Business Intelligence Solutions for the Insurance Industry DAT – 13 Data Warehousing Rasool Ahmed.

Business Intelligence Solutions for Business Intelligence Solutions for the Insurance Industrythe Insurance Industry

DAT – 13 Data WarehousingDAT – 13 Data WarehousingRasool AhmedRasool Ahmed

©2000 Thazar Solutions Corporation

Business IntelligenceBusiness Intelligence

Questions:

• BI - What is it?

What would I do with it?

Why do I need another system to do it?

• BI supplier selection evaluation criteria.



•Executive Analysis•Query•Reporting•Data Mining

OperationalOperationalData SourcesData Sources

•Claim•Sales & Marketing•Financial•Underwriting•Third Party Data•Other Int. Systems

Access

LoadTransform

Extract

Data WarehouseData Warehouse•Multi-Company•Multi-Line•Multi-Source•Multi-Dept/Function•Transaction Level

PolicyJ BrownFemale

July 20, 1945Financial Consultant

Claim

Judy BrownOne Claim Filed

CWP

MVR

Brown, Judy AnnTwo Tickets 1999

One DUI

External

Judy JacksonGood Credit HistoryIncome > 100,000

Judy Ann BrownFemale

July 20, 1945Financial ConsultantGood Credit History

Income > 100,000One Claim Filed

Closed Without PaymentTwo Tickets 1999

One DUI


BI - What would I do with it?BI - What would I do with it?

•Interactive•Intuitive•Mgt Review

Exec / Mgt ProfilingExec / Mgt Profiling

Detailed AnalysesDetailed Analyses

•Loss Triangles•Risk Assessment•New Business•Exposure Evaluation

Data ModelingData Modeling

•Pattern Recognition•Predictive Modeling•Risk Scoring“Fraud with 85% accuracy”

“…predict with 82% accuracy those customers thatWill cancel their policies.” “… The special Investigation Unit can now prioritizeand catch 66% more fraudulent claims per referral.”


What can do with it?•Executive Browser


Why do I need another system to do it?Why do I need another system to do it?

• Data organized for OLTP, not analysis

• Inability to slice and dice – geared for management reports

• Unintelligible coding structures; no meta data

• Not a complete picture (multiple systems); can’t merge

• Inability to augment data

• 87% of all insurance master files are non-relational

• Inability to profile trends



•Executive Analysis•Query•Reporting•Data Mining

Insure MartsInsure Marts™™•Corporate Detail•Corporate Summary•Line of Business

Insurance WarehouseInsurance Warehouse™™•Policy•Claim•Rating

Data SourcesData Sources•Claim•Sales & Marketing•Financial•Underwriting•Third Party Data•Other Int. Systems

•Reinsurance•And more

Access

LoadTransform

Extract

Aggregate

InformationInformationsource datasource data

provided byprovided byinsurerinsurer

InsightInsightknowledge knowledge

& insight & insight gathered by gathered by

insurerinsurer

solu

tions

pro

vide

d by

Tha

zar



How Much?

199X 2000

$$ $3+ M 1/4% NWP

Time > 3yrs 3 – 5 months

Function Reports Profiling/Predictions



For Example…….:

Fraud Detection Losses are 70% of NWP; 10-20% of Losses are Bad FaithIdentifying <4% of Bad Faith claims pays back cost of DWH

RetentionPoor Average Good 25% 35% 45% (after 4yrs)

|----------------------------------- (2%) Loss Ratio |----------------- (1 ½%) Loss Ratio

Increasing Retention by 1 ½% pays back cost of DWH (reduced losses only)

New BusinessCosts of Sales can vary from 5% to 20% of NWPMoving 5% of business to channel that is 5% more efficient pays back cost


Better Qualityof Data

35%Better Understanding

of the Business

20%

More TimelyDecisions

30%Exploit New Market

Opportunities

15%

Meta Group Survey of 300 Companies Implementing Warehouses

Over 400% ROI in less than 3 years!

Why Companies are DoingWhy Companies are DoingBusiness IntelligenceBusiness Intelligence


Revenue Growth / Expense Control

• Questions You Need Answered Now

• Questions You Have Not Thought About

• Acquisitions

Why Companies are DoingWhy Companies are DoingBusiness IntelligenceBusiness Intelligence


Personal Auto – Retention AnalysisPersonal Auto – Retention Analysis

• Policy Holder Characteristics• Loss Attributes• Policy Attributes• Distribution Analysis• Dimensions


Homeowners – New Business AnalysisHomeowners – New Business Analysis

• Policy Level Analysis• Risk Characteristics Analysis• Home Feature Analysis• Time Views


Engagement OverviewEngagement Overview

• wk 1-2 Plan / Organize• wk 3-4 Data Analysis Workshop• wk 5-7 ETL Development• wk 8-9 Test & Balance• wk 10-11 Load Warehouse & Marts• wk 12 Go Live


Implementation Roles / Implementation Roles / ResponsibilitiesResponsibilities

BI Solutions Provider

• Project Manager

• Business Analyst*

• Data Analyst*

• Technical Analyst

* Insurance knowledge & experience is critical

Client

• Project Manager

• Business Analyst

• Data Analyst


Supplier Both You

Executive Sponsorship & Vision

Functional Executive commitment

Information Systems Team involvement

BI Insurance Experience & Methodology

Pre-defined Models, Templates, Marts

& Executive / End User Browser

Critical Success Factors...Critical Success Factors... Critical Success Factors...Critical Success Factors...


Critical Success Factors...Critical Success Factors... Critical Success Factors...Critical Success Factors...

Supplier Supplier BothBoth

YouYou

Scope & definition study - phased Implementation Scope & definition study - phased Implementation

Expectations & Results understoodExpectations & Results understood

Business & I/S experts to implement Business & I/S experts to implement

Training and skills transfer Training and skills transfer

Easily Supported & MaintainedEasily Supported & Maintained

Add additional departments, enhancementsAdd additional departments, enhancements

& applications& applications


Lessons LearnedLessons LearnedLessons LearnedLessons Learned

Don’t:• build “boil the whole ocean”

• oversell to end-users

• build something that can’t be maintained and extended

Do:• start small “phased” - prioritization by LOB

• ensure data has integrity and is balanced

• define measurable objectives Keep At It !!!• deliver “baseline” results early & continue to build

Rasool AhmedRasool AhmedThazar Solutions CorporationThazar Solutions Corporation

[email protected]

Business Intelligence Solutions for the Insurance Industry DAT – 13 Data Warehousing Rasool Ahmed.

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