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Digital Acceleration in Insurance
The document discusses the importance of digital acceleration in the insurance sector, emphasizing the critical role of data for innovation and customer insights. It highlights various strategies for leveraging data analytics, improving customer engagement, and enhancing operational efficiency across multiple functions such as underwriting and claims management. Ultimately, it outlines how accurate data integration and enriched customer profiles can significantly transform the insurance industry by driving growth and risk assessment.
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Digital Acceleration in Insurance
- 1. Digital Acceleration In Insurance BenMatarese, Director, Insurance Practice
- 2. Digital Acceleration InInsurance Digital Acceleration In Insurance 2 Data Is the Holy Grail Data critical to innovation in insurance Data provides greater insights into customer behavior and requirements Use of data delivers a more flexible business model to serve digital customers - Insurtech Trends for 2019, KPMG Technology Dimensions of the future Business Model • Analytics Enabled • Operationally Agile • Technology Powered • Data Centric Enrich customer-facing digital experiences for increase personalization Accelerate digitization initiatives - Next Wave Life Insurance 2020, EY Accelerating Industry Change Greater focus on promoting healthy lifestyles, vitality, and wellness Leveraging AI to provide to change consumer behavior and patterns Data analysis will translate into personalized insights and interventions for patients, and patients accessing these insights - 2021 Global Health Care Outlook, Deloitte
- 3. P&C Health Life 7% Insurtech Investments Digital AccelerationIn Insurance 3 8% 5% 9% 10% 8% 5% 6% 2% 2% 3% 4% 3% 17% 11% Product Development Marketing Claims Distribution Pricing < 5% 5 – 10% > 10% Digital Disruption in Insurance: Cutting Through the Noise McKinsey, 2021
- 4. Data Integrity inInsurance Data Integration Data Enrichment Location Intelligence Data Quality Accurate View of Risk Personalized, Digital Customer Experience Data Governance • Pricing Accuracy • Reduce Risk • Pre-score rates • Aggregate Risk Analysis Underwriting/Actuary • Machine Learning Models: Improve efficiency, timeliness & quality Data Science • Manage Claims Resources • Improve efficiency • Improve customer service • Fraud Determination Claims • Market Segmentation • Cross Sell • Customer Experience • Agency Optimization • Behavior Modification Marketing/LOB Digital Acceleration In Insurance 4 Data Infused Analytics
- 5. Digital Acceleration In Insurance Customer Growth Customer Experience Risk Assessment Cloud Transformation DigitalAcceleration In Insurance 5 Risk & Compliance
- 6. Customer Growth Market &Agent Assessment Data Driven Insight Anyone Can Use • Market Assessment Prioritize target markets for new and in-fill/growth Agent Network Optimization • Performance Benchmarking Set revenue targets based on observed market opportunities • Empower Data Science via an extensible framework Precisely Propensity Models Client Models • Point & Click Reports Digital Acceleration In Insurance 6
- 7. Customer Growth Relationships inData Challenge Result • Support new growth strategies • Cross sell and Up Sell • Acquire new customers & agents • Achieve a 50/50 revenue balance between CL and PL Objective • Who are my best customers? • How do I identify “like prospects”? • What relationships exists between policyholders, policies, households, commercial entities & locations? • Can I get insight in a short period of time? • Is it possible to align Agent & Customer Profiles? • Quickly analyze and prospect into desired markets • Simplified view of complex relationships • Identify personal lines policyholders that own businesses • Aware of all businesses at a location beyond existing PIF • Able to align agent and client/prospect profiles Aggregate Explore Increase ML Model Accuracy Faster & Better Decisions Derive Insights & Context Data Relationships 7 “Operationalizing data across the business is our biggest challenge” VP Predictive Modeling & Global Actuarial Data Services Global Precisely Insurance Client Digital Acceleration In Insurance
