the next generation of business intelligence moderator:al hapke president, aspect inc....

The Next Generation The Next Generation of Business Intelligenceof Business Intelligence

MODERATOR: Al HapkePresident, Aspect Inc.

PANELISTS: Thomas ChesbroughFounder & Executive Vice President, Thazar Solutions Corporation

James StreffPresident, Streff Insurance Services

This slide presentation contains confidential and proprietary information which is the property of Thazar Solutions Corporation®.

CAS 2001 Seminar on Ratemaking Session DAT-9

2INFORMATION TO INSIGHTTM

In This SessionIn This Session

• Current environment

• Lessons learned

• Evolution of next generation systems

• Examples

• Real-world usage and benefits


Current EnvironmentCurrent Environment

• Custom data warehouse and applications

• Lengthy implementation timeframe

• High implementation costs

• High-risk implementation process

• Uncertain and unidentifiable user benefits

• Inability to quantify ROI


The Next GenerationThe Next Generation

• Intuitive business intelligence environment that enables user to isolate and clarify problems

• Low-risk, low-cost, end-to-end solution

Complete operating environment

Pre-packaged insurance warehouse

Advanced analytic systems

Built-in insurance metrics

Proven decision theory and statistical testing

• Data foundation supports rapid, accurate decisions


Lessons We Have LearnedLessons We Have Learned

TraditionalTraditionalData WarehousingData Warehousing

SolutionsSolutions

Pre-packaged Insurance Pre-packaged Insurance Warehouse & AnalyticWarehouse & Analytic

Application SystemApplication System

ScopeScope • Enterprise-wide

• Captures all data elements, whether or not they will ever be used in company analyses

• Focused on business operations

• Captures data elements vital to analyzing and monitoring company performance

EffortEffort • 6-24 months or longer

• Large-scale custom ETL processes typically lengthens implementation

• 90-160 days

• Standardized templates speed up implementation


Lessons We Have LearnedLessons We Have Learned

TraditionalTraditionalData WarehousingData Warehousing

SolutionsSolutions

Pre-packaged Insurance Pre-packaged Insurance Warehouse & AnalyticWarehouse & Analytic

Application SystemApplication System

CostCost • $500,000+ depending on company size

• Short implementation process and subscription-based pricing reduces cost dramatically

ResultsResults • Large, complex data warehouse that stores all the information a company would need, but end users still don’t know how to use the data once they get it

• Effective system that empowers user to analyze and monitor the effectiveness of their business processes


The Information Sweet SpotThe Information Sweet Spot


Business Intelligence InvestmentBusiness Intelligence Investment


The Evolution ofThe Evolution ofBusiness IntelligenceBusiness Intelligence

1985 1995 2001 & BEYOND


Traditional ImplementationTraditional Implementation

Client Responsibility

Custom Work

• Numerous Resources• Skilled Craftsman• High Cost• Excessive Time• Opportunities for Mistakes

CustomETL Process

ClientData Stores

CUSTOMEXTRACTION

CustomData Warehouse

CustomData Marts

Custom Data Marts& Manual Balancing

CUSTOMLOAD

CUSTOMPOPULATE


New Implementation ApproachNew Implementation Approach

ClientResponsibility

AutomatedProcesses

MappingTemplate

ClientData Stores

Insurance Warehouse

InsuranceData Marts

Analytic Applications

Pre-definedData Marts & Automated Balancing

Client XMLTag Data Maps To Standard Template Codes

PackagedWarehouse

CLIENTEXTRACTION

XMLCONVERSION

AUTOMATICPOPULATION

SUPPORTSANALYSES


Deployment EnvironmentsDeployment Environments

Client-site deployment

• Client responsible for

Operations

Hardware & software costs

Maintenance & support

Internal resources

Training issues

Thazar-hosted environment

• Thazar responsible for

Operations

Hardware & software costs

Maintenance & support

Internal resources

Training issues

• Proven alternative that reduces cost of entry

• More ROI, more quickly

• Remote access via Internet


Thazar-hosted Deployment

Client-siteDeployment

Thazar’s Database Server Application Specific Data Marts

Application Registry App. Relationship Mgmt System

Security Database

Thazar’s WebsphereApplication Server

Java Server Pages (JSP) Engine Servlet Engine

Enterprise Java Bean Engine

INSsight Shell Business Intelligence Subscription Shell

Subscription Mgmt. Database / API

Client’s Database Server Application Specific Data Marts

Application Registry App. Relationship Mgmt System

Security Database

Client’s WebsphereApplication Server

Java Server Pages (JSP) Engine Servlet Engine

Enterprise Java Bean Engine

Client’s INSsight Shell Business Intelligence Subscription Shell

Subscription Mgmt. Database / API

Data Store, Warehouse, and Marts

Data Store, Warehouse, and Marts

USER

Data Transfer(if using Thazar-hosted deployment)

User accessvia Internet

(if using Thazar-hosteddeployment)


The Next GenerationThe Next Generation

• Complete solution with seamless integration

• Analytic applications answer specific business function questions and guide user through analysis

• Answers four basic questions

Who

What

When

Where


Intuitive ApplicationsIntuitive Applications

• Users don’t have to know:

