Software for data analysis and accurate forecasting. Forecasts for Certain Profits. The Predictive Analytics Software for Insurance Companies

Transcription

1 Software for data analysis and accurate forecasting Forecasts for Certain Profits The Predictive Analytics Software for Insurance Companies

2 About Blue Yonder Thanks to its highly successful NeuroBayes solution, Blue Yonder is a leading provider in the fields of forecasting and data pattern recognition, or predictive analytics for short. With this solution, companies can use Big Data, the enormous quantities of data that are generated today, to gain valuable insights for their corporate management. Such insights help companies make their business processes profitable and prepare them for the future, as well as transforming the vast amounts of data accumulated into corporate capital. The origins of NeuroBayes can be traced back to experimental particle physical laboratories at research institutions such as CERN, the world s largest particle accelerator, where quantities of data in the petabyte range accumulate every second. Companies use NeuroBayes to great effect for purchasing, marketing, material planning, sales, and production control. Well-known customers of Blue Yonder, which was established in 2008, include BGV/Badische Versicherungen, Central, EOS, Bürgel, and OTTO. The company s software has already won the prestigious Data Mining Cup on three separate occasions, as well as the CyberChampions Award 2011/12. NeuroBayes is self-learning and automatically detects changing basic conditions, so that it can predict precise trends and developments in real time using cloudbased technology. This makes Blue Yonder s Predictive Analytics Suite a unique system. 2

3 The only man who behaves sensibly is my tailor; he takes my measurements anew every time he sees me, while all the rest go on with their old measurements and expect me to fit them. George Bernard Shaw Tailor-made for the masses Analyze risks and sell insurance coverage intelligently According to figures released by the German Insurance Federation (GDV), of the 809 insurance companies that were active in Germany in 1980, only 582 were still in business by During the same period, the number of policies soared from fewer than 250 million to approximately 450 million, demonstrating a market that has massive potential. These vast amounts of data are hiding many trend-setting insights for these companies. However, consolidation processes are affecting every single insurance division. In 2009, almost 50% of the overall market share was split among the five largest health insurance providers. The market is completely saturated. International companies are now trying to break into the German market or are improving their own market share. At the same time, the amounts being paid out by the insurance industry are also increasing. In 2010, the claims paid out by property and liability insurance providers amounted to EUR 43 billion, a 3.3% increase compared to the previous year. Competition is tough, and a new factor is also emerging: Many insurance customers putting their cover together individually, frequently with the help of the Internet. They rely on cost-effective standard offerings, accepting the fact that they are purchasing nothing more than basic coverage for the basic premium. At the other end of the scale are the most demanding customers. They are not looking primarily at price, but rather expect policies that are tailored specifically to their needs and they also demand top service via all channels, preferably around the clock. Fine tailoring in, safety pins out Measuring each individual, again and again when needed: That is exactly what a growing number of customers expect. Yet how is this possible with numbers like these? Approximately 94 million life-insurance policies Almost 65 million health insurance policies Nearly 293 million property and casualty insurance policies, of which approximately 100 million are for automobile insurance alone And individual customers are only one of the factors that must be taken into account. Products, sales channels, and service complicate things further. Entire departments, at least at the large insurance companies, are using mathematical and statistical methods to search for optimal solutions in all of these areas. They analyze their immense stocks of data (Big Data) with future-oriented forecast models, taking advantage of the capabilities of predictive analytics. With its NeuroBayes solution, Blue Yonder provides the industry with a unique Predictive Analytics Suite that is both self-learning and able to provide forecasts for all relevant issues in real time. This enables insurance companies to recommend to their customers exactly the products they need. They offer fair premiums because they can determine their risk of losses precisely, and they can therefore improve their customer base and optimize their cost structure. Use this brochure to find out more about the advantages of using NeuroBayes, especially for your area of operations and your industry. 3

