Paperless Processes from Underwriting to Claims Management

Transcription

1 Paperless Processes from Underwriting to Claims Management Bertus Kruger ABSA Insurance Company

2 CONTENTS 1. Introduction of South Africa and ABSA 2. Background to Agricultural Crop Insurance in South Africa a. Named Peril Insurance Underwriting and loss adjusting Problems encountered b. Multi Peril Insurance Underwriting and loss adjusting Problems encountered 3. Development of new technology driven underwriting and assessing process by Absa a. Process mapping b. Establishment of Geo referenced farm database linked to producers c. New on-line underwriting d. Applications for Named Peril Insurance e. Applications for Multi Peril Insurance 4. Conclusions 2

3 Introduction of South Africa and ABSA Geographical Information on South Africa 3

4 South Africa South Africa is located at the Southern most tip of Africa 4

5 South Africa Magisterial districts South Africa is sub divided into many districts 5

6 South Africa Farm Boundaries Individual farms are registered within the different districts 6

7 Agriculture in South Africa 1. Current number of farming units a. Total number of Commercial Farming Units : approximately Hectares under field crops : ha ( 1 hectare equals acres). Number of farming units: Hectares under mixed farming : ha. Number of farming units : Hectares under horticulture : Hectares under forestry : Hectares utilized for animal production : b. Number of Small scale (emerging) farmers : Major Field crops planted Maize : 60% Sunflower : 13% Wheat : 13% Soya beans : 9% 7

8 Introducing ABSA 1. Largest share holder is Barclays Bank, UK 2. Largest commercial bank in South Africa. Also largest bank of the agricultural sector Number of farming unit bank accounts 3. Absa has re-established its focus on the agricultural market over the past number of years 4. This lead to the establishment of a bank assurance model which also specialises in agricultural production insurance, with a strong emphases on crop insurance 5. Absa own registered insurance company (AIC) 6. Acquired a crop insurance underwriting agency 6 years ago 7. Has grown to become one the leading crop insurers in South Africa, insurers Absa clients as well as other clients and financial insitutions 8

9 Background to Agricultural Crop Insurance in South Africa Named Peril Crop Insurance in South Africa First crop insurance pool scheme founded in 1929 First guaranteed insurance in 1950 s At first only offered hail cover Now offers cover against: Hail, fire, transit on all crops Frost and excessive rain (in harvesting time) on selected crops Over 300 points of sale by different individual agents Loss assessed by in house trained part time assessors Continuous research on effect of hail damage done by certain crop insurers No government participation Multi Peril Crop Insurance in South Africa In the1960 s offered Comprehensive insurance. Target market : Commercial farmer Yield potential per individual land determined. Guarantee 65%/land Created awareness of scientific farming practices among farmers Government subsidized 25% of premium Scheme ceased in early 1980 s. To expensive In early 1990 s started multi peril insurance in current format No government participation 9

10 Named Peril Insurance Problems encountered UNDERWRITING Premium rates determined per district. District only way of determining location of farm District boundaries not accurate parameter of risk. May vary within a district. Farmers in lower risk areas within district do not insure. (See image hail day frequency indicating risk) Difficult to determine geographical spread of risk Back dating of policy acceptance signature, date and time or withholding policies until damage occurs LOSS ADJUSTING Only have hard copies of farm maps, indicating insured lands. It can happen that incorrect land is assessed. (see image of hard cop map) Difficult to determine if sampling was done accurately Assessors cost difficult to manage 10

11 Multi Peril Insurance Problems encountered UNDERWRITING Although we capture GPS co-ordinates of farms on admin system. Can not verify exact location of farm Area of insured lands difficult to verify Difficult to determine geographical spread of risk LOSS ADJUSTING Only have hard copies of farm maps, indicating insured lands. Difficult to monitor progress of crop and to do yield estimates. Needed to reserve for possible claims. (See image of patchy maize land) Difficult to determine if sampling was done accurately. Representative sample should be harvested Assessors cost difficult to manage 11

12 Development of new technology driven underwriting and assessing process Process mapping policy issuing FNOL Preliminary policy Emergence report Final policy Assessment process Approve and pay claim 12

13 Establishment of Geo referenced farm database linked to producers Utilize existing delineated farm info. This is also linked the deed of sale to identify owner Individual lands on farm also delineated and permanently numbered Capturing of all relevant info of farmer linked to a specific farm Farmer can also access database with password for other applications Universal database within Absa group. Can be used for operational planning, financing, insurance etc.. 13

14 New underwriting system Agri Production System (APS) a online on-time quoting and u/w system Implementation of changes in u/w philosophy and rates as and when required and is immediately operational Audit tracking of quote requests and policy issuing The exact location of the farm is known and can therefore be underwritten more accurately Identify problem areas and implement corrective measures Geographical spread of risk can be displayed visually Areas to be penetrated can be identified Compare assessed damage of neighboring lands to verify correctness Early warning system aimed at proactive actions 14

15 Valuations 15

16 Insurance 16

17 Fields 17

18 Strategy New insurance product Cross-sell to insurance Joint marketing Cross-sell to bank 18

19 Application for Named Peril Insurance Premium rates no longer specified within district borders. Exact location of farm known Policy issuing on site retrieve on-line quote, present to client, sign policy on the electronic device, bound policy on system Assessment procedures loaded onto electronic devices i.e. i-pads, tablets, smart phones Loss adjustment better controlled GPS co-ordinates of lands on i-pad GPS co-ordinate of sample position captured. Stratification of samples visible on land map. Sample position photographed Assessment readings captured electronically. Damage calculated electronically Completed and signed assessment sent to head office by Assessment costs managed as time and distance traveled captured on i-pad 19

20 Image of farm indicating lands to be assessed Image of electronic assessment with GPS co-ordinates Image indicating stratification of samples Image of completed electronic assessment 20

21 Application for Multi Peril Insurance Exact location of farm known. Can evaluate against historical NDVI (Normalized Difference Vegetation Index) information Monitor crop emergence and capture sample sites electronically Spatially monitor crop progress with satellite NDVI images Low level NDVI photography of problem areas Estimate yield by assessor at specified localities Extrapolate estimated yield of land and further of farm as a whole Estimate potential yield and claim reservation more accurately Identify possible moral risks (uninsured risks) Actual harvested yield verified accurately. Sample area captured on i-pad Assessment readings captured electronically Completed assessment sent to head office by 21

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25 Actual Yield assessment Sample harvested and track of harvester captured on i-pad Image of area harvested 25

26 Actual Yield assessment Assessment verification Taksasie API Area: Versekerde: Plaas: Taksasie Datum: 07 Mei 2013 Gewas: Wit Mielies Oppervlakte (ha) Taksasie B/lengte (m): 34, Taksasie B/lengte (m): 34, Stroper/Ry wydte (m) 7.28 Rekenaar B/lengte (m): 34, Area gestroop (ha) % B/lengte Afwyking: 0.11% % Land Oppv Getakseer 9.69% IDENT LAT LONG ALTITUDE LTIME LENGTH Track /05/07 09:10: Track /05/07 09:12: Track /05/07 09:15: Track /05/07 09:18: Track /05/07 09:23: Track /05/07 09:29: Track /05/07 09:36: Track /05/07 09:43: Track /05/07 09:49: Track /05/07 09:57: Track /05/07 10:02: Track /05/07 10:06:

27 Image of farm indicating lands to be assessed Image of low level Infrared and NDVI image Assessors yield estimates Estimated yield per land 27

28 Identify moral or uninsured risks Yield anomaly not really visible on normal photo Yield anomaly visible on NDVI image 28

29 Conclusions On-line on-time electronic applications can assist in better underwriting Positively identify risk location Accurate risk evaluation Rate risk appropriately Implementation of rate changes and/or Manage accumulation/spread of risk Incorporating of i-pads improves assessment efficiency and effectiveness Remote sensing can be incorporated into yield assessments to: Better estimate potential future claims Better assess actual yields Better estimate national yields in partnership with Government Early warning and near real time monitoring now possible 29

30 Paperless Processes from Underwriting to Claims Management Bertus Kruger ABSA Insurance Company