CIA Annual Meeting Assemblée annuelle de l’ICA June 29 & 30, 2006 ŸLes 29 et 30 juin 2006 Ottawa, Ontario Business Intelligence in the Insurance Industry
What are the goals of this session ? • To give you reference points regarding: –What is Business Intelligence and how it applies to the insurance industry; –Who are the actors involved in a successful BI program ? –How to triangulate your company’s Business Intelligence position. Business Intelligence in the Insurance Industry
CIA Annual Meeting Ÿ Assemblée annuelle de l’ICA Agenda Defining Business Intelligence The Actors of Business Intelligence Examples of BI for the Insurance Industry The Insurance BI Roadmap Introspection: recognising where you stand Q&A Business Intelligence in the Insurance Industry
Defining Business Intelligence The term Business Intelligence (BI) represents the tools and systems that play a key role in the strategic planning process of the corporation. These systems allow a company to gather, store, access and analyze corporate data to aid in decision-making. Generally these systems will illustrate business intelligence in the areas of customer profiling, customer support, market research, market segmentation, product profitability, statistical analysis, and inventory and distribution analysis to name a few. Business Intelligence in the Insurance Industry
Defining Business Intelligence The term business intelligence (BI) typically refers to a set of business processes for collecting and analyzing business information. This includes the technology used in these processes, and the information obtained from these processes. Competitive organizations accumulate business intelligence in order to gain sustainable competitive advantage, and may regard such intelligence as a valuable core competence in some instances. Business Intelligence in the Insurance Industry
Defining Business Intelligence The primary goal of Business Intelligence is to provide accurate, complete and integrated information to organizations, so they can use it to achieve superior performance. Business Intelligence lets you gain the visibility necessary to pinpoint inefficiencies as well as the capability to transform these into competitive advantages. It also provides your organization with the ability to identify new opportunities and the agility to respond to changing business realities. Finally, Business Intelligence optimizes every aspect of your operations to deliver maximum value throughout your entire value chain. Business Intelligence in the Insurance Industry
Defining Business Intelligence • The three perspectives of Business Intelligence –Business; –Technology and Infrastructure; –People and process. Business Intelligence in the Insurance Industry
The Business Perspective Develop Business Strategies • Markets • Products • Channels • Financial • Customers Manage Insight & Knowledge • Trends • Compliance • Experiment • Mine • Development Support Information Requirements • CIF • BI • Process • Distribution • Ad-Hoc Business Intelligence in the Insurance Industry
The Technology and Infrastructure Perspective Data Acquisition & Integration Staging Enterprise DW Data Marts Reporting & Analytics Source Systems Data Access & Information Management Source Systems Data Delivery Policy Claims Data Interface Investments Others Business rules Security Load Validation Metadata management Business Intelligence in the Insurance Industry BI Metadata
The People and Process Perspective Business Users Information Managers Information Technology Business Intelligence in the Insurance Industry
CIA Annual Meeting Ÿ Assemblée annuelle de l’ICA Agenda Defining Business Intelligence The Actors of Business Intelligence Examples of BI for the Insurance Industry The Insurance BI Roadmap Introspection: recognising where you stand Q&A Business Intelligence in the Insurance Industry
Information Consumption The Business User • If you are a Business User, you certainly want to use information in support of your business strategies and you see value in doing so. You are an information consumer. Business Intelligence in the Insurance Industry
Information Consumption The Business User - Challenges • Gleaming information from data is difficult –How are renewal rates? –Where can I steer the broker channel? • Analyzing the details requires many cycles and much effort; –How am I performing with my commercial float line of business? • Information is inconsistent across the enterprise. –Why is your experience ratios different than marketing’s ? Business Intelligence in the Insurance Industry
Information Consumption Management Information Systems • If you are a member of the Management Information Systems team, your responsibility is to provide information, based on company data, to the Business Users. Although you are not expected to be technical experts, you need to understand technology and the company’s data and are often characterized as Power Users or information producers. Business Intelligence in the Insurance Industry
Information Consumption The MIS User - Challenges • The systems in place do not enable a quick turn around of demands from Business Users; • Mapping the business requirements to the data is cumbersome and requires many cycles of extraction and assembly; • You are spending 80% of your time assembling rather than analyzing data. Business Intelligence in the Insurance Industry
Information Consumption Information Technology • If you are a member of the Information Technology team, you have strong technical expertise and understand the company’s data and the architecture of both operational and decision support systems. Your concerns are with how the systems are architected, developed and supported. You need to understand the technical merits of a buy or build solution to support the demands of the MIS team. Business Intelligence in the Insurance Industry
