SCOR | Velogica Extended Story
Who insures the insurers? SCOR is one of the largest reinsurers in the world, impacting our society and lives in ways we might be unaware of.
The global reinsurer’s raison d'être is to make protection affordable to as many people as possible, protecting them from risks they and their loved ones face in life. Whether it is a large-scale natural catastrophe or an individual tragedy, SCOR seeks to minimize the impact of these shocks for insurers and you: the end customer. There are many risks in life, and if you are affected, SCOR supports you to bounce back and carry on.
Overview
THE CHALLENGE
Massive amounts of personal health data are foundational to SCOR Velogica’s technology. The global reinsurer needed secure frameworks and processes to protect the end applicants and deliver the most accurate and cost-effective underwriting decisions for insurers.
THE SOLUTION
SCOR Velogica evaluates and adopts new technologies to adhere to the highest security standards to keep data secure and insurance affordable.
THE OUTCOME
SCOR’s Velogica rapidly and accurately automates underwriting decisions for insurers, ultimately impacting the experience of everyone involved in the insurance process: from the insurers to the underwriters to the end individual applicant. Leveraging automation and scale increases speed and lowers the cost of policy evaluation, allowing direct insurers to craft offerings to meet all market segments, including those previously underserved.
SCOR’S NEW STRATEGIC PLAN
"Half of the world lacks coverage for essential health services." - WHO
SCOR believes that making insurance affordable and accessible is a societal good, extending protection from risks to more people. Services offered through Velogica are an important part of SCOR’s strategy in making that happen.
Leveraging automation and scale increases speed and lowers the cost of policy evaluation, allowing direct insurers to craft offerings to meet all market segments, including those previously underserved.
“Having to start a GoFundMe account to care for loved ones after a loss just compounds tragedies. We want to expand coverage while driving down the costs, so everyone can get affordable insurance.”
Jeremy Campbell, VP of Technology at Velogica US
The Situation
Sensitive data is a necessary risk to increase protection
Velogica automates the underwriting decision-making process by collecting the evidence necessary to determine mortality risk, greatly decreasing time and resources for direct insurers. Thousands of applications are submitted daily, and as a result, Velogica handles massive amounts of sensitive personal data.
“With great power comes great responsibility."
SCOR and Velogica are committed to protecting their customers – and their customer’s customers – from risk, but sensitive personal data is required in underwriting for its high predictive value and impact on insurance affordability. A commitment to protecting customers means Velogica must meet the highest security standards to safeguard personal information. “Security and compliance are extremely important to us. We handle a tremendous amount of personal health information, and that is a big deal,” Jeremy emphasizes.
The Solution
Embrace Emerging Technologies to Achieve the Highest Security Standards
Velogica is a digital-first company and understands the need to be agile and customer-centric in a rapidly changing environment.
“We are an agile team and work collaboratively with our customers. We’re always looking for ways to innovate,” Jeremy says.
SCOR identified data security as paramount to its business strategy earlier than many competitors. Underwriting with applicant personal information is the heart of insurance; therefore, it was a top priority that Velogica demonstrated Service Organization Control (SOC) 2 Type II compliance, adhering to the strictest information security standards in the industry. In 2014, with the help of 2nd Watch, Velogica migrated 100% of its infrastructure into an AWS cloud environment to meet SOC 2 Type II criteria and principles of trust.
Recently, Jeremy’s team has been understanding the power and intricacies of artificial intelligence (AI) and machine learning (ML) models to assist with underwriting decisions. “It’s a very complex and rapidly evolving space because there are regulatory confines. As daunting as the changing landscape is, these are very valuable opportunities for models to make life insurance decisions.
The big focus is, ‘How can we use these models correctly?’ From a compliance perspective, you must ensure it is free from bias,” Jeremy explains.
The Results
Driving down costs to provide coverage for more people
Velogica underwriting is driven by a large library of risk factors, an understanding of predictive values for mortality, and custom rules and integrations developed with partners.
Secure and compliant
Due to it being a SOC 2 Type II-compliant platform operating 100% in an AWS environment, Velogica is able to process commercially available applicant data from multiple sources, like prescription drugs, motor vehicle records, medical test data, and others. Velogica applies the information it discovers along with information supplied by the applicant to its risk factors to provide a fully coherent picture of a person’s health that is quick, affordable, and accurate, lowering the cost of insurance for the end applicant.
Shorten the data cycle
Remember the days when someone had to visit you in person to gather your health history to provide you with a life insurance policy? This was an extensive process that could take several weeks on the insurer's side to collect evidence and determine your risk factors. Velogica leverages existing information to remove manual touches, reduce human resources, and increase speed. For example, instead of requiring a blood draw from an applicant, Velogica might automatically ingest lab results from a recent doctor visit. “Now what happens is the agent hits a button to send the information to Velogica, and we pull the data sources, analyze the information, and make recommendations to the direct insurer. In one minute, we’re able to do the whole process that used to take three to four weeks,” Jeremy says.
Drive down data orders
Data orders are a significant source of expenses in the underwriting process and can affect the cost of insurance. Velogica optimizes evidence requirements, so it can avoid unnecessary data orders for its customers to reduce their underwriting costs. Jeremy explains, “The data orders can be fairly expensive, and this is just during the evaluation process of the customer’s application. Between driving out human intervention and driving out unnecessary data orders, we really start to drive down insurance costs substantially.”
Spot more errors
Jeremy and his team are learning how to harness AI and ML models to spot errors that might be missed by traditional underwriting. Misrepresentation of data is common, and Velogica’s software can identify and flag or correct these errors. For example, a person might report their BMI to be 21, but with Velogica’s other data sources, insurers can determine the person’s BMI is actually 27. “Nothing drives down the cost of insurance like the accuracy of your predictions,” Jeremy says.
“Nothing drives down the cost of insurance like the accuracy of your predictions.”
Jeremy Campbell, VP of Technology at Velogica US
What is Next
Global Platform for Clients: Velogica’s proprietary and patented process maps certain types of data to specific risk factors, delivering the most accurate underwriting decisions at high speeds and low costs. This patented back-end system was the first and is still the best of its kind. The next step in Velogica’s evolution is becoming a global platform delivering front-end solutions to its clients.