How Do We Use a Business or Regulatory Event to Improve Your Data Management and Innovation Strategy? - Chuck Mattson & James Brusseau

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CDO Conference 2019:
Using A Business or Regulatory
Event to Improve Your Data
Management & Innovation
Strategy
•
James Brusseau
Pace University
(Futurist)
Charles Mattson
Oracle - Insurance
(Pragmatist)
November, 2019

2. Business
Recap: Our
Understanding
Of Insurance
Overall Goals,
Problem,
Needs.
• Decentralized Structures (+)
• Specialized Niche Knowledge
• Concern for unforeseen risk
• Conservative balance sheets
• Strategic in Cycle Mgt
• Looking at new businesses
• Write as much good business
as possible.
• Slower growth/ selective
underwriting
• Focus on Retention/ maintain
disciplined underwriting
• Sacrifice volume for
profitability
• Capitalize on market
dislocations, create new units
for market turn
• Accelerate growth as price
adequacy returns
• Operate where knowledge
is competitive advantage
• Industries/economies w
strong margins
• Attractive Global Markets
So How?
Decentralization= Silos = Bad
#’s, Speed
Growth Pressure =
Aggressive Underwriting =
Data Quality
New Markets = Increased
Regulations & Competition.
More Complexity

3. Trends: Top Priorities
for Insurance CFO.
• Better Business Partner
• Performance Driven Culture
Based
• Better Analytics Looking
Forward
• Regulations
• Interest Rate Environment
• Tax & International

4. Trends: Top Priorities
for Insurance CFO—
Another View
• Performance Management
• Growth Strategy
• Process Optimization
• Cash Management
• Risk Management
• Organizational & Human
Capital
Source: PWC Survey-CFO-Priorities in 2018
1. Growth & Retention
2. Operational Efficiency
3. Legal & Reg
4. Talent
What Gets Budget?

5. Actuaries See/Acknowledge Problems But Keep
Taking On More Responsibility (Source: PWC)

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Insurance Analytics– Data Overlap In Each Area, @ Pace
Oracle Confidential – Internal/Restricted/Highly Restricted 6
Corporate Performance
Analysis
Summary
Quote Performance
Analysis
Policy Performance
Analysis
Claim Analysis
Performance
Overview
Line of Business Product Region Producer
Summary Key Facts Line of Business Region
Producer
Performance
Summary
Line of Business
Overview
Line of
Business
Performance
Product
Overview
Product
Performance
Key Facts
Claim
Handling
Line of Business Product CatastropheSummary
Product
Subject Areas Dashboards
Customer Central –
Retail
Customer Central- Retail Policy Central Retail
Customer Central –
Commercial
Customer Central- Commercial corporate Policy Central Commercial Corporate

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Insurance Departments Working off the Same Number: Breaking
Silos of Data and Automating Reconciliation for Data Accuracy
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Insurance
Data
Foundation
Pre-Built Insurance Data Model Analytics and Reporting
• Reliable and consistent
regulatory and operational
reporting.
• Reduction and/or
elimination of data silos
• Agility
• Data Quality
• Metadata Management
Pre-Built Reconciliation
• Ensures consistency between
financial (i.e. GL) and
analytical data
• Configurable reconciliation
between any source and
target dataset
• Maker/checker ability for
tracing manual adjustments
• Audit Trails & Lineage
• Automation

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IDEA: Customer 360/ Agent Efficiency Driven by Finance
• Understanding, communicating and building
relationships with customers has become paramount
in insurance
• It all starts with a customer 360
• On a shared date foundation, OFSAA provides
solutions for
– Customer/agent insight across the customer lifecycle
– Customer profitability and lifetime value
– Marketing efficiency optimization and profitability
– Enhancement of customer engagements across key products
– Enable successful and informed decisions
– Enable timely customer engagement
Confidential – Oracle Internal/Restricted/Highly Restricted 8
Concentric 360-degree views are the new clutch play

