1

Text and Predictive Analytics

2

Analytic Value Efforts

Reporting = “Having the data”Timeliness and accuracyReports and TablesSurfacing data with agility

Descriptive Analyses = “Seeing the data”Scorecards / MeasurementsProfiles and ExceptionsSegmentation

Analytic Modeling = “Knowing the data”Understand TrendsEvaluate Business PracticesChoice Models and “What ifs”

Predictive Analytics = “Acting on the data”Informed decision-makingActionable Information Engines

3

Convergence of Disciplines Example

Never stop learning

4

Structured dataSemi-structured dataUnstructured dataTextSpatialPictographicGraphicVoiceVideo

Data Types and FormsData Types and Forms

5

The Evolving World of DataThe Evolving World of Data

Web ofKnowledge

HyperText Markup Language (HTML)

HyperText Transfer Protocol (HTTP)

Resource Description Framework (RDF)eXtensible Markup Language (XML) Self-Describing Documents

Formatted DocumentsFoundation of the Current Web

Proof, Logic andOntology Languages(e.g., DAML+OIL)

Shared terms/terminologyMachine-Machine communication

1990

2000

2010

Based on Berners-Lee, Hendler; Nature, 2001

6

The DRM Education PilotThe DRM Education Pilot

Source: Mills Davis, “Smart Search Continuum” in DRM Implementation - Preliminary Strategy, October 11, 2005. DRM = Data Reference Model

7

Data

Archive,Legacy Systems

Current System Claim

Multiple StatesBilling SystemsFinance SystemsCRM Systems, other data

PolicyMultiple Underwriting Systems

Medical Data - Bill Review - PPO - Case Management - Paradigm

Multiple Data Systems which must be pulled together for analysis. Great opportunity for cross-validation and sourcing

• Identify Data Systems• Get right data from right systems• Overcome internal Organizational Barriers• Bridge to legacy systems and archived data• Augment to create rich data mining environment• Expect the need to negotiate for resources

ACTIONS

Vendors/Partners

External Data

8

Sales and Distribution

Producer SegmentationMarket PlanningRevenue ForecastingCross sell and Up sellRetention and Profitability

Underwriting

Risk Selection and PricingPortfolio ManagementPremium AdequacyBilling and Collections Management

Claims

Payment AccuracyClaim Collaboration > Fraud Detection > Subrogation > Risk Transfer > 3rd Party Deductible > Reinsurance Recoverable

General Organizational OverviewAn information business focused on risk taking.Make. Sell. Serve.

9

Policy processing – Underwriting notes and DiariesPolicy processing – Underwriting notes and Diaries

DESK UNDERWRITER

•D&B Data•ISO Data•Application information•Claim loss runs•Hazard mappings•Concentrations of Staff•Premium Auditors•Renewal processing•Legal Staff•…others

•Home Office Staff•Field Office UW Staff•Insured Risk Manager•Agent or Broker

•Diary forward – “call Agency next week”•Business Rule – large loss review•System Reminder – update renewal pricing•Correspondence Tracking – legal letter sent

Make

10

Customer Management – Contact notes and DiariesCustomer Management – Contact notes and Diaries

ACCOUNT MANAGER

•Voice of the Customer•Customer Feedback•Call Center Notes•Agent Contacts•Billing Systems•Deductible Processing•Premium Auditors•Renewal processing

•Company-wide Sales Staff•Product Manager•Insured Risk Manager•Agent or Broker

•Diary forward – “call Mr Jones tonight”•Business Rule – DOI Complaint handling•System Reminder – Visit with Client•Correspondence Tracking – legal letter sent

Sell

11

Claims processing – Progress notes and DiariesClaims processing – Progress notes and Diaries

CLAIMSADJUSTER

•Medical Management Staff•Special Investigation Unit•NICB•Vendor Management•Consulting Engineers•Hearing Representative •Structured Settlement Unit•Recovery Staff•Legal Staff

•Home Office Staff•Field Office Claim Staff•Insured Risk Manager•Agent or Broker

•Diary forward – “call Dr Jones next week”•Business Rule – large loss review•System Reminder – update case reserves•Correspondence Tracking – legal letter sent

Service

12

Accident: 170824130 - Employee Injured In Fall From Second-Floor Decking

Inspection Open Date SIC Establishment Name

127366367 07/29/1996 1521 xxxxxxxxxxxxxxxxxxxxxxxx

Employee #1 was atop of the second floor decking of a newly constructed home, connecting frame work for a wall. He fell 18 ft 6 in., sustaining injuries that required hospitalization. Employee #1 was not tied off, nor were any other means of fall protection in use. He had not been trained in working from an elevated work surface, the company did not have a written safety program, and regular inspections were not performed. Keywords: decking, fall, tie-off, untrained, work rules, fall

protection, construction

Inspection Age Sex Degree Nature Occupation

1 127366367

29 M Hospitalized injuries

Cut/Laceration

Carpenters

Source: U.S. Department of Labor Occupational Safety & Health Administration

Accident Report Detail Accident Investigation Summaries (OSHA-170 form) which result from OSHA accident inspections.

See for yourself ---The importance and relevance of text

not tied off, nor were any other means of fall protection in use.

He had not been trained in working from elevated work surface

the company did not have a written safety program, and

regular inspections were not performed.

13

Same Problems – Different Lines of BusinessSame Problems – Different Lines of Business

• Personal – Auto, HO, Umbrella

• Small Commercial – BOP, CPP

• Middle Market Commercial – CPP w/GL, CP, Crime, CIM, B&M, WC, Auto

• Large Commercial Accounts

• Commercial Auto

• Workers Comp

• Umbrella/Excess

• Specialty Lines – D&O, EPL, E&O, Farm, FI

• Personal – Auto, HO, Umbrella

• Small Commercial – BOP, CPP

• Middle Market Commercial – CPP w/GL, CP, Crime, CIM, B&M, WC, Auto

• Large Commercial Accounts

• Commercial Auto

• Workers Comp

• Umbrella/Excess

• Specialty Lines – D&O, EPL, E&O, Farm, FI

14

Predictive Modeling Projects you should do

Loss Control

Fraud PreventionProperty InspectionsAssess Work sitesRe-underwriting

Cost Avoidance

Automate Manual WorkAppetite QualificationUnderwriting GuidesRedundant ProcessesVendor SourcingSpend Analysis

Cash-flow Opportunity

SubrogationCredit to LossThird Party DeductiblePremium Audit (Comm) Account Identification Audit OrderingInsured to Value (PI)

Better DecisionMaking

Risk Selection Renewal (Attrition) New (Acquisition)Cross-sell & Up-sellPortfolio ManagementBroker/Agent ProfilesMedical ManagementLitigation ManagementLarge Loss ReservingImproved Collaboration

15

The Challenge: