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Preface
This report is a preliminary analysis about the possibilities of the Health
Insurance current underwriting process of ING Chile. Computerization plans
are already made and the first implementations will occur at the end of the
year.
During this three month project we worked at the ING head office in Santiago
for the operations division.
We would like to thank Francisco Javier Lopez and Jaime Ignacio Avila who
helped us a lot during our project and did their upper best to understand and
improve our Spanish.
Also we would like to thank Professor Alexander Verbraeck for helping us out
with some problems we encountered during our project.
We had a wonderful time here during our stay, learned a lot about how ING
really operates in Chile and got acquainted with how the underwriting
process is being done.
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Table of contents
Preface........................................................................................................2
Table of contents...........................................................................................3
Executive summary.......................................................................................5
Resumen ejecutivo (Castellano)......................................................................7
Current underwriting.................................................................. .......9
1.Project description......................................................................................9
General outline..........................................................................................9
Our share in this project.............................................................................9
2.Conceptualization.....................................................................................11
Process and product line...........................................................................11
Process orientated description...................................................................11
Object description....................................................................................12
Interaction-flow diagram...........................................................................12
Assumptions............................................................................................12
3.Specification............................................................................................13
Reducing the conceptual model..................................................................13
Performance-indicators.............................................................................13
Data acquisition.......................................................................................14
Process times..........................................................................................14
Decisions in the subscription process..........................................................14
Routing times..........................................................................................14
Distributions data-input............................................................................14
4.Set-up ....................................................................................................16
Treatment...............................................................................................16
Warm up period.......................................................................................16
Replication length ...................................................................................16
Number of replications..............................................................................17
5.Verification..............................................................................................18
Input variable..........................................................................................18
System variables.....................................................................................18
Output variables......................................................................................18
6.Validation ...............................................................................................19
End of the month boom............................................................................19
7.Results simulation model...........................................................................21
Future underwriting......................................... ...............................22
8.Computerization options............................................................................22
Evaluation module....................................................................................22
Business Rules Engine..............................................................................22
Digitalize all the paperwork within the Sales division....................................22
Interaction with client...............................................................................23
Agent with iPAQ....................................................................................23
Client comes at the front desk................................................................23
Web based application ..........................................................................23
9.Options and results...................................................................................25
Evaluation module....................................................................................25
Business Rule Engine................................................................................25
Sales digital............................................................................................26
10.Scenario analysis....................................................................................28
Interactions.........................................................................................28
External variables.................................................................................29
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Executive summary
At the operations division of ING Chile a research is conducted towards
digitalization possibilities within the underwriting process. The analysis
focuses on the subscription process of the Healthcare product division, but
could, because of many similarities, be useful for other product divisions as
well.
The first two options do not really show promising results for the utilization of
resources, but can have many advantages in for example data storage and
rules management. Besides, these options are a first step towards further
and more elaborate digitalization. Clearly the last one, that includes the first
two options and inhibits a vast intervention within the whole process, shows
a large decrease at the utilization of resources and a much smaller average
subscription time. As well the effects on data storage are big, this is of great
help in processes inside and outside this analysis.
Two more options are part of the scenario analysis, which assumes all of the
previous options implemented. Besides the digitalization (including EM and
BRE) of processes, the ING-client interactions within the process can happen
on different ways. These interactions can now happen digitally, with an agent
using an iPAQ, type of handheld computer, connected to a server at ING, or
by the client logging on to a website. These technological possibilities are
examined differently in three scenarios. The configuration of these scenarios
depend on three external variables, which are the use of internet, the value
of personal contact between agent and client and the acceptance of digital
agreements by the government.
Technological possibilities, such as EM, BRE, websites and iPAQs, allow ING
change their processes radically and make more efficient use of the
resources. The company can make a lot more money by internally digitalizing
certain processes and manage their data flows differently. Externally some
processes, such as agent-client interaction, can also be changed, but are as
well dependent on the described external variables. The effects of the
technological possibilities are described per different future situation. In the
best scenario, when things as digital signing and storage are accepted,
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clients act independently of agents and the subscription is merely done over
the internet (80%), the number of resources needed decreases with almost
one-third and the average subscription time is halved. The client can do
his/her application within half an hour, without intervention of any resource.
