big picture mutuality · the claims record is made available in real-time across all channels for...

BigPictureMutuality

ChairedbyAlanGoddard,CornishMutual

• DanielTischer,CentreforMutualandEmployee-OwnedBusiness,Oxford

• SteveBarry,ICMIF• RoyJubraj,Accenture

TECHNOLOGY AND INSURANCE – A

NATURAL MARRIAGE

12 OCTOBER 2015

Copyright © 2015 Accenture All Rights Reserved. Proprietary and Confidential

General Insurance Trends

Innovative insurers must balance digitalisation, customer centricity and legacy modernisation to compete effectively in an evolving market.

Accenture Research have identified the following key trends for P&C insurers over the medium term…

Internet of MeA personalised world

Distribution in a Mobile WorldA dynamic, accessible and continuous consumer interaction model

The Intelligent and Changing EnterpriseHuge data, smarter systems - better business

Outcome EconomyTraditional business models are under threat. Outcomes over Products

Future Products and PricingConsumption and composite propositions

Workforce ReimaginedCollaboration at the intersection of humans and machines

“Insurance is inherently about managing risk, and the key to surviving these challenges is flexibility and insight”

The Platform (R)evolutionDigital platforms are becoming the tools of choice

Global Insurance CEO

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The changing realities we can’t escape…

Customers are

empowered

Engagement is on their

terms

Platforms and devices change the playing field

There is a new face of competition

New Profit Pools

5


Digital Has Disrupted Customers

In the last decade, consumer dynamics across sectors have deeply changed.

Compared to 10 years ago… Today…

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44% / 68%Informed and self-directed•Wants access to relevant content in real time

48% Social•Relies on “wisdom of crowds” (social media, blogs, …)

52% Online•Prefers to buy insurance online

64% Price-sensitive•Wants to be in control

72% Connected•Wants to interact with insurers in his digital environment

78% Willing to share•Will provide personal information in exchange for better, more personalised insurance cover


…and transformed the industry

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The industry is being transformed by disruptive new technologies

Usage-based

insurance

TelematicsAggregator Connected Home Life Style

Insurance

Seamless omni-

channel experience

Big data & Analytics

Social media

Mobility

Remote sensorsAutomated

adviceConnected people & devices


Different Customer, Different Intensity, Different Speed… Every Customer is a Digital Customer

Need to pivot to the multispeed customer organisation for all customer types.

Digital SavvyThey make digital technology part of all dimensions in their life. Mobile access is key.

TransitionalThey strive to leverage digital more broadly but may not always be able to do so.

TraditionalThey rely on traditional channels & interactions. Even then, they leave digital traces.

ExperimentalThey selectively engage in digital for utility value, discovering how the experience improves.

Higher Digital Customer Intensity

Increased Speed

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Yet Customers are being let down

Sector failing on customer experience (June 2015)

Report says insurance firms’ customer relationships are “bland and undistinguished”.

The insurance sector has been criticised for offering its clients a "bland and undistinguished" customer experience.

The review warned that companies in the insurance sector are failing to use customer experience to differentiate themselves and forcing customers to make decisions solely on price - a situation exacerbated by the aggregator sites.

Review, by MyCustomer.com, a customer relationship management expert

Findings in the review revealed that insurers are failing to engage consumers on digital channels, with just 20% responding to questions asked on Twitter and via email, and only 30% answering questions satisfactorily.

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Eight Trends Highlight Providers’ Struggle to Keep Pace

Globally, problems of the past and digital challenges of today are key hurdles.

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2

3

4

5

6

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Missing out on customer growth

Push customers to the exit

Under-exploiting own channels

Sub-optimising digital service

Service still falling short

“Dis-Loyalty” Programs

Not winning back defectors

First contact resolution is consistently the top frustration over past 5 years

Impact of company websites decreased versus other channels.

Low digital adoption due to lack of right information (30%) or spam risk (22%)

Switching due to poor service is flat or slight decreasing very slowly

For 60%, key driver is access to best deals focused on ‘short-term’ loyalty

8 Unprepared to face disruptors Many established providers are slow to adapt to new business models

Intent to buy less from current companies grew (+40%) in same period.

Many companies miss this opportunity, as switch back drivers are not compelling.

