Session 2 Generating Value from 'Big Data' Mark T. Bain

Transcription

1 Session 2 Generating Value from 'Big Data' Mark T. Bain

2 Presented by Mark Bain Head of Insurance Consulting KPMG GENERATING VALUE FROM BIG DATA 1

3 BIG DATA IS EVERYWHERE WHAT IS BIG DATA ALL ABOUT? WHAT ARE THE BENEFITS? What is it? Who is it for? Massive data stores to which algorithms are applied to derive insights on consumers, behaviors, etc. Big Data is within the reach of all companies not just Google and Facebook Big data enables a shift to one to one customer interactions Mass Little differentiation of consumers Targeted Consumers categorized based on similarities Why the excitement? New technological possibilities will make it critical to winning Tailored Consumer is unique INSURERS ARE POSITIONED TO CAPITALIZE ON A LARGE CUSTOMER INSIGHT OPPORTUNITY INSURERS ARE POSITIONED TO SUCCEED BUT ONLY A FEW CAN WIN Already accumulating data Already analyzing data Already converting data into action Given business, insurers already have, or have access to valuable consumer data Analytical competencies are already critical to organizational success Though basic, insurers already know how to transfer data insights cross functionally The insurer that figures out how to leverage existing and new data to proactively approach customers with the ideal solution at the ideal moment in their lifecycle will gain substantial competitive edge 2

4 GUIDING PRINCIPLE 1 Principle 1: The more you know about your Customer, the more successful you will be in offering them the right product, through the right channel, at the right time that they will have a higher propensity to buy. MOST CARRIERS HAVE A BASIC UNDERSTANDING OF THEIR CUSTOMERS... NAME ADDRESS PHONE NUMBER DATE OF BIRTH 3

5 DIGITAL ANALYTICS ARE OPENING UP A HOST OF NEW CUSTOMER INSIGHT OPPORTUNITIES Car owner Date of birth Home phone number Home owner Address Name Has no elderly dependents Plays golf Office phone number Travels for work Owns a dog Children going to school Married 3 children Salary Occupation address Uses social media New born baby THE CUSTOMER DATA CONVERSATION NEEDS TO MOVE FROM PROFILING TO INSIGHT-DRIVEN CUSTOMER INTERACTION Current / Prospective member lifecycle and daily living Record & analyze data generated passively; create picture Communicate insights Target offering Meet Paul 31 y/o, Male, Engineer Recently Joined Real Estate Investors LinkedIn group Just booked a honeymoon package deal on Expedia.ca Recently listed his car for sale Paul is a young engineer, soon-to-be married, who is looking to purchase property. Paul is selling his sports car, possibly to purchase a car more suited to parenting children. Marketing Team 3 rd party advisors Internal Sales Team Advertising Team Travel insurance for honeymoon trip P&C offering for his real estate investment Health insurance for his new family Auto insurance for new family car 4

6 CREATE THE BASIS FOR SUCH OFFERINGS BY DETERMINING CUSTOMER PROPENSITY TO BUY A key output is the evaluation of each customer s propensity to buy your products. Health Car Property Insurance High Call High Social High Travel Medium Pet Medium Social Critical Illness Medium Call Golf High SMS GUIDING PRINCIPLE 2 Principle 2: With many existing customers and a leads, you want to focus your sales resources on the customers and prospects that will produce the most value for your company. 5

7 INSURERS NEED TO ORIENT THEIR ORGANIZATION TO WHERE VALUE RESIDES Determining the value of your customers to your organisation is an essential step in the value creation process. EXISTING CUSTOMER Segment into clusters based on their value High Net Worth VALUE CLUSTER PROSPECTS / LEADS Mass Affluent Customer Value Mass GROUP CUSTOMERS FOR LEAD GENERATION AND SALES CAMPAIGNS Customers in each value cluster can be further grouped into finely-defined profiles so that marketing campaigns and lead generation can be designed based on customer attributes, needs and channel preference. VALUE CLUSTER Profile of High Net Worth x 100,000 High Net Worth Campaign Audience Group 4 Age: Gender: Male Marital Status: Married Mass Affluent Dependency: Live with family Annual Salary: 120k 150k No. of children: 1 2 Car Renewal Date: October 2013 Owns Property: Yes City: Shanghai Mass Relationship: Existing Warm Interest: Books / Travel / Golf Preferred Channel: Agency Profile of Mass Campaign Audience Group 19 Age: Gender: Female Marital Status: Single Dependency: Live with parents Annual Salary: Low income No. of children: 0 Car Renewal Date: N/A Owns Property: No City: Hong Kong Relationship: Prospect Developing Interest: Books / Movie Preferred Channel: SMS x 750,000 6

8 LINK THE INSURER TO THE CUSTOMER BY PRIORITIZING LEAD/CAMPAIGN LISTS Prioritized lead or campaign lists are e generated according to propensity scores of the customer / prospect enabling a more precise sales model EXISTING CUSTOMER SCORE FOR CUSTOMER / PROSPECT LIFE INSURANCE 9.8 High Propensity to Buy Medium Propensity to Buy PROSPECTS / LEADS Data Analytics Prioritisation Life Insurance Low Propensity to Buy A CHANNEL LAYER ENSURES CUSTOMERS ARE ENGAGED WHERE THEY WANT, HOW THEY WANT, WHEN THEY WANT DETERMINING CHANNEL PREFERENCES With support of data analytics and propensity models, sales campaigns can be designed and precisely broadcasted to targeted micro-segments through specific channels. MICRO-SEGMENT 1 MICRO-SEGMENT 2 CHANNEL (Agency) CHANNEL (Telesales) CHANNEL (Social Media) OPTIMISED MARKETING CAMPAIGN DATA ANALYTICS PROPENSITY MODEL 7

9 ACTUARIAL CONSIDERATIONS Product design more flexibility to target specific consumer lifestyle needs with cross line of business packaging and value added services to increase sales conversion rates. Pricing richer data enabling very tailored pricing. Dynamic point of sale pricing based on total relationship, claims experience, channel or even potential future value. Distribution traditional face to face sales opportunities for insurance products are on the decline. There will be a dramatic increase in direct sales, the question is how big and how soon. Renewal and Retention a key factor in future renewals and retention will be convenience and personalized affinity services. Peer review ratings of brands and products will also have a greater impact on consumer choice. GETTING FROM HERE TO THERE... Customer Insight Customer Strategy & Proposition Channel Optimization Service Excellence Conduct data enrichment using all available sources Build a comprehensive 360 customer view Segment your customers in accordance with your strategy Develop propositions and products based on customer attributes and voice of customer that align to those value segments Develop propensity models based on the segmentation approach and propositions to target your customers with the right product, through the right channel that they will have the highest propensity to buy 8

10 Q&A 9