Implement the Evaluation Module and Business Rule Engine, but keep in
mind that these standalone features will not bring big changes. They
should be seen as a step towards a more digitally enhanced system.
Conduct a better research (with more validated data) to create an
improved model of the current situation. Arena is a good option to
simulate the business process.
Start scenario analyses for the following subjects:
o Technological possibilities
o Governmental changes
o Marketing in the field of client’s needs.
Do cost-benefit analyses for the technological possibilities.
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En resumen, ING puede hacer las siguientes acciones para crear un proceso
de suscripción más eficiente y más clara:
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Current underwriting
1. Project description
General outline
A few years ago ING Chile incorporated a big competitor within the insurance
business. Between 2000 and now, a lot of efforts were made to reshape
processes, marketing strategies and the organization itself into one clear
insurance company. Nowadays, ING is the biggest competitor in Chile
regarding the insurance business with more and more clients who appeal for
a new or different insurance.
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In the next two chapters the whole conceptualization and specification are
taken into consideration. This is followed by the configuration of the
simulation, together with its verification and validation. The last chapter of
this part deals with the results of the simulation model. The part that follows
after this deals with future underwriting, where different possibilities are
being described and simulated. The results of these simulations will be
judged and summed up in the conclusions and recommendations.
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2. Conceptualization
In the conceptualization a conceptual model of the underwriting process will
be written. The demarcation describes the processes and parts that will be
left out and which part of the problem description will be focused on. Because
there are a lot of different processes, resources and variables that are part of
the system, some techniques were used to list all the different aspects of the
entire process.
After a short description of the area where the analysis will focus on a
process orientated and object orientated description will be used to map the
process in further detail.
Everything but the insignificant parts of the process that falls between the
initial request, either by call of insurance agent or client that visits client, and
the rejection or acceptation of the policy, will be handled in this report. All
the elements within it, the processes and resources, will be part of the
analysis of future alternatives.
The whole process is divided into two parts, because of efficiency and clarity
reasons, which are linked subsequently. Both parts are of the same process
and should not be seen as separate processes.
When a request is not rejected several documents are filled out and signed
by the client. It then, after a check whether the request is not due, flows
back into he sales department for digitalization. The requests that are due
(enter after a certain date) are handled manually at control production. After
a notification of the employer the request is signed and either approved or
not. If the request is not approved, the client has to hand over the legal
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Object description
This part regards the conceptualization of the different objects that are
elements in the system. These objects have attributes, and describing these
objects provides a clear input for the model. The objects can be passive or
active and sometimes have actions. They are classified into different object
classes. The list of objects can be found in Appendix 3.
Interaction-flow diagram
Using the previous analysis a better overview of all the processes, the flows
and the interactions can be made. After numerous round-the-table
conversations with experts, consultations, questions and feedback, a fairly
realistic interaction-flow diagram is made. It describes the flows of requests
and the interactions between different resources and clients and can be
found in appendices 4 and 5. The diagram shows (all) the processes in the
right sequence, the flows, feedback flows and decisions. It will serve,
together with the obtained data (specification, next chapter), as primary
input for the simulation.
Assumptions
Not all of the obtained information is useful when making a simulation, some
aspects have to be simplified. This is necessary to make the model as clear
as possible, which has a lot of advantages when adjusting it to for example
future situations. Only insignificant parts and variables within the system are
left out in order to create a simple and realistic representation. Besides
simplifying the situation, it is sometimes necessary to do some assumptions,
when things are not clear or information is lacking. This is, just as the rest of
the conceptualization, an ongoing process. These assumptions and
demarcations are to be found in Appendix 6.
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3. Specification
The conceptual model, as described in the previous chapter, with all the
described elements, objects and processes, provides a good overview of the
problem situation. Nonetheless, no numbers or data have been assigned to
it, leaving it an empty overview. In this chapter the formulated concepts are
being simplified and data will be assigned to them.
