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Predictive Analytics in Insurance Getting it right when your customers need you most Rob McCullagh Tony Boobier Dr Claire Jordan 16 November 2016

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Page 1: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

Predictive Analytics in Insurance –

Getting it right when your customers

need you most

Rob McCullagh

Tony Boobier

Dr Claire Jordan

16 November 2016

Page 2: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

Today’s Speakers

2

Tony Boobier

Published Author –

Analytics for Insurance

linkedin.com/in/tonyboobier

Dr Claire Jordan

Senior Analytics Consultant

linkedin.com/in/clairejordan

Rob Mc Cullagh

Strategic Account Director

linkedin.com/in/robmccullagh

Page 3: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

Today’s Topics

3

The Analytical Insurer

Using Predictive Analytics to drive customer experience and increase profitability

Predictive Analytics in Insurance – injecting intelligence into the

claims process

Page 4: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

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• Independent consultant and industry

commentator

• Previously World Wide Executive at IBM

• 30 years insurance industry experience

• Author of ‘Analytics for Insurance’

About me:

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5

The “analytical insurer” is an insurance company using analytics throughout its organization to

improve business performance.

Page 6: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

Distribution

Economy

Incl Brexit

Competitive

Environment

Demand for Growth

Risk Management

Digital and More ‘Savvy’ Customers

Market Changes require Greater Insights

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Page 7: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

Mobile Social

Cloud

Analytics

The Mega Technology Trends in Insurance

7

FinTech

Page 8: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

The ‘Connected’

Car /Home/Person

Innovating to

Zero Urbanization

Geo-socialisation

The New Mega Trends in Insurance The New Mega Trends in Insurance

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Page 9: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

The Era of Big Data

A Complex Network of Over

1 Trillion Devices

Generating 2.5 Billion

Gigabytes of Data Daily

Structured

Un-Structured %

%

The Era of Big Data

9

Page 10: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

Resources

Strategy

Tactics

Best Practices

Supply Chain

Asset Management

Operational Management

Marketing

Sales

Financial Management

Risk & Compliance

Claims

Distribution Advantage

Differentiation

Profitable Growth

Analytics Create Actionable Insight Analytics Create Actionable Insight

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Page 11: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

Bu

sin

ess

Va

lue

11

Descriptive

Predictive

Prescriptive

Cognitive

Reporting

Last quarter’s results

Analysis

Product profitability

Discovery

# security

breaches this

month vs. last

Alerts

Unusual activity

Forecasting

Trending analysis

Simulation

Impact of rising

rates

Modeling

Predicting elasticity

of insurance rates

Optimization

Highest

returning

portfolio based

on risk appetite

Stochastic

Optimization

Managed

exposure

to Cat Risks

Understands

natural

language,

hypothesizes,

adapts &

learns

The Fourth Age of Analytics

Page 12: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

By 2020…

‘50% of all businesses will be making

decisions using artificial intelligence and

prediction’ Gartner

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Page 13: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

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An Enterprise View on Analytics is Essential

Risk Appetite and

Solvency Optimisation

Underwriting

And Pricing

Marketing

and Distribution

Servicing including

Claims Management

Asset and

Supply Chain Management

Page 14: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

Converged Insights are Critical

Business data, weather data, location data, contextual data,

via analytics

will transform Enterprise-wide decision making

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Page 15: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

What will Your Future World Look Like ?

Redesigned business models

New skills, roles and professions

Different organisational Structures

New styles of leadership

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Page 16: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

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Technology Talent

Management

Implementation Leadership

Four Key Building Blocks of Change

Page 17: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

About me:

“passionate about data and the application of mathematical and statistical techniques to solve real business problems”

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Page 18: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

-2

0

2

4

6

8

8 8.4 8.8 9.2 9.6

Revenue Growth

%

Journey Satisfaction 2011

Revenue Growth % - Insurance Industry 2011 v 2010

Company

Name

K

N

C M

E B

A

Journey Satisfaction impacts Revenue Growth

Average of satisfaction with each company’s three key journeys

Source 2011 McKinsey Multi-Industry Survey company financial statements

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Page 19: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

Success Stories

• Improve key to key KPI

performance

• Reduce claims cost

• Increase customer attrition

• Increase customer

satisfaction

BES (Banco Espirito Santo)

reduced attrition by

15-20%

FBTO increases marketing

ROI by 29%

ING Reduced Call Centre

Costs by 20-40%

Infinity Insurance increased

subrogation recoveries by $12m

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Page 20: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

Analysis & Monitoring

Predictive Analytics

Prescriptive Analytics

Reporting

What happened?

Why did it happen?

What will happen?

What should I do

next?