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• Finance & Back Office:
• Best Fit & Optimized Supplier Terms
• Reconciliations ****
• Anti Money Laundering, Fraud ****
• Policy Level Profitability ****
• Cash Mgt ****
• HR- Best fit candidates, On-Boarding
• Sales & Marketing:
• Connected audiences
• Optimized marketing orchestration
• Best sales action
• Dynamic pricing
• Next best offers recommendation
• Smart call points
• Automated answers
• Coordinated open time
• Claims Performance Monitoring
Oracle Confidential 9
• IT Operations:
• Autonomous database.
• Adaptive intelligence
• Intuitive search in enterprise

10. Polling:
On a scale of 1-10 which of the following do you think will impact new Growth,
Modernization, Regulatory, Human Capital Projects:
1.Data and source requirements will be hard to get to?
2 Actuarial Modeling requirements? Forecasting, Sensitivity analysts, historical and future?
3 End User Reporting requirements: Finance, Operations, Sales, Marketing, HR?
4 Transparency, traceability and auditability footnotes?
5 Business process and sequential timing of each step in the process?
6 Integrations with source systems?
7 Data Quality?
8 Data Governance?
How disparate are the data sources?
How many actuarial systems do you have? (Include Excel?
How much per year do you spend on actuarial related systems?
How many General Ledgers do you have?
How much per year do you spend on finance related systems?
How many data management software vendors do you have?
How many policy administration systems do you have?
How many claims administraton systems do you have?
How many billing engines do you have?
How many reporting or visualization tools do you use?
Do you have an modern insurance data model?

11. Appendix & Thank You:

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IDEA: Quote Monitoring/Coverage through Geography

13. IDEA: Better Cash Management

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IDEA: Policy Level Profitability & Policy Performance
• Trend Reports help in monitoring policy performance through time periods and help to track changes and have a deep dive into focus areas like
growth and attritions

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IDEA: Claims Performance Monitoring
• Claims dashboards allow to see how claims efficiency against key performance parameters, line of Business, Products, Producers and Regions
• Monitor impacts, extent of loss, damages due to a catastrophe on lines of businesses and products

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IDEA: Anti Money Laundering/ Financial Crime:
Transparent, Auditable and Effective Solution
Traceability & Audit
360 Degree View of Customer , Account ,
Transaction & Alert History with Audit log
in a single window
Effectiveness & Efficiency
User intuitive Dash Board outlining
effectiveness & Efficiency of transaction
monitoring , to reduce False positive
Scenario Transparency
Scenario Parameters & Configured values
are Visible with Complete Audit Trail

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IDEA: Prepayments and Behavior Modeling
Features:
• Use best practice prepayment models,
Create your own matrices, or Integrate with
Andrew Davidson (Adco LDM™) model.
• Tune customer behavior for prepayments,
price sensitivity and product selection to
economic circumstances
• Model indeterminate maturity products
with behavior patterns
Benefits:
• Accurately reflect how customer behavior
changes in different environments and the
influence to your bottom line
• Measure your exposures and test methods
of mitigating excessive risks
© 2012 Oracle Corporation – Proprietary and Confidential

18. Copyright © 2019 Oracle and/or its affiliates. All rights reserved. |
IDEA: Market Rate and Economic Scenarios
Features:
• Maintain economic assumptions separately to
quickly develop alternative forecasts
• Use exchange rate, interest rate, and economic
indices in creating forecasts
• Use industry best practice Term structure
models
Benefits:
• Stress testing the balance sheet under
alternative environments is an easy process to
execute
• The impact of all economic circumstances (not
just market rates) can be readily understood
• Use Term structure modeling to quickly and
easily develop thousands of alternative rate
paths
© 2012 Oracle Corporation – Proprietary and Confidential

19. Copyright © 2019 Oracle and/or its affiliates. All rights reserved. |
IDEA: Cash Flow Engine
Features:
• Generate customer relationship level cash flows
taking into account caps, floors, lags, discounts,
embedded options, and any other unique payment
or repricing characteristics
• Accurately model all financial instruments both on
and off the balance sheet
• Generate both liquidity and rate risk sensitivity and
mismatches
Benefits:
• Use all the contractual details of each individual
customer relationship to generate the most accurate
gap reports and forecasts as possible
• Sophisticated and exotic financial instruments are
modeled accurately and consistently with their
behavior
• Liquidity risk is measured consistently with market
risk exposures
© 2012 Oracle Corporation – Proprietary and Confidential