One very important object reduction regards the request. In this analysis the
most important element is the request. This request is the only thing that
flows through the system. Neither clients, nor agents will be part of a flow,
only of processes. In reality the request can exist of different copies and
forms, but in this analysis the request is the only entity and encapsulates all
these possible kinds of forms, such as FUN, notification or declaration.
Furthermore the time that will be analyzed regards only working days.
Therefore the weekends are left out for the simulation, just as the non-
working hours. Only the lunch break has been taken into account. A day
counts 10 hours, of which a normal lunch break takes 1,5 hours. Hence, a
simulation week is 50 hours.
Several of the processes discussed with experts have been integrated into
one process. This happens with processes that are subsequent, done by the
same resource and dependent of the same elements. That means that for
none of the integrated processes is subject to a new element, such as an
interaction with a client or another input.
Performance-indicators
Before we can judge the outcomes of the model that will be made or
compare results later on between different scenarios, it is necessary to
formulate some performance-indicators. These have been formulated in
consultation with ING. The following performance-indicators will be used:
Utilization resources:
Sales Agent
Sales Manager
Front desk employee
Controller ‘Technical Analysis’
Controller ‘Control Production’
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Data acquisition
Data are obtained by consulting several experts within the company. If
information was lacking, other departments of the company were consulted,
such as the planification department, where data is processed and measured.
Therefore, a significant part of the obtained data can be seen as expert
assessments or measured data from planification. Because almost all the
information flows ran through two analysts1, there is not much information
about the specific origins of the data.
Process times
The first things to be examined are the process times and the resources
doing the processes. The following resources are involved in the process:
98 Sales managers
579 Sales agents
50 Front office employees
40 Service assistants
5 Controllers (Control Production)
3 Controllers (Technical Analysis)
All the process times for each individual process have been listed per
resource, including its reprocess times, in appendix 7.
Routing times
Within the subscription process there are several interactions between
different parties. These interactions encompass time for sending and
receiving information/ documents and visiting clients. Besides routing times,
delays can be determined. These delays include for example the time it takes
for a client to collect extra medical background or it takes for an employer to
judge a notification. Specific information about all the routings and delays
can be found in Appendix 9.
Distributions data-input
There are two different data-inputs in this system. One is the sales agents
1
Jaime ‘Tony’ Ignacio Avila, jaime.avila@ing.cl and Francisco ‘Pancho’ Javier Lopez,
francisco.lopez@ing.cl
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who call potential clients if they are interested and make an appointment to
visit them. The other one is when a client enters a building of ING and
requests a policy at the front desk.
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4. Set-up
After conceptualizing the situation and specifying the corresponding data a
simulation model of the situation has been built. This simulation model has to
be checked on whether it provides the right output, on the correctness of the
model logic and on its resemblance with reality. Before that, the model
characteristics itself, such as the running period and numbers of replications,
have to be calculated in order to avoid fluctuating outcomes.
Treatment
Before the model can be verified or validated, its characteristics have to be
calculated. At first the difference between an ending and a non-ending
system has to be identified. An ending system is a system that has a definite
start and end. This system is assumed a non-ending system, since we look at
the whole subscription procedure. There are several ending systems within
the whole system, such as the first subscription process at the front desk,
that ends every day, but as a whole the system is identified as a non-ending
one. This has certain implications for the run treatment. Three things have
been taken into account with the run treatment:
1Warm up period
2Replication length
3Number of replications
Warm up period
The warm-up period has to do with the fact that a non-ending system does
not start with zero entities in it. Therefore for a while entities have to flow
through the system, until all important processes and parameters are
stabilized and the flow in more or less equals the flow out, called a steady-
state. From that moment on the variables in the model are calculated, so
that the initial values don’t significantly influence the outcomes. The warm up
period is set on 1000 hours, which is 100 (simulation) days, after which
every process is stabilized, such as Control Production and the total
subscription time.
Replication length
The replication length regards the simulation time after the warm up period.
Defining this parameter depends on the variables where we are interested in.