- 8. Customer Engagement Consumer DataEnrichment Challenge Result Objective • Growth goals supported a series of marketing campaigns using email, web social media, etc. • Need to understand and recognize both customers and prospects in real-time • Use customer understanding to inform their interactions; e.g., what to say and how to communicate • Customer data was consistently incomplete • Could not easily and accurately resolve identities with confidence • Prospects & customers interacting across multiple channels over time • Marketing lists vary in quality and completeness • Able to complete and validate their existing customer profiles • Profiles can be enriched with additional insight including demographic, social, employment, location and more. • New client or prospect data, regardless of source, is now verified, enriched and scored (for accuracy and completeness) in real-time. Digital Acceleration In Insurance 8
- 9. Customer Engagement Enrich &Complete Customer Profiles INBOUND CHANNEL WEBSITE APPS RETAIL STORE SOCIAL CUSTOMER CARE LOYALTY Housing 123 Main Street Single Family Home Homeowner Mortgage $ 200K Home Value: $ 250K Phone Mobile: 202-555-6347 Mobile: 703-263-4532 Landline: 703-444-3111 Email jdoe@gmail.com John.doe@comcast.net jd123@yahoo.com Demographics 45 Years Old Male Married Children Does Not Have Children Yes, Alive Alive Automobile 2016 Toyota Corolla 1HGBH41JXMN109186 Hybrid 360 IDENTITY Social Profiles Digital IDs Cookies, Mobile IDs Emails BSB and B2C Phone Name Location, Postal Affinities, Demographics Relationships LOCATION Denver @GMAIL s.miller5 PHONE 2 @YAHOO.COM sam.miller DEVICE IDS 3 OCCUPATION writer INTEREST gardening
- 10. Customer Engagement Personalized, InteractiveVideo Objective • Improve customer engagement • Educate clients • Encourage digital attachment during the customer onboarding process Challenge • Complex terms and coverage information • Communicate policy details across a variety of products (auto, homes, rental properties, and umbrella coverages) • Increase “digital attachment” via MyAccount and mobile app • Align digital initiatives with Agent Network Result • 66.5% of recipients average view time of 3 minutes • 41.1% of all visitors watched the entire video • 16.4% of all visitors accessed MyAccount via the video Digital Acceleration In Insurance 10
- 11. Assign a trustedID that is unique and persistent to each address. Assign a Trusted ID Achieve the highest level of address integrity and positional accuracy. Hyper-Accurate Geocode Use the ID to build a contextual view of a location for better insight. Operationalize Your Addresses Precisely Location-Centric Approach Operationalize Context & Insight Digital Acceleration In Insurance 11
- 12. 12 Data Provider 9115 CountryWood Plymouth, MI 48160 Reinsurer 9115 Countrywood St. Plymouth Township, MI 48170 Insurance Carrier 9115 countrywood dr. Plymouth, MI 48170 Precisely Location-Centric Approach “Minor address variations like misspellings or abbreviations were causing small differences in the information used to price policies and undermined the ability to develop an aggregate view of risk” Top 30 P&C Carrier
- 13. Street Address City, State PostalCode PreciselyID Longitude Latitude Location Code Property Indicator 440 Louisiana St Houston, TX 77002-1639 P0000M3OMLT9 -95.3648 29.76276 Within Building Structure Commercial (Condominium) PreciselyID Flood Risk Wildfire Risk Wind Risk Hail Risk Tornado Risk Hurricane Risk Distance to Coast P0000M3OMLT9 Moderate None Medium Medium High Medium 25249.029 PreciselyID First Name Last Name Household Income Est. Automobile Lifestyle People in Household Email Address P0000M3OMLT9 Jonathon Smith $ 200,000 2009 BMW 325i VIN: WBGDG83649A005289 High Tech Enthusiast Active Investor 4 jsmith@gmail.com Precisely Location-Centric Approach “”Precisely makes location data model ready” Data Scientist, P&C Carrier
- 14. 2250 OLD BRICKRD GLEN ALLEN, VA 23060 PID: P0000NH4IJ4P BID: B000CTPPRWG7N 3910 GATHERING PL GLEN ALLEN, VA 23060 PID:P0000NH5VH3I BID:B000CTPRWG7N 3939 Duckling DR GLEN ALLEN, VA 23060 PID: P0000NH4IJ4M BID: B000CTPPRWG7N “The PreciselyID is the golden thread that ties all things together” Innovation Consultant, Large P&C Carrier Risk Assessment Co-Tenant & Adjacent Risk Digital Acceleration In Insurance 14
- 15. • Support forby-peril rating • Consistent view of risk with their reinsurer • Better understanding of risk/pricing to support growth into new states • Aggregate view of all known properties including claims experience • Data from multiple providers including geocoding & address validation • Different business functions and systems using different data • CAT Modeling team had different view of risk than reinsurer • All insight and policy details, including claims, linked by a PreciselyID • Hyper-accurate geocode leveraged across all LOBs and business functions • Consistent view of risk across the business and with reinsurer “We saw a 200% swing in our exposure estimates and a 15% increase in the number of locations geocoded using Precisely’s capabilities”. VP Risk Management Large P&C Carrier 5707 45th Street E, Lot 234 Bradenton, FL 34203 Risk Assessment Consistent View of Risk Challenge Result Objective 15 Digital Acceleration In Insurance
