Assessment $2-$ Case Study Group Analysis $(10\%).$

Case Study Background and History

Ensure to Insure $($ETI$)$ is a leading insurance company that provides a range of insurance plans in the healthcare, building, marine, and aviation sectors to its $25$ million globally dispersed customer base. The company consists of a workforce of around $5,000$ employees and generates annual revenue of more than $350,000,000$ USD.

ETI started its life as an exclusive health insurance provider $50$ years ago. As a result of multiple acquisitions over the past $30$ years, ETI has extended its services to include property and casualty insurance plans in the building, marine, and aviation sectors$.$ Each of its four sectors is comprised of a core team of specialized and experienced agents who generate the company's revenue by selling insurance policies.

Some of the key departments within ETI include the underwriting, claims settlement, customer care, legal, marketing, human resource, accounting, and IT departments. Both prospective and existing customers generally contact ETI's customer care department via telephone, although contact via email and social media has increased exponentially over the past few years. ETI strives to distinguish itself by providing competitive policies and premium customer service that does not end once a policy has been sold. Its management believes that doing so helps to achieve increased levels of customer acquisition and retention.

Business Goals and Obstacles

Over the past few decades, the company's profitability has been in decline. A committee comprised of senior managers was formed to investigate and make recommendations. The committee's findings revealed that the main reason behind the company's deteriorating financial position is the increased number of fraudulent claims and the associated payments being made against them. These findings showed that the fraud committed has become complex and hard to detect because fraudsters have become more sophisticated and organized. Apart from incurring direct monetary loss, the costs related to the processing of fraudulent claims result in indirect loss.

The committee pointed out that the frequency with which the existing regulations change, and new regulations are introduced has recently increased. The company has unfortunately been slow to respond and has not been able to ensure full and continuous compliance. Due to these shortcomings, ETI has had to pay heavy fines. The committee noted that yet another reason behind the company's poor financial performance is that insurance plans are created, and policies are underwritten without a thorough risk assessment. This has led to incorrect premiums being set and more payouts being made than anticipated. Based on the committee's findings, the following strategic goals are set by ETI's directors:

Decrease losses by $($a$)$ improving risk evaluation and maximizing risk mitigation, which applies to both the creation of insurance plans and when new applications are screened at the time of issuing a policy, $($b$)$ implementing a proactive catastrophe management system that decreases the number of potential claims resulting from a calamity and $($c$)$ detecting fraudulent claims.

Decrease customer defection and improve customer retention with $($a$)$ speedy settlement of claims and $($b$)$ personalized and competitive policies based on individual circumstances rather than demographic generalization alone.

Always achieve and maintain full regulatory compliance by employing enhanced risk management techniques that can better predict risks, because the majority of regulations require accurate knowledge of risks in order to ensure compliance.

After consulting with its IT team, the committee recommended the adoption of a data$-$driven strategy with enhanced analytics to be applied across multiple business functions in such a way that different business processes consider relevant internal and external data. In this way, decisions can be based on evidence rather than on experience and intuition alone.