Of the variables where we are interested in enough data has to be generated
to make accurate conclusions. There exists no interest in very rare occasions
of requests that flow through a certain process a couple of times, has errors
and needs a notification to the employer. These requests exist, but are not
important in this context. Purpose is to describe the largest part of requests
that flow through the system, we do not focus on special flows.
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Rule for determining the replication length is to multiply the cycle with the
longest average with 3. In this case the replication length is will be the three
times the average time it takes for a request to be sent through the system.
For average requests it takes between 110 and 120 hours to get round, or 11
or 12 working days. The replication length will be set on 42 days, which is
approximately 2 months.
Number of replications
The calculation of the number of replications is done by means of the results
of previous replications. The results of these previous replications and the
calculation of the number of replication can be found in appendix 10. The
number of replications is set one 1.
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5. Verification
In the verification phase the variables in the model and the model structure
are checked. Not the consistency with reality is checked, but the translation
from the conceptualization and specification to simulation model. First the
input variable will be checked, then the model-logic and finally the output
variables. The output data have been calculated before the setup and
originate from a simulation with the following features: 1 replication with
warm-up period of 30 days and replication length 200 days.
Input variable
The simulation itself only has one input, which is the number of clients that
request a policy each day. The average number of clients that enter the office
is 346 per hour. After two replications, the results of the input were
converted to number of clients per hour and are listed below.
System variables
Besides the input variables there are numerous system variables to be
checked, as well numerous ways to do this. Using logic and a bit of math the
system variables have been checked on consistency. Big differences between
expected and calculated values have been examined and explained. This part
of the verification can be found in Appendix 11.
Output variables
Finally the output variables are checked in order to complete the verification.
After a warm-up period, when the process is in a steady-state, the number of
requests that enter the system should be equal to the number that leaves
the process. The results of two runs are listed in the table below.
In Out Difference
Run1 58472 58290 -0.31%
Run2 58424 58419 -0.01%
Table 2 - Verification output
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6. Validation
A validation is done to see whether the model represents reality on the most
important variables. There are different possibilities to validate a model.
After a thorough walk-through with experts, in which the model logic as well
as the outputs have been brought to attention, the simulation is validated
and can be used to give conclusions about the present situation. It is ready
to be used for alteration and implementing possible alternatives, helping in
giving insight in probable situations in the future.
Agents have to make a certain amount of sales per month otherwise they do
not get their bonus. The bonus is not raised if the agents make more sales.
The result of this is that the sales agents will not submit a significant part of
the requests until the end of the period in which they have to submit their
quota. They save requests for agents that made too few sales in the end of
the period, hence cover each others back. Because of this, in the end of the
period, the final week of the month, the number of requests flowing into the
rest of the system is about twice as much as in the previous weeks. The first
three weeks about 33% of the requests are hold back by the agents and
released the final week.
The effect on the average utilization is nil, because the same amount of
requests flow through the processes. The average subscription time increases
rapidly, compared to the original results, with about 20%. The results will not
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be taken into account in the analysis of future underwriting, for two reasons:
Especially the first reason is important, because without sufficient data and
knowledge about the exact procedures, it is very hard to estimate the real
influence of it. It can have a significant effect on the way the simulation is set
up as well, which makes the results even less valid. Nonetheless it is
important to mention the possible effects of this system.
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The following table shows the distribution of the initial selling of policies.
Most of it is done by agents calling clients and a small percentage by clients
visiting an ING office.
From now on, only the performance indicators will be mentioned. These are
the most important variables, chosen by ING, which demonstrate how well
certain alternatives or scenarios can be. The following results are calculated
by the simulation model.
The utilization of the manager and front desk employee are quite low. This is
very plausible, because most of the processes of these resources are outside
of the system boundaries, like helping clients with questions by front office
employees or having a meeting by the manager.
There is not much to say about these results, because they are more or less
nothing new. These results will be used as benchmark values for the
scenarios described in the next chapter. The outcomes of each different
scenario do not have to predict the future precisely, but the differences in
outcomes of the variables (with the benchmark values) demonstrate quite
accurate the potential of a certain alternative.