What is Predictive Analytics? The right solution for the right business problem

20 ©Copyright Presidion Ltd. 2016

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Page 21: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

The Predictive Insurance Company

21

Behavioural/Descriptive

Information

•Claim History

•Call Centre Interactions

•Online Activity

•Product Information

•Demographics

Attitudinal Information

•Complaints

•Surveys

•Call Centre Notes

•Emails

Claims Processing

Supplier Analysis

Complaints

Customer Retention

X X √

Up-Sell/Cross Sell

Risk

Customer LTV

External data

•Weather data

•Social Media data

•Regulatory Information

Page 22: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

Your customers

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Page 23: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

The Predictive Insurance Company

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Behavioural/Descriptive

Information

•Claim History

•Call Centre Interactions

•Online Activity

•Product Information

•Demographics

Attitudinal Information

•Complaints

•Surveys

•Call Centre Notes

•Emails

Claims Processing

Supplier Analysis

Complaints

Customer Retention

X X √

Up-Sell/Cross Sell

Risk

Customer LTV

External data

•Weather data

•Social Media data

Page 24: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

Improving the Claims Handling Process

First

notification

of loss

Request

additional

information

Fast Track

Escalation

Suspect

Service :

Fast Track

Go through regular

processing and assignment

Refer to SIU

PA

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Page 25: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

Predictive Analytics and the Claims Process

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Page 26: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

Example – Motor Claims Process

Meet Michael Jones:

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Page 27: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

Michael’s Experience

• Michael calls Insurance Company

• Sarah asks some questions

Autocorrect Garage

• Michael’s car is fixed

• Michael is a happy customer

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Page 28: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

Sarah’s Experience

• Sarah takes a call from Michael

• Sarah is prompted by the system to ask certain questions

Autocorrect Garage

• Sarah tells Michael where to bring his car to be fixed

• Sarah is confident she has dealt with Michael efficiently and correctly

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Page 29: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

78%

• Michael makes contact with his insurance company – he damaged the front bumper of his car when he veered off the road

• Sarah is the claims handler dealing with his call

Predictive Analytics at work

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Page 30: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

78%

• Michael makes contact with his insurance company – he damaged the front bumper of his car when he veered off the road

• Sarah is the claims handler dealing with his call

83%

• Prompted by the system Sarah asks Michael were there any witnesses to the accident.

• Michael says yes, the car behind him stopped to see if all was okay and gave Michael his name and number

Predictive Analytics at work

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Page 31: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

78%

• Michael makes contact with his insurance company – he damaged the front bumper of his car when he veered off the road

• Sarah is the claims handler dealing with his call

83%

• Prompted by the system Sarah asks Michael were there any witnesses to the accident.

• Michael says yes, the car behind him stopped to see if all was okay and gave Michael his name and number

91%

• Again, prompted by the system Sarah asks Michael was anyone injured in the accident.

• Michael replies no, there were no injuries.

Predictive Analytics at work

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Page 32: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

78%

• Michael makes contact with his insurance company – he damaged the front bumper of his car when he veered off the road

• Sarah is the claims handler dealing with his call

83%

• Prompted by the system Sarah asks Michael were there any witnesses to the accident.

• Michael says yes, the car behind him stopped to see if all was okay and gave Michael his name and number

91%

• Again, prompted by the system Sarah asks Michael was anyone injured in the accident.

• Michael replies no, there were no injuries

91%

• Sarah is directed by the system to fast track Michael’s claim and information relating to most appropriate garage is relayed to Michael

Predictive Analytics at work

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Page 33: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

Michael’s Options

Approved

Repairer

Average

Lead Time

Average

Repair

Time

Average

Satisfaction

Score

Distance

NPS

Autocorrect

Garage 3 days 4.5 days 89% 3 miles High

Repair

Centre 5 days 4 days 74% 2.5 miles Mid

BRC 7 days 5 days 71% 1.5 miles Low 33

Page 34: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

Real Time Front End System

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Page 35: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

Without Predictive Analytics With Predictive Analytics

Call Received

Agent Inputs

Claims

Claim

Classification

Documents

Sent

Claims

Handler

Clarification

Call

Repair

Approval

Garage

Waiting List Resolution

Call Received

Agent Inputs

Claims

Claim

Classification

Repair

Approval Resolution

Request further

information

Time to resolution: 2 Weeks

Number of contacts: 2

Predicted claim duration

Recommended fast track

Supplier Analysis

Time to resolution: 3 Days

Number of contacts: 1

Benefits of Predictive Analytics

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Page 36: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

Unstructured Data? – Text Analytics

What do your customers

really think?

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Page 37: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

Journey-led transformations deliver impact across

multiple dimensions

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Page 38: Predictive Analytics in Insurance Getting it right when ... · Using Predictive Analytics to drive customer experience and increase ... Lead Time Average Repair Time Average Satisfaction

Questions and Answers

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