insurers and policyholders.
Foley & Lardner’s Richard Riley, Jr., also contributed to this article.
In recent Consultation Papers, the EIOPA proposed an alternative calibration of the Standard Formula mortality and longevity stresses. In this paper, Milliman’s Alexandre Boumezoued proposes two alternative and complementary views to the EIOPA’s final technical set of advice on the mortality and longevity shock calibration: a prospective approach in the spirit of one-year calculations and a retrospective analysis based on historical data from corrected mortality tables.