Session 32 - Big Data Big Changes
How the World is Changing
.
. . creates confusion and opportunity
The hype…
Big Data - Volume, Velocity, and Variety
Analytics is the Key to Profitable Growth
Find Hidden Insight on Customers and Risks
Opportunity?
Connected Cars and Homes
: Telematics is creating new opportunities in auto insurance – and reflects a broader movement toward “connected consumers” and shifting customer expectationsWearables: ComputerWeekly.com Wearable technology to transform laggards in insurance industry. Karl Flinders Monday 11 May 2015
Opportunity?
Gamification in Insurance: Customer
Engagement and Beyond
Gamification could prove to be an effective capability for insurers, as exemplified by the Manulife/John Hancock vitality program
• Earn Points
• Increase your Status
• Get Rewarded
• Live Healthier
* Sources: “http://www.jhrewardslife.com/ and Manulife turns to fitness, rewarding customers for healthy habits JACQUELINE NELSON The Globe and Mail Published Sunday, May. 03 2015, 6:56 PM EDT
Fast Company:
23andMe Expands into Canada
October 2014In an announcement, 23andMe said Canadians will be privy to “108 health-related reports”, including “genetic risk factors for various health conditions, drug
response, trait reports, and inherited conditions”. Some 20,000 Canadians have already taken advantage of its services, which cost $199
Opportunity?
No genetic testing could mean
premium hike
HomeLife
By Donald Horne 28 July 2014
Opportunity?
Fitch: Cyber Insurance is Key Growth Opportunity for Global
(Re)Insurance
Increased Number of Attacks: Since 2010 there has been an increase of cyber attacks across the globe. Despite company efforts, these attacks continue. Companies agree that they need to change the way they defend against and recover from cyber attacks.
Increased Sophistication of Attacks: Attacks are going beyond the easy “smash & grab” of credit cards and are increasing in persistence and sophistication such as trade front running, IP theft, M&A and other data.
Rising Costs: It used to be that a cyber breach would cost only the company remediation but now the costs are increasing with the average cost $6.75 million*.
Increased System and Device Connectivity: Companies IT infrastructure continues to extend beyond the walls of their data center. With Bring Your Own Device, business partnerships, mobile and cloud proliferation, data is increasingly exposed to higher risks.
Underdeveloped Cybersecurity Workforce: With the increase in sophistication of attacks and expanded device connectivity, finding and retaining a capable cybersecurity person is difficult, thereby creating wage inflation.
* Sources: “Ponemon Institute: Second Annual Cost of Cyber Crime Study Benchmark Study of U.S. Companies," Ponemon Institute, August 2011; “HP Research: Cybercrime Costs Rise Nearly 40 Percent, Attack Frequency Doubles," HP, October 2012; “Threats Impacting the Nation,” U.S. Government Accountability Office, April 2012; Fortune 500, 2012; “Costs to Reach Improved and Ideal Cybersecurity Levels By Industry”, Bloomberg, 2013; "Forecast: Information Security Worldwide, 2010-2016, 3Q12 Update”, Gartner, 2012; “Federal Information Technology Market, 2012 – 2017," Deltek, August 2012;
The Advanced Analytics Journey -
Realizing value by
integrating advanced analytics in business decisions
Hindsight Insight Foresight
Integrated Intelligent Interactions
Data Information Knowledge Insight Foresight
Busi nes s Im pac t
Information and Analytics Use
T ac ti c al S tr ate gi c Transactional Reporting Query, Ad Hoc Reporting Advanced Analysis Performance Management Integrated Advanced Analytics Capability Map
Foresight…
With an advanced analytics predictive model, scored results provide an instant look at the quality of your business scored by your model.Case Study 1 –
Integrating advanced analytics in
managing a commercial P&C insurance book of business
Scoring of the block of business can be done on a number of dimensions, bringing a range of
internal and external data sources together for deeper
External Data Sources
-
Companies who are succeeding
in advanced analytics are continuing to explore new data
Expanding
Range of
Data
Suppliers
Economic Real Estate Equities Commodities Interest Rates Foreign Exchange Inflation Economic/Bus. trends Demographic Age Gender Ethnicity Income Immigration Data Financial Credit ScoreGross/Total Debt Service Ratio Credit Ratings Geographic Crime Statistics Climate Data Geographic Mapping Population Concentration National indices Wage Data Wealth/Net Worth Unemployment Stats Aggregate CRA Data
Health Diabetes Cancer Cardiovascular Disability Injury Depression/Mental Behaviors/Lifestyle
Physical Activity Level Hobbies
Lifestyle Clusters Social Values Purchase Property Spend by Category
Medical & Drugs
Disability Data Nursing Home Data Hospital Visit Statistics Prescription Drug Usage Other suppliers
Firmographics
Industry Location Structure
Growth and Investment Competition
Predictive Model Development –
New techniques
are being applied by insurance companies
A variety of Predictive Model Development techniques are available and which present different tradeoffs. In addition, multiple models can be used in
complementary and additive ways.
Common Techniques
Generalized Linear Models
Classification and Regression
Trees
Predictive Models and External Data Sources
in Real-Time Decision Making
Companies driving greatest value are applying advanced analytics in
Real-Time Decision Making
User-input Enrichment
Sales and Service Enhancement
UW and Pricing Sophistication
Optimize underwriting and pricing by
deriving insights
from internal and external
data and real-time decision support models
Enhanced ability to service and sell to
customers
through real-time anticipation of
customer need and to increase lifetime value
Improve the Customer’s Experience
by
reducing the number of user-inputs
Case Study 2 –
Real-time analytics in banking
Case Study 2
–
Extended to insurance
Rules Builder Modelling Manager Decision Engine Whitebox Score
LEARN (A) PREDICT (B) ACT (C) EXPLAIN (D)
• Build from existing conversion or new business rules
• Develop learning models that adapt to changing buyer behaviours and learn from preferences • Reduce intuitive decisions and develop standardized approaches that can be applied with increased granularity • Communicate outcomes and develop new opportunities
The Advanced Analytics Journey –
Real-time
decisioning for innovation and business value
Hindsight Insight Foresight
Real-Time Integrated Intelligent Interactions
Data Information Knowledge and Insight Foresight
Busi nes s Im pac t
Information and Analytics Use
T ac ti c al S tr ate gi c Transactional Reporting Query, Ad Hoc Reporting Advanced Analysis Performance Management Capability Map
