BEIJING, Aug. 10, 2023 /PRNewswire/ -- Waterdrop Inc. ("Waterdrop", the "Company") (NYSE: WDH), a leading technology platform dedicated to insurance and healthcare service with a positive social impact, recently unveiled an innovative, digital intelligence-driven risk management approach at the 2023 Inslab Insurance Technology Festival in Wuzhen, Zhejiang province. The Company's Chief Actuary, Hui Teng, addressed the industry's current landscape and the necessity of comprehensive risk management for insurance products.
Mr. Teng stressed that while risk management might not be inherently complex, its intricate nature means traditional methods relying on manual screening are inadequate. He advocated for a comprehensive risk management perspective augmented by a systematic, digitally powered solution.
The traditional insurance risk management model faces challenges
The existing insurance risk management model confronts challenges amid an increase in specialized insurance plans for individuals with pre-existing conditions or specific diseases, which adds complexity to product offerings. The shift towards online sales and customer interactions has diversified insurance services delivery channels. This digital transformation has given rise to a surge in risks throughout the lifecycle of insurance products. Consequently, the traditional underwriting and risk control models may not adequately cater to this evolving landscape, which calls for a more robust and sophisticated approach to risk management.
Using underwriting as an illustration, Mr. Teng explained that current front-end underwriting technologies often prioritize risk mitigation through stringent conditions rather than precise risk identification for equitable product pricing. He underscored the interconnectedness of insurance services, where any disruption in one process can profoundly affect the customer experience. Therefore, a holistic risk management strategy is essential for insurance offerings.
Waterdrop categorizes risks into six main types: underwriting, arbitrage, claim fraud, customer experience, customer complaint, and service quality. The firm has engineered a comprehensive risk management solution leveraging digital intelligence technologies, showing a significant efficacy in bolstering business operations.
Waterdrop's full-process risk management solution for insurance products, powered by digital intelligence
Waterdrop's smart risk management solution encompasses the entire insurance process, from online transactions to claim services. It features 287 risk control features, capable of real-time user emotion and intention identification via a risk control model and relevant algorithms.
Additionally, Waterdrop has built an intelligent underwriting platform, a smart claims platform, a risk control strategy center, and a risk management platform, all facilitating risk prediction, grading, and prompt resolution.
Waterdrop's digital intelligence-based holistic risk management solution has achieved full coverage of insurance transactions and service scenarios, providing 100% coverage rate for service scenario risk monitoring. Over the past three months, it has successfully identified risks over 5.05 million times while underwriting 39 million policies. It exhibited 89% accuracy in anti-fraud claims modeling, with an average risk strategy execution time of just 7 milliseconds.
Mr. Teng noted that Waterdrop's solution could effectively screen high-risk customers, aiding cost control and loss reduction for insurer partners. It also fosters product supply side innovation through early risk management strategy implementation.
Waterdrop's digital intelligence-powered risk management approach provides a basis for product design and pricing, paving the way for the development and availability of more innovative insurance plans. For instance, Waterdrop launched the Waterdrop Blue Ocean critical illness product series, which does not require health declarations, making it the first of its kind in China. In June 2023, the Company also rolled out China's first million-yuan medical insurance policy, covering boron neutron capture therapy and other advanced medical treatments, in addition to the industry's first insurance coverage for relapsed leukemia.
Waterdrop has identified that excessive insurance risk largely stems from the lack of suitable insurance options for customers. The company's all-encompassing risk management solution delivers personalized recommendations based on customers' unique circumstances and needs, effectively preventing potential claim disputes. In the past month, Waterdrop's risk control model has provided insurance advice to over 20,000 customers with pre-existing conditions, achieving an accuracy rate of 99.7% in single scenario recommendations.
