“We are extremely satisfied with ACL and with the ongoing results we have achieved. By developing automated tests using ACL technology, we have gained a greater understanding of how to effectively manage the claims review process. We continue to rely on ACL to streamline and improve our audit processes.”
Kenneth Wong, Supervisor, Internal Audit Department, John Hancock Life Insurance (Malaysia) Berhad
The internal audit department at John Hancock Life Insurance (Malaysia) Berhad handles a large volume of insurance claims with highly detailed files. The audit team needed a quick and easy-to-use tool to enhance its annual claims review process. John Hancock auditors chose ACL technology to develop a fully automated, user-friendly application to compare claims data from separate computer platforms, generate exception reports, and select samples for further testing. The result? Greater productivity, fewer errors, and a streamlined application that takes only five minutes from start to finish.
John Hancock Life Insurance (Malaysia) Berhad offers a broad range of life insurance products, including comprehensive medical and education plans, investment-linked options, and business and personal packages. Established in 1963 and based in Kuala Lumpur, the company employs over 2,300 people in 61 branches and agency offices, and holds assets exceeding £273 million. The company has been listed on the Kuala Lumpur Stock Exchange’s Main Board since 1984.
John Hancock uses market-leading ACL software to verify claims data from the AS/400 insurance system, and to summarise and sample that data for further analysis.
The John Hancock internal audit team needed an automated tool to improve the speed and reliability of its annual claims review procedure. The claims process includes recording the intimation of loss, verifying details, determining the extent of liabilities, estimating the settlement total, settling claims, and obtaining recoveries from reinsurance. The annual claims review is broken down into two key parts.
First, auditors must ensure claims data from the AS/400 insurance system is properly transferred to the accounting system. Second, the team must summarise claims data from the insurance system and select samples for further testing. The company wanted an automated way to identify types and extent of losses, the required provisions, and accounting and financial reporting requirements.
With previous systems, users required high-level technical knowledge to analyse multiple records files generated by the insurance and accounting systems. John Hancock needed an audit tool that would decrease the possibility of errors and give users greater flexibility and confidence in their results.
The internal audit department developed a fully automated ACL application to tackle the two-part challenge of its claims review process. Using ACL, the team automatically defines report files downloaded from both the insurance and accounting systems, then compares the files for consistency. The results are quickly summarised and, if required, exception reports are generated.
For the second stage, John Hancock developed an interactive sampling module that enables auditors to extract specific data samples for further analysis. Users can specify the sample size, seed value, and choose to include the five highest and/or lowest values. With ACL, data sampling and analysis procedures that used to require time-consuming manual intervention now take (on average) less than five minutes to complete – including the generation of exception reports and data exports.
This new application gives the team greater flexibility and power over its audit data, reduces errors, and boosts productivity through considerable time savings.
As a final step, the auditors have created a desktop shortcut to the new ACL application. “Now,” says Kenneth Wong, internal audit department supervisor, “a fully streamlined claims analysis approach is just a mouse click away.”
The John Hancock audit team uses ACL’s market-leading technology to: