Renewal Strategies for Health Portfolios.

Jonathan Daniel

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 Contents

• Introduction
• Historical And Future Approaches
• Importance of Data & Analytics
• Capture Audience Attention
• Renewal questions we need to ask ourselves
• Key Takeaways & Steps
• How can we help?

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Introduction
• The renewal strategy of any company relies on its business plan for that financial
year and its short and long term goals. (ie Top Line, Bottom Line, Capital, Cash Flow,
Market Dynamics & Local Regulations)

• The key to a good renewal strategy is a portfolio based approach rather than a policy
wise approach. This is because the entire concept of insurance is based on cover for
uncertain events.

“The key components to be kept in mind for a successful

portfolio are keeping three key areas in mind managing of
capital, mitigation of risk & awareness of local regulations.”
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Historical And Future Approaches
Purely Technical

• Objective is maintaining a stable and profitable technical result over time (i.e Bottom Line).
• Consequences of being the owner of the bottom line will tend to generate friction with those
who are owners of the top line and lead to dealignment with organizational goals.
• Analyses, findings, and action plans will be focused on detecting any kind of trend or risks
that could affect the profitability of the portfolio and not on and top line learnings.

Technical & Sales

• Having an incentive on both Sales and Technical Result allows the Portfolio
Manager to have a more holistic approach in terms of portfolio analysis, focusing at
the same time in top line KPI's and business metrics such as the retention ratio,
new businesses , policy segmentation, and development of new products and sales
strategies.
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Importance of Data & Analytics
Portfolio Segmentation:

No of Policy Size Average Gross Average Net Burning Loss Technical

Members
Policies Band Size Premium Premium Cost Ratio Result
250 0 - 50 3,000 12 523 418 368 88% 150,480
300 51 - 150 24,000 80 447 380 388 102% - 182,400
175 151 - 400 52,500 300 542 304 286 94% 957,600
50 401 - 1000 25,000 500 431 371 359 97% 277,875
5 1000 + 30,000 6000 253 228 217 95% 342,000

• In todays world data places a crucial role in pricing and risk mitigation.
• Identifying providers with high utilization and cost influences the buying decision of
the TPA/ Insurer.
• Identifying in house vs broker accounts performance shows areas to concentrate on
in terms of sales strategy.
• Identifying performance by segment, age or sex allows pricing and sourcing better.
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Renewal questions we need to ask ourselves

• Size – Larger the accounts the more we need to rely on technical performance.
• IP Loss Ratio Vs OP Loss Ratio – Accounts with High IP Losses are better?
• Any IP losses that are non recurrent? – How much to remove?
• Average Cost & Utilization on Out Patient.
• Trend at the most utilized providers
• Losses of Endorsements vs members at Inception?
• Can we change benefits?
• Impact on overall if we renew at a higher Loss Ratio?
“There are no good or bad risks only adequately priced
and underwritten risks or inadequately priced risks with
bad or no underwriting.”

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Key Takeaways & Steps
The first step in building a good portfolio of renewals is to develop a clear strategy.
Strategy

Portfolio Manager The portfolio manager must be incentivized on both Top Line & Bottom Line.

Access to accurate data and ability to consolidate and view data.

Data

Aids in all aspects of the strategy by helping understand areas of growth correction
Analytics and purchasing.

Purchasing A key area in terms of how much the TPA is paid, inhouse sales, providers, volume
rebates, fast track payments etc.

Pricing of risk is a subset of all of the above and a critical component for both Top
Pricing
Line and bottom Line.

Renewing a policy is only half the battle making sure the portfolio is monitored,
Underwriting &
endorsements are underwritten and that portfolio is steered if needed are the
Monitoring
final steps needed to achieve organizational goals.

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 How can we help?
Primary objectives: Added value Services:

• Identify the client objectives & goals.
• Suggest the ideal reinsurance program to achieve
this.
• Complete placement with right reinsurer who shares
the goals of the client.
2- Technical and UW support:
• Reinsurance modeling and strategies
• Data Integration and BI reporting
support.
• Ongoing schemes and portfolio analysis / technical
overview:
 Burning cost , average claims cost, utilization
review, inflation, etc…
 Online claims access through TPA’s and online
technical dashboards
• Operational Support and consultancy.
• Technical and UW support.
• Account Management & Product development.
1- Operational Support and consultancy:
OP’s Support • Claims Management and cost containment
& • Audit (claims / Fraud and abuse)
Consultancy • TPA selection
• Discounts and Claims Savings (Direct & Indirect)
3- Account Management & Product
Development
Tech & UW
Account • Dedicated account manager locally based.
Support Management & • Consultancy and tech support
Product • Market intelligence (your eyes and ears)
Development • Assisting in developing new products and suggesting
ideas.

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Any Questions?

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