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Data Analytics in Insurance

An InView prepared by The Digital Insurer.

Data Analytics in Insurance

  1. 1. Opportunity Use Cases Initiatives
  2. 2. Data & Analytics Opportunities Analytics Trends Improve Outcomes Worldwide revenues for big data and business analytics will grow from nearly $122 billion in 2015 to more than $187 billion in 2019 -IDC More than 50% of large global enterprises will leverage analytics and proprietary algorithms on secure platforms -Gartner Source : http://www.infosys.com/industries/insurance/white-papers/Documents/transforming-big-data-analytics.pdf Source : http://www.mckinsey.com/industries/financial-services/our-insights/unleashing-the-value-of-advanced-analytics-in-insurance Success FrameworkTransformation Opportunities
  3. 3. 3 360 Degree View of Customer Optimize Claims & Fraud Mitigation Optimize Operations & Decision Making Insurance Use Cases Optimize Pricing Eliminate manual inspection to quicken claims processing Spot missed subrogation opportunities Examine past behavior, perform Social network and stakeholder analysis for near real time fraud detection Enabler for: Personalized and targeted marketing Predicting Lifetime Value Customer Segmentation Cross sell opportunities Predicting and preventing customer churn Accurate need analysis Data driven dynamic pricing Real life applications: 1. Telematics - Pricing on driving habits 2. Wearables – Pricing on healthy habits 3. Home Sensors – Pricing on safety Leads to profit for insurer, affordability for customers Though, there are some privacy concerns Data driven decision making – Find, visualize, understand and strategize Channel optimization Lead prioritization and demand forecasting Anticipate user expectations to spot and ride next disruptive trend
  4. 4. 4 Snapshot Adoption Value Proposition Key Benefits What is it? By combining Data analytics with mobile and cellular communications technologies, Progressive turns previously unusable data into commercial advantage Data driven business model enables it to be well prepared to respond to future disruptive trends Since inception in 2008, 4 million drivers have tried Snapshot Progressive has collected more than 15 billion miles of driving data Progressive wrote $2.6B in Snapshot premiums in 2014 Snapshot is a voluntary discount program in which drivers can save money on their car insurance by sharing a picture of their driving habits with Progressive Transition from educated guesses to fact based underwriting Reduced claims cost, promote social good Increase in customer acquisition and quality customer retention rate Improved customer and brand loyalty Gaining competitive edge 1. Progressive D&A Initiative Snapshot Programme
  5. 5. 5 DSDP – Building Analytics Pipeline Data to Insight to Outcome Key Benefits 2. Mass Mutual D&A Initiatives 1. Haven Life 2. Data Science Development Programme Haven Life – Get insured in 20 min MassMutual is using Big Data analytics to figure out who their potential customers are, as well as determining key metrics that regulate their need for insurance products. It also helps them identify fraudsters who seek insurance, hoping to scam the company. Data Science Development Program (DSDP) trains promising, recent graduates to become well-rounded data scientists for MassMutual DSDP shows how insurers can embraces Big Data to better reach potential customers Haven Life combines customer medical and financial data with data from public database and uses proprietary algorithms to issue insurance decision in 20 min An apt example of industry disruption through analytics- driven process improvements Systematically estimating the risk Improve business efficiency and customer experience Better customer service and fraud mitigation with accurate prediction and estimation Critical differentiation and competitive advantage
  6. 6. 6 Data Consolidation at its best Big Data Big Outcomes Key Benefits Customer Centricity The ability to see the big picture and interact with all the information drives better call centre experiences for customers. Customer representatives are able to quickly and efficiently answer questions, manage claims and offer relevant services or promotions with reduced call and wait times. The MetLife Wall integrates information from 70 legacy administrative systems into one platform Down to 1 screen with all the necessary information from 15 Shows all the interactions that customer had with MetLife across its omni-channel touch points MetLife Wall provides a Facebook like timeline of MetLife customer’s transactions - claims, records, status, etc., making it possible to easily access customers information and cross- sell products Promotes customer centricity as one of the core strategies of the company Enables the insurer's service representatives to better serve customers Takes personalisation to a new level 3. MetLife D&A Initiative MetLife Wall
  7. 7. 7 Where human capabilities fail From Data to Actionable Insight Key Benefits How Allianz Does it? Fraud analytics turns data into profitable information automatically ultimately enhancing claims function Analytical solution reduces the time and resources required while improving their success rate Incorporates wide sources of siloed, unstructured and structured data Identified 1161 fraud cases worth CZK 62 mn, compared to 426 cases worth CZK 10 mn for previous year Investigated 26% more cases 40 % more proven fraud cases for criminal prosecution Saved about CZK 110 million a year by reducing the number of fraudulent claims Allianz Insurance in the Czech Republic is using SAS Analytics to identify and prosecute cases of insurance fraud Network and associative analytics give representation of links between fraudulent activity and collaboration points Efficient fraud detection reduces annual claims payouts Spot more fraud cases along with anticipating new type of frauds which might occur in future Reduced false positive rate - boosts employee productivity, minimizes loss adjustment expenses and avoids customer ire and legal hassles 4. Allianz D&A Initiative Fraud Analytics
  8. 8. Contact The Digital Insurer: hugh.terry@the-digital-insurer.com Our digital insurance content is free for subscribers and supported by our sponsors. Join more than 12,000 others @ www.the-digital-insurer.com About The Digital Insurer The forum for professionals interested in digital insurance Objective: to help the insurance industry to take full advantage of digital trends and technologies The services we offer to ensure our content remains free Site sponsorship for content sections Listing & content development services for technology companies Consulting services on digital insurance in partnership with KPMG Conference speaking and workshops Database & insights on digital innovations around the world Snippets, InViews and case studies Searchable by region and category Published by: Sponsored by: What is Digital Insurance in Action?

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