1.Fulfilling the evaluation on business development value (including expected value) for salesforce through building an intelligent model
According to the data of sales agents and policies they sold, China Life creates a relatively accurate and quantitative model to evaluate the value on business development. To make the model more accurate, underwriting experiences of life insurance industry are considered as well.
1) Big data analyzing
We utilize basic salesforce information (including gender, the date of entry, years since entry, rank, education background, etc.) and sold policies’ information (including basic sum assured, effective date, premium, payment term, policy status, age of the insured, occupation, gender, etc.) to analyze over one million segmentation of the data.
2) Creating target value
The value that sold policies brought to insurance companies over the whole contract period is referred as the target value. The value of each policy brought equals revenue minus its cost with accumulated value of sold policies as the total value. Then the policy value discounted to the observation point is being calculated by differentiated policy status, including surrendered policies, claims-made policies and in-force policies. The in-force policies' value calculation is consistent with the actuarial calculation method of present value. The future surrender and claim rate assumptions are calculated mainly referencing to the general experience results from the whole China insurance market.
3) Utilizing multiple modeling methods
The model was built by R, one of the most popular data modeling software. Multivariate analysis algorithm is applied to all sold policies in the past five years, with the value calculated in decreasing weight by 20% per year since last first to fifth year as target variables.
4) Validating the intelligent model
The model is validated by historical data, which confirms that predicted results are fitting well with original values.
2. Conducting differentiated underwriting and different rules based on rating results
According to assessment results of the intelligent model, insurance sales personnel are classified into three major tiers, which are stars, normal and enhanced underwriting control. This is used as an important reference for precise and targeting risk control. For those with high value contribution, ratings are further classified into 2-stars, 3-stars, 4-stars and 5-stars, their policies underwriting rules could be smoothly released. However, those sales personnel with low value contribution or negative value are rated as enhanced underwriting control, whose underwriting rules will be strengthened and may require additional risk assessments.