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Future underwriting
In the future ING will make some big changes in the current underwriting
process, which is described in the previous part. This part of the report can
be considered as the most important part, because it focuses on these
changes. As said, ING is interested in the outcomes of possibilities that will
announce in the future or are already bound to be implemented. Before the
end of this year, a so called ´Evaluation module (EM)´ (Módulo de Evaluador)
will be implemented. The Business Rules Engine project (BRE) will run
simultaneously with the implementation of the evaluation module. At the
moment, it is not known exactly when the implementation of BRE will take
place, but it will take at least one year. This part of the report serves to
explain these (and other) possibilities, and present the results. In the first 2
chapter of this part, chapter 8, the different possibilities will be described and
subsequently in chapter 9 scenarios will be created using these possibilities.
The last chapters will deal with the results for each of the different scenarios
and the recommendations.
8. Computerization options
The following part explains the possibilities in digitalizing the underwriting
process in more detail. The options are put in a specific order, which roughly
show the digital advancements. In appendices 13 until 16 are the specific
processes that change for each option, including the different assumptions
that have been done regarding the digitalization.
Evaluation module
At the end of the year 2005 ING is going to implement a program to
computerize some decisions within the underwriting process and reduce the
manual activity for executing these. This program is called ‘Evaluation
module’ (Módulo de Evaluador) and is part of the general BRE. Because it
could be interesting to observe the influence of the evaluation module
exclusively and because it is to be implemented pretty soon, it is analyzed as
a separate option. The Evaluation Module (EM) will digitalize between 50 and
70% of the first categorization processes.
communication with the client will still be done with the necessary
paperwork, because otherwise some other changes have to be made, which
will be discussed later.
Interaction with client
We have seen different degrees of digitalization, ending with the most
advanced alternative, i.e. the digitalization of all processes within the sales
department. Still, this option can be extended even more with newer ways of
communication with clients. These newer ways of communication will
enhance the speed of transaction even more and will improve data storage.
All the previous changes in the processes are assumed implemented in order
to make these ways of communication possible.
2
An IPAQ is a handheld computer and is chosen by ING as an example.
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In this last option a different solution is being proposed for the interaction
between agents and clients. The idea is to launch a website where clients can
request a policy. This can obviously be done at home and there is no need for
a agent to visit the client or for the client to go to ING. The rest of the
process can be done by an agent using an iPAQ or client using the internet.
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The results of the current situation are shown in every table. The different
options will be judged by comparing their respective results with these. In
this chapter the first three digitalization options will be analyzed separately,
the following chapter will bring the analysis of all the options within certain
possible future scenarios.
Evaluation module
As explained earlier, the evaluation module is a digitalization alternative that
is to be implemented very soon. This alternative will be implemented as a
separate solution at first, and later it will be part of the more elaborate
digitalization alternatives.
The results of the Evaluation Module, only a small change in the whole
subscription process, because it only partly affects two small processes, show
a small impact on the performance indicators.
The Evaluation Module regards two small processes done by the Sales
manager. These processes confiscate only a few minutes of his time. As
expected, the module will bring only a slight relieve for the manager, 1 %,
corresponding with 1 manager fewer needed for these processes. The effect
on other variables is negligible, due to the very small time profits. With
regards to the subscription time or the utilization of the resources, this
alternative will not have a very positive influence.
Sales digital
This influential alternative is already very advanced and can’t be
implemented within a short time. But because it is technologically possible, it
can be very interesting to look at the results of a large solution as this one.
As said in the previous chapter, the paperwork within the sales division is
replaced with software and digitalized information. Many of the flows and
processes remain the same, because the interaction with the client happens
as before, with the necessary paperwork. This situation can be seen as a
transition phase, where later on the following scenarios can complete the
technical environment.
Before we analyze the future situations first the results of this alternative will
be presented, because this semi-digital process is pretty much independent
of regulatory advancements as digital signing and all legal documents remain
the same. After this, the alternatives which need regulatory changes, will be
discussed and analyzed.