Information Consumption Information Technology - Challenges • The decision support systems in place present a severe operational risk as they are convoluted and are a patch work of dozens of data bases, file extracts, code and reports; • You are spending a lot of effort in “keeping a lid” on demands from the MIS team that often turn into urgent requests and cannot evolve the decision support systems as quickly as the business would like to; • More often than not, you spend more resources implementing a new product in the decision support system that you do on operational support systems. Business Intelligence in the Insurance Industry
The Actors of Business Intelligence • Do you recognize yourself in this Shakespearian Play ? –Are you a Business User ? –Are you a MIS team member ? • Is there such a group in your respective organisations ? • Are you a Power User ? –Are you an IT team member ? • Do you sometimes feel that you act like one ? Business Intelligence in the Insurance Industry
CIA Annual Meeting Ÿ Assemblée annuelle de l’ICA Agenda Defining Business Intelligence The Actors of Business Intelligence Examples of BI for the Insurance Industry The Insurance BI Roadmap Introspection: recognising where you stand Q&A Business Intelligence in the Insurance Industry
Examples of BI for the Insurance Industry • Business Intelligence Jeopardy –Which industry segment has the most interest in deploying Business Intelligence ? • Life & Investments ? • Property & Casualty ? • Group Benefits ? • Re-insurance ? • Brokers ? • Survey says… Business Intelligence in the Insurance Industry
Why do insurance companies invest in BI ? • Business cases widely vary. • They may have to do with: –Reduction of operation risks; –Speed of market response; –Broker relationship management; –Client Relationship Management; –Exploiting opportunities for expense reduction; • Can you think of more ? Business Intelligence in the Insurance Industry
Examples of BI for the Insurance Industry Broker Management • A subject area that supports the analytical requirements for the enterprise to be able to analyze and report on brokers from all product lines. • The benefits include the ability to drive broker relationships based on accurate, timely information. Business Intelligence in the Insurance Industry
Examples of BI for the Insurance Industry Regulatory Filings • A subject area that supports the analytical requirements for the enterprise to be able to produce regulatory filings to such organizations like IBC, auditing firms, and any other filings needed by the company. • The benefits include the streamlined filings of electronic/paper copies of reports and reduction of erroneous filings. Business Intelligence in the Insurance Industry
Examples of BI for the Insurance Industry Risk Attribute Variance Analysis • An actuarial requirement for tracking changes over time of a set of risk attributes i. e. , how rating attributes changes affect the experience. • The benefits include the ability to track the evolution of a risk profile over time. Business Intelligence in the Insurance Industry
Examples of BI for the Insurance Industry On Level Analysis • An actuarial requirement to perform current book of tariff analysis on underwritten risks, keeping a history of on level premium values over time. • The benefits include the ability, within pricing projects, to perform variance analysis of historical and on level experience. Business Intelligence in the Insurance Industry
Examples of BI for the Insurance Industry Case Study #1: The situation Having grown trough acquisition over the last 10 years, the company had an amalgam of operational support systems feeding a mainframe based static reporting system. The system produced month-end paper based reports that were distributed to all 40 locations across the country. The system was expensive to maintain, did not allow users to perform any kind of analytics and bringing online a new data source (stemming from one of the multiple acquisitions) was very difficult. Business Intelligence in the Insurance Industry
Examples of BI for the Insurance Industry Case Study #1: The solution • The company implemented a Business Intelligence infrastructure and built a central enterprise data warehouse for consolidating and reporting on premiums and sales information. • The company has now retired their mainframe based paper reporting system: –Turn around time for information is much quicker; –They are closer to the famed “single version of the truth”; –They can integrate new data more easily. Business Intelligence in the Insurance Industry
Examples of BI for the Insurance Industry Case Study #2: The situation The company has built over the past decade a management information infrastructure to support its strategic decision making process. However, the infrastructure had grown convoluted and inflexible and needed to be re-designed to meet the growing need for information on a company wide basis. The current system also represented a significant operational risk to the decision making process. Business Intelligence in the Insurance Industry
Examples of BI for the Insurance Industry Case Study #2: The solution • The company is currently implementing a Business Intelligence infrastructure that will greatly simplify the current reporting infrastructure. • The system is being rolled out by product line and subsidiary. • The company expects: –To lower the operation risk of the current reporting system; –Actuarial to have their own “sand box” for their specific requirements; –To use the common data infrastructure to support all reporting and analytical requirements by implementing application specific data marts. Business Intelligence in the Insurance Industry
