Advanced Analytics

Driving forAdvanced Analytics

with Joe Brandenburg

Operational and

MarketData Analytics

Long-TermProfitability

Advanced

Analytics

Tracking

and

Targeting

YOU

ARE H

ERE

Oper

ation

al

Trac

king

and

Scor

ing

The First Step in “Solving” is “Knowing” what the issues Are!!!

Then Finding way to Improve

Building the “Knowing”

Background and Capabilities

ITProgramming, Project

Management andReporting and Analytics

Tool Design12 years

Accounting, Actuarial and FinanceReporting, Process Development and Management

Reporting11 Years Financial Services

9 Years Personal Lines5 Years PNC

3 Years Health

Marketing and StrategyResearch – Marketing, Competitive Intelligence, Analytic

Modeling, Pricing11 Years

Leadership and Mentoring

8 years direct management and 12

years project leadership

Analytics

Background

Technical Capabilities

• Programming SAS Mainframe and PC SAS for 12 years hands-on, JCL, JES2, Sync sort

• Excel complex from Pivot tables to the Solver• MS Access, Word, PowerPoint• SQL Server, Oracle, Sybase 12 years

– Database design, normalization, stored procedures, DTS, analysis services

– Indexes, and optimization

Ability to Sell the Right Mix of Support, Analytics, Research, and Analysis

• Typical Tactic is to offer support and provide request fulfillment and then go beyond to show additional opportunity and insight through Analytics, Research and Analysis in a teaching and partnership fashion

•Ability to speak to and work with all areas from spending time in and with all areas front to back in financial services organizations

Analytic Capability Framework

Custom ResearchConcept Tests (Quant or Qual)Key Driver AnalysisConjoint Analysis and Consumer

Preference (Product Design, Ad Copy, pricing,

segmentation, forecasting)Customer Satisfaction (Loyalty,

Defection, Net Promoter)Simulated Test MarketsBrand Equity and Brand

Assessment Uniqueness, Attractiveness,

Relevance, Credibility Promotion, Channel, Web Metrics

Customer and Product Profitability(CLV, Persistency, and Activity Based Costing)

Pricing (Risk, Market Based, Elasticity)

Acquisition Costs and Retention Costs

NPV, IRR, ROI, Payback PeriodUnderwriting performance

and results tracking

Marketing Financial

Analytic and Research

Objectives (Examples)

Increase P&C Sales by market expansion, channel development 25%

Improve Customer Satisfaction to 95%

Reduce Churn by 18%

Develop product packages, up-sell and cross-sell tactics

How Do I improve my Customer

Satisfaction?

When should I contact

customers and what message to get them to stay?

What Products and

Combinations do people want?

Where is there opportunity for me to expand?

How can we get there?

Building a Strategy of Attack

Building a Strategy of Attack• Phase I: Development of Baseline

– Determine low hanging fruit: Easy low cost changes that will have big impact to the business

• Phase II: Integration of Baseline, Outside Data and New Collection Methods

• Phase III: Building tools to influence market expansion, automation, product design and pricing changes

• Phase IV: Measure results of company efforts through reporting, dashboards and developed algorithms

Phase I: Development of Baseline

Evaluating the BusinessDevelopment and Potential

Phase I: Development of Baseline

– Current Reporting Capability, Models, Data and SWOT• Operational Analytics Reviews

– Underwriting, Accounting (Statutory and GAAP), Pricing, Reserving (Case and IBNR)

– Development of automation and key profitability driver models– Evaluation of demographics and geo-demographic factors that

impact retention, messaging and best customers (High Value/Low carrying cost)

• Marketing Analytic Reviews– Competitor Pricing, Product Designs, Placement, and Promotion– Key Purchase Drivers of customers (price, deductible, ect)– Broker Network - What do we know? / What do we believe?– Product Expansion and Market Expansion Opportunities

» Expansion through acquisition or evaluation

Process Review and

Documentation

Manual Process Short-Term Automation

Process Automation

Example of Evaluating the Business Potentials

Market Assessment and Potential

16

300MillionPeople In The US

Market Assessment and Potential

US Market

XXXMillionPotential Buyers of Auto Insurance and Businesses buying PNC

Low Potential

Medium Potential

High Potential

Current States

Market Penetration – Where We Have Won!

