ibm - cognitive computing in insurance

CONFIDENTIAL CONFIDENTIAL


Cognitive Computing in Insurance: Going Beyond Predictive Analytics

© 2015 IBM Corporation

8 December 2015

Craig Bedell

2 © 2015 International Business Machines Corporation

Cognitive is the new competitive advantage

for Insurance

Watson is a cognitive technology that processes information more like a human than a computer—by

understanding natural language, generating hypotheses based on evidence and learning as it goes.

Cognitive Computing in Insurance

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Cognitive How can we learn dynamically?

Prescriptive How can we achieve the best outcome?

Predictive What could happen?

Descriptive What has happen?

How can everyone be more right… …more often? IBM Analytics

Learning Models Experience Memory Feedback mechanisms

Rules Optimization Models Recommendations

Predictive Models Scores Forecasts

Reports Dashboards Visualization

…5 key forces are changing the landscape of Insurance

Rising customer expectations

$ Low interest rate

Sophisticated fraud

Changing demographics

Rapid digitization


© 2015 International Business Machines Corporation


Pushing the current boundaries of:

Innovation

Growth



Helps focus on improving:

Engage

Discover Decide



Cognitive systems facilitate

Decision making

Reduce human bias

Scale Expertise



What is Watson ?



IBM Watson is a technology platform that uses natural language processing and machine learning to reveal insights from large amounts of unstructured data


Understands natural language

Generates and evaluates hypotheses

Adapts and learns


Watson brings together a set of transformational technologies to drive optimized outcomes

Watson is creating a new partnership between people and computers

that enhances, scales and accelerates human expertise.

Tabulating Systems Era

Cognitive Systems Era

1900

Programmable Systems Era

1950 2011

Corpus Manuals, FAQs, and

reading lists; i.e. body of knowledge

Representative Questions The questions asked to gain

knowledge and competence i.e. set Ground Truth

Trained Watson Ready to be put to work

i.e. use knowledge to learn more and answer

different questions

Watson is Schooled

Watson is taught, not programmed


How Watsonm

How Watson Works

Watch the video: https://youtu.be/_Xcmh1LQB9I

What makes Watson different?

Watson understands language. It understands what is being asked and is able to find and communicate answers.

How can Watson be used? •  Engage in conversations •  Explore - find and aggregate

information •  Discover information and

relationships •  Decide - evaluate information

against defined criteria

The Watson Difference



Explore - find and aggregate information

Visualize, and discover insight in unstructured data through NLP and text analytics, Content analytics and cognitive insights

Explore information from internal and external content including unstructured text, emails, call center records…

Apply cognitive capabilities to enhance, scale, and accelerate human expertise

Explore

Analyze

Interpret


Characteristics that represent good uses of Watson:


High volume of unstructured data

Users want to explore multiple answers

English language* (Spanish & others in progress)

Support dialogue when appropriate

Require answers with evidence

Continuously learn

* multilingual support available for content analytics



Cognitive in Insurance


Watson Underwriting Advisor Enable Underwriters to work more efficiently

Read and understand the natural language contained within unstructured documents, continuously learn based on feedback Create a comprehensive evaluation process to collect, integrate, visualize and evaluate risk Use cognitive reasoning to rapidly parse relevant evidence and generate hypothesis.


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Maximum Age Criteria: Born after January 14, 1945. DOB: 1/15/1950

Total Cholesterol = 276and HDL ratio= 5.1 No information provided in submission

Blood Pressure Reading: Not to exceed 140/80 age ≤ 55, Not to exceed 140/90 age > 55. BP: 135/85

DUI/DWI history: no incidents in the last 5 years.

Cardiovascular disease: none. No cardiovascular disease. Last examined 2 years ago.

Universal Life Underwriting Guidelines

Health History

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Benefits of the Watson Underwriting Advisor

•  Evaluate the submission rather than data

gathering

•  Reduces time to process each submission

•  Reduction of Underwriting Expenses

•  Incorporation of “best practices” expertise for

consistency and accuracy

•  Scale underwriting staff

© 2015 IBM Corporation 21


Transform Underwriting Make existing decisions smarter by incorporating insights from unstructured data

Underwriter

Review Application Completeness

Review and Apply Underwriting Guidance

Recommend Underwriting Decision


Summarize & extract information from

submission

Enrich submissions by combining internal

and external data

Evaluate products for performance and

key metrics

Support decision making with insights

from precedence

Improve decision making with

continuous learning

Cognitive Underwriting

Structured Data

Application Documents

Historical Data & UW notes

Social Data Loss History

Inspection Reports

Example Customer Data

Public Medical Literature

Watson Health Data

Wikipedia DBPedia

Public Financial Data

Historical Public

Submissions

Weather Patterns

Example Watson Data

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Watson Wealth Advisor

A set of services enabling advisors to understand client needs, engage with clients based on individual sentiments, personalized events & news and provide evidence based advice

23 © 2015 IBM Corporation


Self Service Virtual CSR

Extend expert personalized advice.

!  Strengthen relationships through better customer advice & information sharing

!  Increase revenue through better informed next-best-action, cross-sell / up-sell

!  Improve operational efficiency



Customer Self Service

Insureds

Producers

Field Staff


Informed Interactions –


Other Insurance Areas of Focus

Claims Adjusting

Producer Effectiveness

Marketing Optimization & Customer Insight

Legal Risk & Exposure

Policy Language – Legal Interpretations



http://www.ibm.com/analytics/watson-analytics/

IBM Watson Analytics for Insurance

ibm.biz/cognitive-future-insurance-ibv


For more information

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What will you do with IBM WATSON ?


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