The results of this intervention are clearly much larger than the previous
digitalization alternatives. First of all the average subscription time for
accepted requests decreases with more than 30% to average 8 working
days, which is almost 2 weeks. Since there are much less processes for the
resources to be done, unsurprisingly their utilization rates have shrunk.
There are no people needed for control production, because the process it
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totally digital. The other resources still belong to the subscription process,
but their utilization is lower than before. This can be translated into a
decrease of resources, as can be seen in the table.
Next to the results shown in the table, there are huge profits in data storage,
because almost all the information is stored digitally, which makes it much
easier (and faster!) accessible and a lot less space-consuming.
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10.Scenario analysis
This chapter will deal with all the possible digitalization options, which will be
implemented differently depending of the properties of each scenario. First is
explained how the scenarios are obtained, then the scenarios and the results
are written down and finally these results are judged.
Interactions
The following scenarios will represent a technologically possible and realistic
future for the subscription process at ING. Apart from the previous
digitalization, some other possibilities are implemented in this scenario,
which deal with the client interaction. There are three ways of interactions
possible:
At the front desk, with a front desk employee helping the client with the
subscription.
At the client’s house, with an agent, equipped with iPAQ, who takes
information in digital format. Besides some brochures and possible
background information, there will be no paperwork involved.
The client using his or her internet connection to do a request, to accept
restrictions or to make a (restricted) agreement.
Finally there is of course the agent calling the client to sell a policy, but this is
not named above, because it regards only selling and not really an
information exchange.
The scenarios that will be analyzed will represent situations where all of
these possible interactions are present, but with different percentages.
Identified are four different moments of interaction:
Initial
selling of a policy, can happen in three different ways:
o Agent calling a client and visiting afterwards.
o Client visiting an office and buying a policy there.
o Client visiting ING website and subscribe there without help of any
resource.
Signing restrictions, three different ways:
o Agent visits client, or still is at client (depending on complexity
request) with an iPAQ digital signing.
o Client, still at the office, gets the restrictions from the front desk
employee.
o Client, still behind the computer, accepts (or not) the restrictions
online.
Deliver background
o This is still done manually, because it regards official medical
documents, which the agent has to digitalize at the office.
Sign documents, this is the signing of the restricted contract, which can
be done in three different ways:
o Agent, possibly still at client, lets the client sign digitally with iPAQ
o Client, still at front desk, signs electronically.
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A structural method has been used to define the three most important
external variables, which can be found in appendix 18. The results of this
short analysis are the following three external variables:
1. Personal contact
Personal contact is a strong value for ING nowadays. Interaction between
client and sales agent will always happen with the same sales agent. The
client will be able to build up a more personal relation with ING in this way. It
also is common-knowledge that elderly people prefer a more personal
contact with a company. However these things can change. For instance, if
we look at the Netherlands, things are already quite different. A lot of people
like to decide things on their own, they do not like to be bothered or rushed
by some sales agent who selling a policy.
This external variable takes a possible change in attitude of clients into
consideration. This variable considers a preference for personal contact, like
now or even stronger, or the opposite, a more independent client, who
prefers to decide on its own and does not need personal contact with any
representative of a company.
2. Use of Internet
This is a very general development that can be and already is, of very high
importance to the business industry. The development of internet use has
already developed itself tremendously and is still far from what can be
realized. With the likelihood of the increase in Internet use in our mind, the
future scenarios have to adopt this external variable as well. Increase in
Internet use, but also Internet-related software, will lead to a lot of new
opportunities to do business and sell policies.
Use of Internet
+
Acceptance digital
agreements
- +
Personal contact
+
-
There are many different possibilities thinkable, but of course just a few will
be analyzed. For every interaction moment, for instance, there is a certain
percentage for each possibility (iPAQ, Internet, Front desk) within this
moment. For example the initial signing, we could assume that 10% happens
at the office, 30% over the internet and the rest on the old-fashioned way of
calling a client and visiting. These initial percentages have of course influence
on the other chosen percentages. The percentage of clients that use internet
to accept restrictions will be less than the original percentage, because not
every request is accepted.