18

Different Penetration For Different Markets

Phase II: Integration of Baseline and Outside Data

Building Reports and

Business Intelligence

20Integrating Business Intelligence Tools into the Mix and

Working with IT to develop new tracking tools and finding data

BUSINESSINTELLEGENCEDATAMART

Research Study TraceBack

Competitive Intelligence(Pricing)

Dunn and Bradstreet(Business / Employment Review)

Census Population Survey(CPS Supplemental Annual)

Yankolovich(Attitudinal Segmentation)

EDW

CI FeedsHPS Supplied Information

Call Center(Symposium)

So-Easi(Underwriting Database)

HPS Enrollment File

ARMS(Agent Relationship

Database)

Commissions(Agent Costs Paid)

Indy DatabaseDirect Sales Engine

EDGE Scheduler

Sales Funnel

Database Extract

AM Best Books CD(Statutory Extracts)

Need to BuildInformation in a

Database

Pricing Grid

Renewal Rates

Network Contracts Database

Outside Source Market Opportunity

Claims

Reporting / DataMining /Product

Development

Pricing and Experience EDW

Reporting ToolsSAS

Business ObjectsCrystal Reports

Corporate UW Database

MeetingsScheduled

John Morgan andAdam Singleton

Reporting andMetrics

New Products

DashboardsProduct ResultsDiscovery

Sale Interest Results

Rate Calculator

AWB Coremetrics

Plan Pointer

CDC - National Health InsuranceSurvey

Solar

Examples of Analytics, Reporting and Forecast

Reporting and Tracking• Building Reporting and Outside Forces • (Dunn and Bradstreet, Equifax, Experian 4 digit Zip Code data, Retention

History, Claims Patterns

Summary, Reporting, Forecast, Optimization

Detail – Policy and ClaimData mining for Patterns

Transactional – opportunity and

validation

Lifetime Value

Persistency

High Value Customers - Products

Phase III: Building tools to influence market expansion, product design and pricing changes

Examples

Underwriting Automation• Establish baseline of underwriting

standards• If exists, take underwriting answers

and compare to claims and persistency

• Use of standardizations, skip patterns and question piping to populate underwriting database and decision engine

Q1Result 1

Rate Up

Approve

Result 2 Decline

SPHERE OF

INFLUENCE

Customer Independent Broker

Receptivity

Penetration Potential

Carrier Reputation

Fair Share

Build Profiles

Retention Renewal Tactics

Demographics Socioeconomic Perception

High Value Customer Evaluation

Claims experience

Net Promoter

Attitude / Awareness /

Net Promoter

Build Profiles

CRM and Quote Profiling Tools Online and Offline

CRM Agent Recruitment Tracking Quoting tool tracking using Coremetrics, XML and

SQL Server for both Online and Offline Tools

• Qualifying Does lead meet standards• Certified (Trained) Current on product• Committed Specific volume commitment to

contract production• Engaged Merits our active support and

enrollment into our programs

• Reach• How big of a geographic circle does this agent

reach?• Customers• General, Auto Targets, PNC Targets• Partnership• Differing depths measures of ‘engaged’;

beyond ‘charter’ designation• Other• ARMS is a tool for lots of coordination

opportunities. Links to D2C and Wholesalers

Manage Agents by Sales Stage(ARMS)

Future: Enhance Agent Profiling(ARMS)

26Note: Initial ARMS “Status” designation has been established. This will “roll-up” in both Field Sales reporting and on the Operational “Dashboard”.

B2B Recruitment

Phase IV: Measure results of company efforts through reporting,

dashboards and developed algorithms

Campaign Follow-up

Customer Retention Development

Campaign Segmentation

New Sales Development

Results and Action Plan Follow-up