Complex data structure

Technical data element name

Granularity of data

SQL knowledge

• Users can easily view information from many angles and analyze at deep levels

• Seamless, integrated applications support complete thought process from discovery through analysis


Simple Interface, Complex QuerySimple Interface, Complex Query

• Not just queries, but proven statistical analysis

Profile Monitor: Chi Square algorithm

Retention Monitor: unique loyalty matrix

Loss Monitor & Retention Monitor: leading edge customer aging process

• Simple interface, but complex query underneath

One-click summary launches 32 queries to obtain LOB attributes for new & existing business in Profile Monitor


SCORING &MODELING

PORTALSBENCHMARKINGMONITORS

ANALYSESQUERIESSCORES ANALYTIC

APPLICATIONS

INSUREMARTS

CLAIM POLICY OTHER EXTERNAL

DATASTORES

LOADTRANSFORM

EXTRACT

STANDARD TEMPLATE

INDUSTRY-STANDARD

NAMING& CODES INSURANCE

WAREHOUSE

INSsightINSsightBusiness Business Intelligence Intelligence SystemSystem


Success Criteria for Success Criteria for Web-based Business IntelligenceWeb-based Business Intelligence

• Performance

• Scalability

• Low-cost administration

• Security

• Pricing

• Ease of use

• Interactivity

• Availability(anywhere, anytime)

• Functionality

• Architecture


An Actuary’s Perspective An Actuary’s Perspective

• Data is accessible and accurate

• Eliminates many clerical tasks

• Allows work at the highest level possible

• Produces valuable business intelligence in operational areas

• Produces more surgical solutions more efficiently


A Product’s Hidden CostsA Product’s Hidden Costs

• Actuaries can calculate product price to compensate for added costs due to poor management

• Many factors add cost to the product

An undisciplined distribution force

Customer disloyalty

Underwriting poor risks

• Adverse selection adds cost to the company

• Actuaries need to apply their skills to eliminate added costs to keep product prices as low as possible


Defining A Good SolutionDefining A Good Solution

• Measures behavior that produces good results

• Includes responsive formulas for early detection

• Isolates measurements on any subset of information

• Follows stream of logic in solving problems by linking applications

• Scores performance and sets alerts


INSsightINSsight™™ Applications Applications

• Retention Monitor™ – measures retention trends

• Loss Monitor™ – measures underwriting excellence

• Profile Monitor™ – measures discrete changes in a company’s book of business

• Claim Monitor™ – measures claim excellence

• Ratemaker™ – supports the pricing function

• Prophet Portal™ – provides guided query analysis


Retention MonitorRetention Monitor

• Loyalty has a big economic reward

• Companies with high customer loyalty are the most profitable and can sustain the best growth rates

• Measures customer and agency loyalty

• Measurements can be calculated by month of issue or by calendar month


Loss MonitorLoss Monitor

• New business is difficult to underwrite profitably

• Losses early in a policy’s life are balanced by profits later in the policy’s life

• Underwriting losses on new business need to be balanced by profits on tenured business


Profile MonitorProfile Monitor

• Measures the characteristics of policies

• Identifies adverse selection

• Measures the direction of a book of business


Claim MonitorClaim Monitor

• Designed as a comprehensive (holistic) system for measuring claims excellence, including

Accurate claims reserving

Claim cost containment

Control of claim expense

Recovery of salvage and subrogation

Proper pace for claim closure


RatemakerRatemaker

• Produces a complete set of ratemaking exhibits

• Enables actuary to interact with the application in regard to:

Claim trend factors

IBNR

Premium drift factors

Large loss loadings


RatemakerRatemaker

• Ratemaker will include:

Rate Indication Worksheet

Analysis of Catastrophe Losses

Calculation of Loss Trend Factors

Analysis of Rating Parameters such as Increased Limit Factors

Analysis of Losses by Layer of Loss

Analysis of Time Lags and Calculation of Investment Income


Prophet PortalProphet Portal

• An extremely versatile, all-purpose application

• Allows actuary to focus on almost any inquiry imaginable, including options for defining loss ratio, exposures and time intervals

• Tremendous power to isolate measurements on any subset of geography, rating parameter, distribution entity, and product characteristic that arise from the questions of who, what, where and when


Summary Summary

• Thazar’s next generation business intelligence systems gives actuaries more powerful tools:

By providing an accurate repository of data

By giving logic to follow logical thought process in problem solving

By incorporating more business intelligence into the decision making process

By allowing the actuary to concentrate on business issues not data issues

See See INSsightINSsight™™ in action! in action!Please contact us to participate in Please contact us to participate in

one of the following online demonstrations:one of the following online demonstrations:

Private demonstration times also available.T1, Cable, or DSL Internet connection required.

Thurs., March 22, 9 a.m. CSTThurs., March 22, 9 a.m. CST Thurs., March 22, 1 p.m. CST Thurs., March 22, 1 p.m. CST Wed., March 28, 9 a.m. CST Wed., March 28, 9 a.m. CST Wed., March 28, 1 p.m. CST Wed., March 28, 1 p.m. CST

888.527.7866 www.thazar.com

the next generation of business intelligence moderator:al hapke president, aspect inc....

Documents

insighttm lessons

data elements vital

business operations

streff insurance services

property of thazar solutions

proprietary information

cost of entry

company analyses