4 There is a right time for everything Customer Lifecycle Management Whatever your customers individual insurance situation, many people do not like thinking about this topic, so they are grateful for recommendations you make that make life easier. With NeuroBayes from Blue Yonder, you can identify each individual customer s current life situation in real time. You can analyze each customer s potential per division and overall and provide him with offers tailored specifically to his needs. Inexpensive single premium or family insurance policy there is a right time for everything. Does he have enough liability insurance coverage and does his property insurance coverage really cover all possible damage in his new home? This is precisely how you can tap into cross-selling potential across all divisions. You can also accurately estimate the risk of policy cancellation and initiate marketing measures appropriate to the customer s value in order to counteract the possibility of defection. By analyzing your Big Data continually and automatically, your attention will also be drawn to fraudulent activities quickly, allowing you to reduce related costs effectively. Behind the wheel at last! You offer the new young customer an automobile insurance policy at realistic but fair rates. This could be the beginning of a lifelong relationship A place to yourself. Time for the first property insurance policy? The topic of individual liability insurance should also be addressed now. Your own four walls. The desire for security and to minimize risks increases: In the next ten years the software predicts outstanding sales from this customer. However, the customer will increasingly compare offers and a competitor makes him a lucrative offer aimed primarily at homeowners. The risk of policy cancellation increases. Congratulations, it s a girl! Is the insurance coverage sufficient? Offer the young family appropriate additional products. Life begins in earnest. The customer s education is complete. His cars are newer and more expensive. You are the risk expert. Talk to your customer right away about the most important issues: Disability Retirement Life insurance But there s no doubt about it: You have to hold onto this customer. So get busy offer your regular customers attractive premiums and a new homeowners policy.

5 Things which we fail to calculate we call coincidence. Albert Einstein The real deal Claims forecasts using Blue Yonder Everything has its price individual premiums Accurate claims forecasts are a key element for creating an optimal premium structure for customers and in risks. From a competitive perspective, these forecasts are therefore an essential part of every property and casualty insurance policy, making it more important than ever not to overlook even the tiniest of clues. Our Predictive Analytics Suite analyzes data obtained from multiple internal sources in real time, as well as external influence factors. And the number of factors we can feed into the claims forecasts is unlimited. Furthermore, our software also reveals relationships between your data that may have gone unnoticed until now: Age of the vehicle Age of the vehicle when purchased Brand Place of residence Home ownership Regional structure Just the right moment risk management For a risk-driven sector such as the insurance industry, excess caution can mean stagnation. Over-confidence, on the other hand, would be suicidal. NeuroBayes allows insurance providers to find exactly the right balance and take sound precautionary measures. Blue Yonder s predictive analytics software gives you the ability to assess the probability of occurrence and relevance of a risk for your company with immense accuracy. At the same time, the risk analysis also identifies any interconnections that exist between your individual risks. Property insurers use NeuroBayes to predict the risk of loss and policy cancellations. Life insurance and health insurance providers use NeuroBayes as a basis for assessing health and longevity risks. You manage your entire company in accordance with the risks with which you are faced, optimizing your reinsurance policy in the same process. That means that there is yet another side to using NeuroBayes for your risk analyses: looking after yourself. NeuroBayes lets you calculate individual, risk-aligned premiums for each of your customers across all divisions within the insurance sector. Life insurance providers are able to set their premiums with great efficiency. For companies active in the health insurance sector, the software uses initial diagnoses as a basis for providing them with individual predictions featuring a probability distribution of the costs they will incur broken down year-by-year. Leaving nothing to chance Simulations using NeuroBayes Claims forecasts, risk and customer analyses: there is hardly any other sector where knowing the future is just as important as knowing about the past. This is the only way in which companies can determine premiums that are both fair and attractive, yet lower their risk of losses at the same time. Their revenue increases and their cost structure is optimized. Leaving everything to fate would be fatal. NeuroBayes answers every single question that is relevant in terms of the strategic control and business activities within your company. The origins of the software can be traced back to experimental particle physical laboratories at research institutions such as CERN, where millions of data records must be processed simultaneously. The self-learning software solution combines statistical methods with neuronal networks, making it far superior to alternative methods. As well as precise, scheduled details that apply at the individual policy level, it also provides users with occurrence probabilities, thereby enabling them to use the software with the utmost confidence and security. And as the amount of data that can be input into the software is completely unlimited, companies are also able to gain more detailed insights into their overall corporate strategy, as well as long-term forecasts: How successful is this particular method of treatment? What side effects are likely to occur if this medication is used? What losses are expected for the future and how do these affect costs? Other findings that are crucial for corporate policy or lobbying 5