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The Digital Consumer – What does this mean for you?

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Analytics & Insights Snapshot

Data / Insights – Proactive vs. Re-activeCustomer AnalyticsClaim Analytics


Harnessing analytics to drive growth & profit

Leading organisations not only use data historically to evaluate best actions but also employ advanced analytics methods to predict and optimise future business outcomes to gain competitive advantage

Anal

ytic

al M

atur

ity

Optimisation

Predictive Modelling

Forecasting/ Extrapolation

Statistical Analysis

Alerts

Query/ Drill Down

Ad hoc reports

Standard Reports

“What’s the best that can happen?”

“What will happen next?”

“What if these trends continue?”

“Why is this happening?”

“What actions are needed?”

“What exactly is the problem?”

“How many, how often, where?”

“What happened?”

Business Value

Analytics-Enabled Decision Making

Predictive Insight to Outcome

Managing Information

Business Intelligence

§ Operational Reporting

§ Ad-hoc Query

§ Data Management

§ Data Visualisation

§ Dashboards

§ Data Warehousing

§ Optimised Decisioning

§ Big Data Exploitation

§ Predictive Modelling

§ Forecasting & Next Best Action

§ Behavioural Analysis

§ Advanced Data Segmentation

Reactive (looking back at

what has happened)

Proactive(looking

forwards at what will happen)

Copyright © 2015 Accenture All rights reserved. 13


Our point of view Analytics early adopters have an opportunity to get ahead and stay ahead by focusing and investing in the right areas, and emulating analytics leaders, not their industry competitors

Copyright © 2015 Accenture All rights reserved.

Current state - primarily…

Product-centric models across functional areas

Leaping the capability the industry is pursuing

Batch execution of manually built models

Actuarial GLM Regressions

Data ‘Built for BI’

Big Data Lakes

Uplift Modelling

Voice Analytics

Claims Forecasting

Aggregator Quote Modelling

Real-time Rules

From…

To…Cross-industry leader

Customer-centric models

Real-time digital channel connectivity

Analytics Embedded in Every Decision

Data ‘Built for Analytics’

Continuous Test & Learn -Always on

Personalised Next Best Action

Industrialised

Machine Learning

The Analytics Leap-frog

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Embedding Analytics Into The Insurance Lifecycle

Stimulus

Single Customer View

First Moment of Truth

Customer Experience

Targeting models

Zero Moment of Truth

Price and Purchase

Brand and direct marketing

Apply data to controlled marketing experiments to

understand and attribute marketing activity and

understand the impact and interaction with the brand

Develop a unique data insight to build separate

quote and conversion uplift models – combining

customer insight with underwriting knowledge to

improve marketing efficiency and grow

sales

Identify customers during the sales process in real time, and respond with the right, tailored offer

Understand what enriched data tells you about the insurance risk beyond

the standard 10 u/w questions

Embed partner data and predictive / prescriptive

decision models to improve cross sales, retention and improve customer experience

Manage ThirdParties

Predictive Analytics through the Claims Lifecycle

Predict ClaimEvents

Know Your Supplier / Opponent

Apply data to power claims management processes

with automated predictive decisions to reduce

claims costs by up to 5%and manage fraud

proactively

Understand your customers and their preferences better to manage third parties

during claims to improve customer outcomes and

maximise value

Market better Price / quote better Manage claims better Build profit

Our experience and credentials enable analytics to add value to every decision along the insurance lifecycle

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Accenture Customer Analytical Record

Accenture’s Customer Analytical Record (CAR) is a virtual single view of the customer combining multiple disparate data sources and made available for rapid predictive modelling and real-time predictive / prescriptive applications

CAR made available to:

Historical Model BuildEnable analysts to recreate single views of the customer at any historical point to

enable rapid predictive / prescriptive model builds

Big Data NOSQL Store

HybridCloud In-House

Transactions / Events

Applications / Products

Web / mobile logs

Accounts

External Behavioural

Data

Real-time Decision ManagementThe Customer Record is made available

in real-time across all channels for customer-level decisions at every

customer touch-point

Real-time Prescriptive / Predictive Analytics

Prescriptive analytics / machine learning running at <0.3ms isolating the

Individual Marketing Effect

Customer Journey

ETL

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Accenture Claims Analytical Record