CIA Annual Meeting Ÿ Assemblée annuelle de l’ICA Agenda Defining Business Intelligence The Actors of Business Intelligence Examples of BI for the Insurance Industry The Insurance BI Roadmap Introspection: recognising where you stand Q&A Business Intelligence in the Insurance Industry
The Insurance Business Intelligence Roadmap • This roadmap proposes a set of milestones that an insurance company should follow when structuring its Business Intelligence Programs. • It is derived from our experience, our research and development and from market observations. Business Intelligence in the Insurance Industry
The Insurance Business Intelligence Roadmap Business Intelligence in the Insurance Industry
The Insurance Business Intelligence Roadmap Step #1: Integrate and Warehouse Data This is the very first thing that needs to happen in the realization. It is the foundation on which everything else relies. Business Intelligence in the Insurance Industry
The Insurance Business Intelligence Roadmap Step #2: Analyze, Produce and Consume Information Once the foundation is in place, the business can now start doing this and become proficient with managing information. Business Intelligence in the Insurance Industry
The CIF: supports Steps 1 and 2 !!! Data Acquisition & Integration Staging Enterprise DW Data Marts Reporting & Analytics Source Systems Data Access & Information Management Source Systems Data Delivery Policy Claims Data Interface Investments Others Business rules Security Load Validation Metadata management Business Intelligence in the Insurance Industry BI Metadata
The Insurance Business Intelligence Roadmap Step #3: Model and Simulate Transactions Once information management is mastered, the enterprise can now enter into an area of predictive analysis and transaction modeling. Business Intelligence in the Insurance Industry
The Insurance Business Intelligence Roadmap Step 3 Example: On Level Analytics OLA metadata Source Systems Data Load Interface Claims Rates Policies Claims OLA Server OLA Rating Queue OLA Data Mart Reporting DW Others Brokers Rating Process Drivers Policies Rating Processes Rules Engine Spreadsheets BI Tool Business Intelligence in the Insurance Industry
The Insurance Business Intelligence Roadmap Step #4: Manage and Refine Business Knowledge At this stage, the Enterprise can start documenting and modeling knowledge that gives it a strategic differentiation. Business Intelligence in the Insurance Industry
The Insurance Business Intelligence Roadmap Step #4: Manage and Refine Business Knowledge Imagine an environment where rules are created, managed and tested against internal and external data: Rule #1: When the price of gas increases, the loss ratio decreases External data provider Correlation Operator Business Intelligence in the Insurance Industry Internal data provider
The Insurance Business Intelligence Roadmap Step #4: Manage and Refine Business Knowledge Such an environment is at the cross roads of many existing technologies. It isn’t that too far fetched nor is it far off into the future… Business Intelligence in the Insurance Industry
CIA Annual Meeting Ÿ Assemblée annuelle de l’ICA Agenda Defining Business Intelligence The Actors of Business Intelligence Examples of BI for the Insurance Industry The Insurance BI Roadmap Introspection: recognising where you stand Q&A Business Intelligence in the Insurance Industry
Recognising where you stand • Actuaries have a strong influence over Business Intelligence projects for the enterprise –They understand data and all its derivations; –They understand business rules; –They understand how to manipulate data. • However, Business Intelligence is more than –The actuarial database; –Procedural programming with sequential data sets; –Impossibly large reports containing many metrics! Business Intelligence in the Insurance Industry
The Business Perspective • Do you rely on your data to make strategic and tactical decision ? • Would you be able to answer “any questions” regarding the performance of a line of business or distribution channel ? • Can you drive dynamic broker relationships based on Business Intelligence about them ? • Do you view your decision support systems as a growing operational risk ? Business Intelligence in the Insurance Industry
The Technology and Infrastructure Perspective • Do you have a single, integrated source for decision support data ? • Can you easily create new analytical data structures of varying dimensionality and granularity ? • Do you have auditable data integration processes ? • Do you have metadata that defines all metrics, attributes and derivations ? Does everyone agree on the definitions ? Business Intelligence in the Insurance Industry
The People and Process Perspective • Do you consider that a particular group “owns” the corporate data ? • Is there a centralised, multi-disciplinary group responsible for information production ? • Do you have a Management Information component to all your corporate projects ? • Do you have an executive level steering committee driving Business Intelligence ? • Is Business Intelligence considered an IT project ? Business Intelligence in the Insurance Industry
Thank you! Philippe Torres President www. sqliaison. com Philippe. Torres@sqliaison. com Business Intelligence in the Insurance Industry
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