Use Cases

We support insurance companies in their data-based business management. The following use cases illustrate our expertise in the prediction and assessment of risks.

Predicting future disease risks

Predicting the occurrence of common illnesses using Predictive Modelling

The health insurance business is characterized by a high frequency of claims. In Germany and many other countries, these claims are submitted with named medical conditions and ICD codes for the conditions. Thus, for the insurers in these countries a lot of data and information about each individual’s health history is available within the claims data. On the basis of a broad data base of anonymized German health claims data, RISK-CONSULTING predicted the occurrence and progression of different diseases such as severe back pain, heart diseases, depression etc. To do this, RISK-CONSULTING used several methods of Predictive Modelling such as Neuronal Networks, Generalized Additive Models and tree-based methods.

The prediction of the occurrence of widespread illnesses in individuals supports the new customer-centric approach of leading health insurers. Identifying the insured persons who have an increased risk of developing certain diseases enables the insurer to suggest suitable prevention measures and helps the insureds to live a healthier life.
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Pricing in personal accident insurance

Evaluation of cover extensions and improved impairment tables

Because of strong competition, the product scope in personal accident insurance in Germany is constantly increasingly. In particular, accident insurance now provides a wide range of coverage extensions beyond the classical definition of accidents, for example for selected infectious diseases or accidents caused by impaired consciousness. Improved impairment tables are also offered.

RISK-CONSULTING has evaluated various coverage enhancements and improvements in impairment tables for several insurers. For this analysis, accidents identified in a large, anonymized database of private health insurance claims were also used. In this way, insights were made possible that could not have been achieved solely with data from accident insurance. The effect of ageing in connection with coverage extensions could also be quantified.

On this basis, new, improved products with actuarial soundly calculated contributions could be offered to the insureds.
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Tarifierung in der privaten Unfallversicherung
Dynamic Underwriting in der Lebens- und Krankenversicherung

Dynamic Underwriting in Life and Health Insurance

Combining AktuarMed® and CDE®

Why do applicants have to answer dozens of medical questions during an application, wait days or weeks for a reply and often need to answer even more questions, or supply reports from their medical practitioners? RISK-CONSULTING has developed a new approach in which the applicant is led through an interactive digital question dialogue where no unnecessary questions are asked, and an immediate underwriting decision is generated. Big Data and advanced Data Analytics allow the optimisation of the process and the generation of underwriting decisions based on hundreds of millions of years of medical evidence, far more than a human underwriter can ever access. The new process is not designed to eliminate human underwriting completely, but it will mean that underwriters only need to look at applications which really merit their intervention. Thus, the insurer is able to deliver a binding quote including policy documentation in only minutes for more than 90% of the applications.

The first step of collecting the medical history of the applicant is performed by RISK-CONSULTING’s award-winning tool for context-sensitive diagnosis exploration CDE®. CDE® then passes the application data to RISK-CONSULTING’s evidence-based underwriting system AktuarMed® which performs the risk assessment.
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Predictive models for property and casualty insurance

Claims expectancy, lapses and cross-selling

In property and casualty insurance, the range of premiums from line to line, but also from company to company within the same line, is very large. This range is only partly due to different cost levels, but above all to the respective assessment of the risk structure of the portfolio by the insurer.

Detailed knowledge and assessment of the existing and possible future risks and opportunities are indispensable for the effective management of a property and casualty portfolio. RISK-CONSULTING has analysed the portfolios of different lines such as motor vehicle, residential building, household contents or liability insurance for several insurance companies in Germany. Individualized predictions for claims expectancy, lapse risk and cross-selling potential of customers were created.

On this basis, customer relationships could be strengthened, contributions were adjusted in line with the risk, and premium increases on a broad basis were avoided.
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Alternative Schätzung von Spätschäden

Second Opinion on IBNR-Reserves

Improved estimate of long-tail claims

In products with a large proportion of long-tail claims, such as property damage liability insurance, the calculation of the necessary reserve poses a particular challenge. In the relevant sources, and often also at the insurer itself, there is no valid data basis for this, in particular on ultimate loss ratios and development patterns.

RISK-CONSULTING was commissioned to investigate the adequacy of an insurer’s IBNR reserves and to develop proposals to improve the reserving methodology. RISK-CONSULTING set up a specific quota growth procedure for this purpose. With this, the ultimate loss ratios of the individual occurrence years were estimated on the basis of the insurer’s data on the one hand and on the basis of market data on the other. The results obtained in this way were brought together by means of a credibility procedure. This also enabled the insurer to predict the date on which the insurer can assess ultimate loss ratios solely on the basis of its own data.

Based on these results, the insurer was able to make the claims reserving more risk-oriented and to adjust its reserving strategy accordingly.
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Additional services for the electronic health record

AktuarCompress® in connection with health platforms

Understanding one’s own state of health is the basis for a healthier and self-determined life. With electronic personal health records (EHR / EPR), a person’s own health data is meanwhile digitally available in many countries. However, it is often difficult for the insured person to identify his or her essential illnesses and, in particular, the personal risks involved.

To solve this problem, RISK-CONSULTING has developed an application which summarizes the electronic data on his or her illnesses and treatments and enables the insured person to have a structured and easy-to-understand overview of his individual medical history. Additional benchmarks also allow the person to compare his or her health status with that of others.

In addition, the individual long-term health risks as well as the short-term risk of certain serious diseases (diabetes, heart attack, depression, etc.) are determined. This enables the insurance company to provide personalised support and prevention services to the insured persons and to help them to avoid possible secondary diseases and chronification.
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AktuarCompress® für einen Überblick über die individuelle Krankheitshistorie
Aktuarielle Bewertung von Erkrankungen und Organschäden

Product development: Functional disability

Actuarial assessment of diseases and organ damage

The functional disability products provide protection against the financial consequences of accidents and serious illnesses.

RISK-CONSULTING has developed its own product concept for this product category and has derived the actuarial assumptions to calculate the individual product components: accident, organ impairment, cancers, loss of basic skills, need for care and an emergency lump-sum payment. Particular attention was paid to the overlapping of the individual product components and their clean demarcation. In addition to the actuarial expertise of RISK-CONSULTING, this also required specific expertise in medical statistics.

Our cross-disciplinary know-how also enabled us to provide comprehensive support in all actuarial matters to the accident insurance company during the introduction of this product. The product has been successful in the German market for several years.
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Automation of renewals and product changes

Combining AktuarMed® and AktuarCompress®

In products with annual renewals, the insurer often takes the claims of the insured person into account when underwriting the policy renewal. The same applies when an insured person wishes to change from one insurance product to a different one with additional benefits. The determination of the state of health often takes place manually or only partially automated. The underwriters are obliged to search through extensive claims records and extract the relevant medical conditions. This is hardly manageable under the given conditions and is time-consuming and costly.

To solve this problem, RISK-CONSULTING has developed AktuarCompress®, a tool that automatically analyses the entire claims history of an insured person and identifies the relevant conditions. AktuarCompress® can operate in any country where the claims data contains the treated conditions and a systematic coding system. All diagnoses associated with a disease are summarised and represented by a case-related “leading” diagnosis. Unclear or inaccurate diagnoses are resolved in this process, unimportant and non-plausible or incorrect data is filtered out.

The combination of AktuarCompress® and RISK-CONSULTING’s evidence-based underwriting system AktuarMed® enables more than 90% of renewals and product changes to be automatically processed. Several major insurers in Germany have been successfully using the tool to automate product changes since 2016.
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Automatisierung des Umstellungsgeschäftes