Commercial Pricing & Portfolio AnalyticsThree impossible things before lunch, with apologies to Lewis Carroll

David Ovenden

September 2019

Commercial Pricing & Portfolio Analytics

September 2019 2

Agenda

Challenges

Ambition Statements

Data Assets & Data Strategy

The Answer v Decision Support

Technology

A Vision for the Future

“Three Impossible Things before Lunch”

September 2019 3

The Challenge

A Strategy for data

Unpicking the technology

Changing the culture

Ambition Statements“Every adventure requires a first step”The Cheshire Cat, Alice in Wonderland

28 August 2019

“Every adventure requires a first step”

September 2019 5

Ambition Statements

Technical

Pricing

Underwriting

Decision

Support

Active

Portfolio

Management

Process

Efficiency

Technology

Culture and Leadership

Data Assets & Data Strategy“Curiouser & Curiouser”Alice, Alice in Wonderland

27 August 2019

“I do not have enough data to build a predictive model”

September 2019 7

Data Actions

• Align the past

• Fix the future

• Cross function data alignment

• Global consolidation

• External enrichment

• Unstructured data

Case Study

Tone from the top

Intolerance of anecdote

Correction of data issues

Breaking the cycle of poor data

September 2019 8

Data Strategy

Identify

Capture

Conte

nt

Store/

Protect

ProvisionE

nvironm

ent

People

Process

Culture

The Answer v Decision Support“It would be nice if something made sense for a change”Alice, Alice in Wonderland

27 August 2019

Size is a poor proxy for complexity

September 2019 10

Automated Trade Footprints

Often SME or eTraded risks are defined

by some simple one dimensional metric:

• Risks less than £10k

• Risks with less than 10 employees

• Risks that have less than a £1m in

turnover

Plotting this against trade provides a

circular automated footprint

Construction

Financial

Services

Manufacturing

Charities and

Social

OrganisationsLogistics and

Transportation

Property

Owners

and Real

Estate

Automotive

and

Aviation

Retail

Size is a poor proxy for complexity

September 2019 11

Automated Trade Footprints

Often SME or eTraded risks are defined

by some simple one dimensional metric:

• Risks less than £10k

• Risks with less than 10 employees

• Risks that have less than a £1m in

turnover

Plotting this against trade provides a

circular automated footprint, adding a

trade based layer makes things more

granular and interesting + Features - Features

Significant homogeneity

(no touch – autorated)

Case UW required

Identifiable risk drivers

(low touch)

Model

breakdown

point

Sector / Segment / perils

Average

Intervention area

Siz

e / C

om

ple

xity

Size is a poor proxy for complexity

September 2019 12

Automated Trade Footprints

Often SME or eTraded risks are defined

by some simple one dimensional metric:

• Risks less than £10k

• Risks with less than 10 employees

• Risks that have less than a £1m in

turnover

Plotting this against trade provides a

circular automated footprint, adding a

trade based layer makes things more

granular and interesting

Construction

Financial

Services

Manufacturing

Charities and

Social

OrganisationsLogistics and

Transportation

Property

Owners

and Real

Estate

Automotive

and

Aviation

Retail

Expanded Appetite Restricted Appetite

Using scored layers to create granular segments

September 2019 13

Enhanced Automated Footprint

Using an increasingly wide range of internal and external

data assets, it’s possible to develop, test and deploy a range

of models across the workflow process:

Pricing

Risk selection

Structured interventions

Routing

Prioritisation

Evaluation

These can be used to automate all or part of the business

process or support human intervention with decision support

Providing support requires a process

September 2019 14

The Underwriting Process

Understand the

risk and context

Initial acceptance

decisionTerms and

Conditions

Present the deal

optionsNegotiate

Price the risk

Develop deal

options

Research &

Pipeline

Case Underwriting decisions in context

September 2019 15

Decision Support

Example: operational models and decision support

September 2019 16

The Underwriting Process

Understand the

risk and context

Initial acceptance

decisionTerms and

Conditions

Present the deal

optionsNegotiate

Price the risk

Develop deal

options

Research &

Pipeline

Workflow Orchestration

Internal & External Data Assets

Example: operational models and decision support

September 2019 17

Risk Selection Support

Understand the

risk and context

Initial acceptance

decisionTerms and

Conditions

Present the deal

optionsNegotiate

Price the risk

Develop deal

options

Research &

Pipeline

Workflow Orchestration

Internal & External Data Assets

Outlier Identification

Sophisticated Automated Footprint

Example: operational models and decision support

September 2019 18

Renewal Optimisation

Understand the

risk and context

Initial acceptance

decisionTerms and

Conditions

Present the deal

optionsNegotiate

Price the risk

Develop deal

options

Research &

Pipeline

Workflow Orchestration

Internal & External Data Assets

Renewal Strategy

Broker connectivity Broker

automated

Trading

Rules

Negotiation at portfolio level

Example: operational models and decision support

September 2019 19

Renewal Optimisation

Example: operational models and decision support

September 2019 20

Renewal Optimisation

Unpicking the Technology“It’s not done by everyone minding their own business”Alice, Alice in Wonderland

27 August 2019

September 2019

22

Connected Specialisms

Policy Admin System /

Systems of Record

Impact Analysis, Scenario

Modelling & Street Pricing

Predictive

Modelling

Decis

ion

En

gin

e

New business triage

Broker dashboards

Renewal segmentation

Automated footprint

Industrialised planning and

reporting

Active portfolio

management

Op

era

tiona

l Data

Sto

rage

Credit and other TP data

Data

Ingestion

Broker API

interfaces and

Portals

eTrading /

Software house

deployment

Insurtech

Scoring

Interface and integration layer

Insurtech

DistributionUW Workbench

Core system of record

Market Facing & Decision

components

Pricing and Analytics Hub

enabled solutions

Data and Systems Integration

Data Extraction and Storage

A Vision for the Future“That is impossible……only if you believe it is”Alice and The Mad Hatter, Alice in Wonderland

27 August 2019

“That is impossible….only if you believe it is”

24

The Future

Execution Screen Insight Screen

“That is impossible….only if you believe it is”

25

The Future

Execution Screen Insight Screen

Real-time Connected Context

Questions“…which way ought I go from here?”Alice, Alice in Wonderland

27 August 2019