The following scenarios regarding these interactions have been written. For
the Evaluation module a percentage of 70% is taken and for the Business
Rule Engine a percentage of 80%.
This scenario excludes the possibility of a total application via the Internet,
because of problems with the legal system regarding digital legal
agreements. Therefore the main focus lies on the Agent who, in contrary to
the current situation, carries an iPAQ and visits the clients.
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The initial request is done partly by clients visiting the front desk and partly
by agents selling policies by phone. These internet applications regard only
applications in this scenario, no follow-up actions as sign restrictions or
documents can be done in this way. Agents with iPAQs are still needed to do
these processes. Of course, if the client is at the front desk for an application
and the request is simple (it does not need any manual interference and is
processed digitally within a few seconds) these processes are done by the
front desk employee. If the request is complex and needs manual processing,
the client leaves and will be visited by an agent later on.
This scenario is chosen from the perspective that legal arrangements still
cannot be done over the internet. Because of this, the signing of the
documents, the agent is still needed. The agent plays as well a significant
and more personal role in building relations with clients.
From the point of view that regulators move slowly with regards to changes,
another important assumption is made within this context. The client still
receives a contract at contract signing, which has to be picked up by the
agent, when the request is not approved later on in the process. For the
other scenarios is assumed that the client will only receive information about
the policy, this will not have legal value.
The following values have been taken for the initial way of selling a policy. As
can be seen only a small part of the agents work of selling has been taken
over by people (clients) using the internet.
The results of this scenario, of which internet is used only to do the initial
request, most of the processes are digitalized and agents use iPAQs for client
interactions, are in the table below. In this table and also the following tables
are results shown of reductions in resource utilizations and eventually in a
difference in how many resources are needed in the future situation. Some
resources (sales agents and controllers) are therefore not necessary
anymore. But for the other ones (front desk employee and sales managers)
this means only that this amount of resources is not necessary for the
underwriting process of the health insurances, but that they are necessary
for other work. The underwriting process of the health insurances for the
front desk employees and the sales managers is only a part of their total
work. This has to be kept in mind when looking at the results.
3
As said before, this part of the initial selling of a policy only regards the application.
Further possibilities of interaction between a client and a sales agent (sign
restrictions, documents…) are not incorporated in this future scenario.
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The average subscription time in this scenario has been halved, the time now
until a request has been accepted and send by mail. For the resources the
implications are even bigger. As seen before, there is no need anymore for
Control production in a digital environment as this one is. This change, and
other changes that already have been discussed, will not be handled again in
this scenario analysis, only new things will be dealt with. At the resources the
biggest changes occur at the utilizations of agent and manager, which
decrease dramatically. In this scenario and with the described automation
computerizations implemented, the process can be done with a lot less of
these resources (in total about 135 less).
This scenario is pretty much like the first one, except for the clients that
apply through internet. These will finish their application, and possibly accept
restrictions, in the same way, except of course when the request is complex
and needs manual analysis. If a simple request, there is no need anymore for
an agent to interfere in this process. However, still a large part of the
requests will be done by the agents in this scenario. The main focus of this
scenario is the level of personal contact. Because of less interest in personal
contact the Internet option to apply for a policy becomes more attractive.
Because the Internet application will lead to fewer resources needed, ING
could give a slight discount for example to clients who choose for Internet
applying instead of the other options. Therefore their share in this scenario is
much larger.
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Chile – University of Technology 26 May 2005
The results for this option, with a significant part of the processes being
taken over by the clients themselves, are in the following table.
For this scenario you would expect a smaller average subscription time,
because the application time through internet is much smaller than the agent
visiting clients. Still there is not much difference between the scenarios. This
is because assumed is that the agents immediately go to the client for a
request, instead of making an appointment, which can take weeks. The time
of a client doing an application over the internet is just a little smaller than
one through the ‘traditional’ way, with an agent.
The only big difference is again in the resources, this time the utilization of
the agents shrinks even more, as you would expect. Because more people
taking over processes that are usually done by agents and agents do not
have to visit clients that often anymore, 159 agents less are needed. The use
of internet increases day by day and in the following scenario a large role will
be allocated to this upcoming and promising medium, which can cause even
a smaller need for agents.