Accenture’s Claims Analytical Record (CAR) is a virtual single view of the claimant combining multiple disparate data sources and made available for rapid predictive modelling and real-time predictive / prescriptive applications

CAR made available to:

Historical Model BuildEnable analysts to recreate single views

of the claim at any historical point to enable rapid predictive / prescriptive

model builds

Big Data NOSQL Store

HybridCloud In-House

Demographics

Claims Notes

Fraud Status

Financials

Event History

External Behavioural

Data

Real-time Decision ManagementThe Claims Record is made available in

real-time across all channels for claims-level decisions throughout the

claims lifecycle

Real-time Prescriptive / Predictive Analytics

Prescriptive analytics / machine learning running at <0.3ms isolating the likelihood

of adverse claims outcomes

Claims Journey

ETL

CAR Facts & Figures

500+variables

0.3msresponse time

20+Insurance clients

13Years of development

2-4 Weekscustom development

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Next Best Action for Claims

Post-FNOL Assignment

• Identifies claims that are more sensitive to the experience of the claims handler and enables predictive assignment post-FNOL

• Factors include:• Text mining of claims notes• FNOL detail capture• Age of claimant

FNOL Assessment Liability Triage SettlementNegotiate

Subrogation & Complaints Prediction

• Subrogation models can help identify recovery opportunities for both historic and current claims

• A combination text mining claims notes and predictive analytics can be used to identify those claims which are most likely to result in a complaint

Large Loss Prediction

• Although large losses contribute less than 2% of claims volume, machine learning can be used to identify claims earlier in the process that have a significant chance of becoming a large loss

• Preventative action can then be taken including re-assignment to an experienced operator and proactive claimant contact

Settlement Sensitivity

• Prescriptive analytics can be integrated with external data sources to evaluate price points and determine the optimal settlement method

• Price and timing are key components with some claimants accepting lower offers at certain points in the process and/or month

Cross-sell / Retention Messages

• Following a successful claims process, advanced analytics was used to test and learn the most valued treatment to apply to a satisfied customer including:

• Product cross-sell• Up-sell of any missing cover• Retention messages and offers

Powering a claims department‘s claims processes with automated predictive decisions is helping insurers identify opportunities to reduce claims losses by up to 5%

Straight Through Processing

• Prescriptive analytics can use integrated rules based decisioning to:

• optimise various processing points

• reducing handler effort; and• improve the customer

experience

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Know Your Supplier

…Improve supplier assignment by identifying those claims which are more likely to result in complaints if routed to particular repairers…

… Identify opportunities to reduce claims loss cost by leveraging nuanced insight into every supplier and comparable cost breakdowns …

The Claims Analytical Record can be rolled up to Supplier level to optimise which claims should be routed to which suppliers and help reduce claims loss cost and potential complaints

Supplier Analytical Record

Insight-to-Action-to-Outcome

… Use analysis to re-tier supplier network and feed a claimant level prescriptive model to optimise customer journey…

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What we’d like to talk about…

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1hr 45min


How are Accenture Achieving This? The Insurance Labs

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Drivers• Changing Consumer

• Digital – Mobile, apps• Cloud, In memory

• Next Gen Applications• Data is the new currency

Demands• Radical Cost reduction• Flexibility• Pace & Agility• Certainty & reliability• Simplicity• Power & Capability to

differentiate• Insight

Duck Creek & Best of Breed Software

Content & Product accelerators

Available Now

Available Now

Available Now

Available Now

Many organisations

talk about digital

insurer… …we decided to build it

‘Hub’ for Alliance partners to integrate OOTB Best-of-Breed software solutions

Cloud• Cloud (Azure) Hosted,

rapid release and scalable {logo}

Investment• $87m globally in FY15• $4m in UK Insurance Labs

alone over 24 months

Deployment Factory• Agile labs environment

deployment factory• CRP approach for

delivery at scale

• Integrated, Omni Channel Online capabilities, Policy, Rating, Billing and Claims, CRM and Analytics, using best of breed assets and products

• Performance tuned, 20m quotes a day with sub second response times

• Configuration based assets built on a modern flexible architecture

Key Facts


The Digital Insurer

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