6 NeuroBayes Forecast software for automobile insurance companies NeuroBayes Forecast software for health insurance NeuroBayes gives you a clear overview at all times, allowing you to gain valuable insights from your mass data: By creating claims forecasts based on our predictive analytics software, automobile insurers can improve the attractiveness of their offerings and therefore increase their premium volume considerably, while at the same time reducing their claims rates disproportionately The premiums you set are in accordance with the risks entailed, allowing you to offer highly competitive rates You detect any risks of policy cancellations in good time, counteracting these with specific marketing measures You are able to forecast major claims with great accuracy, feeding these into your reinsurance policy Whether private or publicly-funded: Being able to weigh up the risk of illness and therefore the risk of financial loss is critical for the success of your business. That s why NeuroBayes provides you with an accurate probability distribution of the costs you will incur during the coming year. Using a person s current state of health, ascertained during initial diagnosis, as a basis, you can draw up individual forecasts for the amount you will have to pay out, quoted in relation to any period you require. This allows you to specify suitable risk surcharges and thus reduce your costs. You are able to predict your payment expenses: At the premium level At the gender level At the age level At the same time, you use all of the available sales channels with a specific aim: You offer low basic premiums via your online portal a highly effective tool for winning over new customers. You may then choose to take mailing actions or hold personal consultations to sell better, more individual products or to make the most of your cross-selling potential. You can also include policies that have been canceled in these forecasts. NeuroBayes enables private health insurance companies to determine the best model possible for predicting their expenses. Furthermore, Blue Yonder s Predictive Analytics Suite also provides you with general health-related information, such as risks relating to side effects or data regarding medical research data. And as our self-learning software is not simply a black box, you can prove whenever you may need to that the way in which you have calculated your premiums fully complies with the German Federal Data Protection Act (BDSG), and that you have fulfilled the requirements of all current data protection guidelines. 6

7 NeuroBayes Forecast software for life insurance There is only one important question as far as life insurance firms are concerned: What is the life expectancy of each of my insured customers, and how will this number increase over time? NeuroBayes lets you extend the mortality table traditionally used in this sector by including a forecast that takes every available piece of information about the customer into consideration, including any relevant external factors such as health risks and the effects of these. This forecast is updated constantly. It also takes into account the increase in life expectancy that results from the customer growing in age, for example. You can create attractive offers for private retirement plans NeuroBayes allows insurance providers to set their premiums fairly and efficiently: the key to offering competitive rates You get to know your customers so well that you can offer them products from other divisions NeuroBayes calculates the exact deal-closure probability for products offered in cross-selling You optimize risk management, including your reinsurance NeuroBayes Forecast software for online insurance providers Any company choosing to offer its insurance products on the Internet can quickly end up in a price war that ultimately noone can win. Regardless of whether you are purely an online insurance company or a multi-channel company: NeuroBayes also lets you offer premiums on the Internet that are always risk-aligned. Our self-learning Predictive Analytics Suite analyzes the premium characteristics of online requests in real time. This means that you are able to respond to requests in no time at all, offering potential new customers premiums that are both individual and fair. Our self-learning software quickly reveals even more detailed insights gleaned from the mass of data fed into it. You constantly optimize your premiums even further, modifying and shaping your range of products to suit changing requirements. The forecasts you have at your disposal also provide you with a superb pool of data that you can then use for specific marketing campaigns. Result: Increased profits, reduced costs Why using NeuroBayes pays off Property insurers generate accurate claims forecasts and optimize their risk management Individual premiums reduce costs and strengthen their competitive position In using NeuroBayes-based Customer Lifecycle Management, insurance companies offer products that are perfectly matched to suit customers current circumstances, thereby avoiding the risk of policy cancellations Companies in the automobile insurance sector improve the attractiveness of their products and therefore the level of premiums considerably Companies in the automobile insurance sector achieve above-average reductions in their claims rates Private health insurance providers forecast the exact costs incurred for each patient over the coming years Health insurance providers analyze and compare different methods of treatment and their success Online insurance companies react to online requests in real time by quoting individual premiums 7

8 Use your data to navigate to success Still have any unanswered questions? Looking for a partner who can help you develop forecasts that are specifically tailored to your own sets of data? Contact Dunja Riehemann (Tel +49 (0) , dunja.riehemann@blue-yonder.com) to join us in this visionary venture. For more information, visit us at: Blue Yonder UK Limited 6-9 The Square Stockley Park Uxbridge UB11 1FW United Kingdom Phone +44 (0) Fax +44 (0) infouk@blue-yonder.com Blue Yonder GmbH Ohiostraße Karlsruhe Germany Tel +49 (0) Fax +49 (0) info@blue-yonder.com BY_062014