Scenario 3 – ING.CL
Use Internet +1
Acceptance digital agreements +1
Personal contact -1
This scenario is chosen from the point of view that most of the agent’s work
can be done by the client itself. A clear and fast website has to make sure
that without any problems future clients can finish their application and do
their request fast and easy. For clients there will be advantages of doing it
over the internet, such as the freedom of canceling at any moment (which
could be disadvantageous for ING) and the possibility to do the request at
any time. Applying over the internet can be a disadvantage as well for clients
who need help in filling out the forms.
Applications over the internet are of course much cheaper for ING than
applications which have agents involved. Therefore clients who do everything
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over the internet, have lower initial costs and could be awarded for this with
for example a discount (same as in the second scenario). The value of
internet applications will be dealt with below in the results. This scenario will
have twice as much internet applications as the previous, so an easy
comparison can be made.
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Chile – University of Technology 26 May 2005
11.Summary results
This chapter will be handling the most important results from the previous
two chapters. First an overview of the most options and scenarios can be
seen in table 14.
Of every option and scenario, the most relevant results are explained in the
table below. In italic under every option/scenario the performance indicator is
written on which the option/scenario has effect.
Option/scenario Results
Evaluation Module The Evaluation Module shows little effect on any of the
performance indicators.
BRE The Business Rule engine itself cannot bring much
change in process times or resource utilities (except for
- Controller Technical Analysis) either, but it has a lot of possibilities
Technical Analysis for future applications. Besides, it brings all the
advantages of the option itself, such as better and
faster analysis, easier and better Rule management etc.
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Sales department This option is not realizable within a short time. Many
digital processes have to change in order to create a digital
environment like this. The profits that can be gained
- agents, managers, with this opportunity one the other hand, are great too,
control production with a much smaller amount of resources needed (40
- subscription time agents, 12 managers and 5 controllers CP less). As well
the average subscription time decreases with 36 hours,
which is about 4 working days.
Scenario 1 In this scenario, where the sales agent still plays an
important part, the digitalization has focused not only
- agents on the processes within the Sales Department, but also
- subscription time on the interaction with clients. Part of the initial
subscription is done over the internet now and all the
client-agent interactions happen with an iPAQ, which is
connected to an ING-server. Because of a significant
smaller travel time (less visits), the subscription time
and the number of agents needed shrink again.
Scenario 2 In this scenario more people do all their subscription
interactions over the internet. Obviously less agents are
- agents then necessary, because some of the processes itself
are being taken over by the clients themselves and the
clients do not have to be visited by agents. This causes
another big drop in the utilization of agents.
Scenario 3 This final scenario doubles the amount of subscribers
over the internet and the role of the agent his of less
- agents importance. The expected result of an enormous
decrease of needed agents happens and a bit more than
half of the agents of the current situation are needed.
The influence on the average subscription time does not
change that much within the different scenarios, all
around 60 hours (6 working days). The client can do an
application over the internet in half an hour.
Table 15 - Results overview options and scenarios
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The systems that will be implemented within a few years are the
Evaluation Module and Business Rule Engine. Except for an improved data
storage and rules management system, these digitalization options will
not have a big effect on the resources in the subscription process, neither
on the average subscription time.
A much broader digitalization of the Sales division, including EM and BRE,
has more effect, but needs investments and a lot of analysis. This option
will bring large effects, not only on the average subscription time, but also
on the resources. The process will get faster and will be done more
efficiently. The data storage and rules management are as well improved,
which has many positive side-effects.
Technological possibilities and several external variables have been used
to generate scenarios. With a progressive government the possibilities for
subscription through internet are the best, as well are the benefits in
number of resources needed and the average subscription time. A client
can do a request solo and within half an hour over the internet. Agents
visit clients equipped with iPAQs connected to an ING-server. Paperwork
belongs to the past. With a less progressive government and less people
on the internet, the profits gained by digitalizing every possible thing are
still great.
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