- 16. Policy Holder Insured Value Premium PreciselyID LongitudeLatitude Property Type Hail Size John Martin $28,007 $ 1,124 P0000M3OMLT9 -95.3648 29.76276 R >= 3 in Hail • Binding Suspension • First Notice of Loss • Claims Resource Positioning • Risk Forecasting • Fraud Determination • Pricing/Underwriting Risk Assessment Natural Catastrophe • API Access • Integrated with PreciselyID • Client configurable thresholds • National Coverage • 3 Integrated Fire Models/50 Risk Designations • Detailed Weather Data • Reports & Alerts Digital Acceleration In Insurance 16
- 17. • Increase shareof high net- worth properties • Reduce risk in states with incidents of wildfire • Write profitable business in states with incidents of wildfire • Wildfires are an increased and continued threat • Carriers lost over $ 2B across 1,500 + properties within the Woolsey fire perimeter • Existing Wildfire model did not accurately reflect actual behavior • Link all known information about a property in a Wildfire zone • Profitably write 190 policies within the Woolsey fire perimeter. • Declined to write 30 policies • Leverage PreciselyID to link fire scores, aerial imagery and more • No total losses but some loss for smoke damage, outbuildings and fences Risk Assessment Natural Catastrophe Challenge Result Objective Digital Acceleration In Insurance 17
- 18. Risk & Compliance DigitalAcceleration In Insurance 18 • What Personal Data do you hold? • What are you doing with it? • Do you have permission to use it? • Who has access to it? • Where is it stored? • Consumers have power! – Data is wrong – fix it – Erase my data – What do you know about me? • GDPR • HIPPA • AML • FACTA • KYC & KYCC • The California Consumer Privacy Act (CCPA) • State of CT Notice Concerning Big Data & Discriminatory Practices
- 19. Digital Acceleration InInsurance Risk & Compliance Operational Governance 19 Provider Network Analysis & Adequacy • Address Data Quality • Precise Location • Exact Travel Time • Distance Between Locations • Transit Data
- 20. IT Security &Operations Mgmt Cloud Data Warehouses Cloud Platforms Big Data Data Integrity Supporting any Data Architecture Mainframe & IBM i Analytics/ML Traditional Enterprise Data Warehouse Hadoop Integrate Business Intelligence Cloud Stores Enterprise Sources Verify Enrich • Replication • Real-time • Batch • ETL • Virtualization • Discovery • Cleansing • Entity Resolution • Governance • Knowledge Graph • Geocoding • PreciselyID • Property attributes • Demographics • Consumer insights Data that is Accurate, Consistent and in Context Digital Acceleration In Insurance 20
- 21. • Every Addressable Locationin the US is pre- scored – over 200 MM • Leveraging Precisely, internal and 3rd party data – over 9 Billion rows. • More accurate pricing • Meeting promised SLAs • Nationwide growth initiative • Grow while managing financial risk • Pre-score every address in the country and make it highly available to their Policy Admin. System • Enable all agents and customers to be able to obtain a fully priced and underwritten policy quote in less than 2 minutes. • Massive compute environment to process entire country with speed and scale • Leverage a significant amount of data from a variety of sources Cloud Transformation Challenge Result Objective Digital Acceleration In Insurance 21
- 22. Digital Acceleration InInsurance Cloud Transformation 22 • Looking to extend/improve healthcare analytics and business intelligence • Minimize the number of vendor applications to establish a data integrity/ data management foundation • Create a process to continually “onboard” data as well as maintain a data catalog • Leverage Machine Learning enabled Data Quality and Matching • Planning to include “location” to enrich their data Future State Health Model Deloitte Consulting
- 23. Digital Acceleration InInsurance Addresses & Digital Acceleration 23 Home Drug Delivery Delivery Errors result in significant costs and potentially dangerous gaps in care Provider Directories Providers work for multiple locations and often have different billing addresses Change locations frequently Consumer Marketing Enable Direct Mail Provide Linkage to other data to enable personalized engagement Compliance Every EOB delivered to the wrong address is wasted spend and a security breach Analytic Models From Social Determinants of Health to market projections, models require accurate location data
- 24. Digital Acceleration In Insurance Customer Growth Customer Experience Risk Assessment Cloud Transformation DigitalAcceleration In Insurance 24 Risk & Compliance Data Integration Data Enrichment Location Intelligence Data Quality
- 25.