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CONFIDENTIAL CONFIDENTIAL
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
Cognitive Computing in Insurance
…5 key forces are changing the landscape of Insurance
Rising customer expectations
$ Low interest rate
Sophisticated fraud
Changing demographics
Rapid digitization
Cognitive Computing in Insurance
© 2015 International Business Machines Corporation
Cognitive Computing in Insurance
Pushing the current boundaries of:
Innovation
Growth
© 2015 International Business Machines Corporation
Cognitive Computing in Insurance
Helps focus on improving:
Engage
Discover Decide
© 2015 International Business Machines Corporation
Cognitive Computing in Insurance
Cognitive systems facilitate
Decision making
Reduce human bias
Scale Expertise
CONFIDENTIAL CONFIDENTIAL
CONFIDENTIAL CONFIDENTIAL
What is Watson ?
© 2015 International Business Machines Corporation
© 2015 International Business Machines Corporation
IBM Watson is a technology platform that uses natural language processing and machine learning to reveal insights from large amounts of unstructured data
Cognitive Computing in Insurance
Understands natural language
Generates and evaluates hypotheses
Adapts and learns
Cognitive Computing in Insurance
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
Cognitive Computing in Insurance
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
© 2015 International Business Machines Corporation
Cognitive Computing in Insurance
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
Cognitive Computing in Insurance
Characteristics that represent good uses of Watson:
© 2015 International Business Machines Corporation
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 Computing in Insurance
© 2015 International Business Machines Corporation
Cognitive in Insurance
Cognitive Computing 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.
© 2015 IBM Corporation
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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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Cognitive Computing in Insurance
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
Cognitive Computing in Insurance
Transform Underwriting Make existing decisions smarter by incorporating insights from unstructured data
Underwriter
Review Application Completeness
Review and Apply Underwriting Guidance
Recommend Underwriting Decision
© 2015 IBM Corporation
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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Cognitive Computing in Insurance
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
Cognitive Computing in Insurance
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
Cognitive Computing in Insurance
© 2015 International Business Machines Corporation
Customer Self Service
Insureds
Producers
Field Staff
Cognitive Computing in Insurance
Informed Interactions –
© 2015 International Business Machines Corporation
Other Insurance Areas of Focus
Claims Adjusting
Producer Effectiveness
Marketing Optimization & Customer Insight
Legal Risk & Exposure
Policy Language – Legal Interpretations
Cognitive Computing in Insurance
Cognitive Computing in Insurance
http://www.ibm.com/analytics/watson-analytics/
IBM Watson Analytics for Insurance
© 2015 International Business Machines Corporation
Cognitive Computing in Insurance
ibm.biz/cognitive-future-insurance-ibv
Cognitive Computing in Insurance
For more information
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© 2015 International Business Machines Corporation
What will you do with IBM WATSON ?
Cognitive Computing in Insurance