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

Transcription

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

2 About Blue Yonder Blue Yonder, established in 2008, is the leading software provider in the fields of forecasting and data pattern recognition or predictive analytics for short. With precise predictions, in real time and cloud-based, Blue Yonder makes an important contribution to a company s success. Blue Yonder recognizes previously undetected relationships and patterns in structured and unstructured data. Originally developed in elementary particle physics, the software evaluated quantities of data in the petabyte range, every second, in the world s largest particle accelerators at research institutions such as CERN. Many different branches of industry are now using this capability for a variety of applications: In this scenario, the self-learning (machine learning) and dynamic software provides accurate sales predictions and automatic order recommendations. It is used successfully in dynamic pricing and in the analysis of customer data. Companies are, therefore, in a position to address customers with individual product recommendations and offers, and to identify well in advance customers who are considering switching. Precise predictions allow preventative maintenance of machines and systems, thereby reducing unplanned downtimes. The analyses also effectively support risk management. Well-known customers of Blue Yonder include OTTO, dm, Vodafone, and Crate & Barrel. Blue Yonder has already won the well-regarded Data Mining Cup three times. In addition, the FOCUS Digital Star Award 2013, the CyberChampions Award 2011/12 and the CyberOne Award 2012 went to Blue Yonder. Forecasts that constantly and automatically adapt to changed basic conditions make an important contribution to making business processes profitable and sustainable. 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 fifty percent 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 increasing their own market share. At the same time, the amounts being paid out by insurance providers are also increasing. In 2010, the claims paid out by property and liability insurance providers amounted to 43 billion, a 3.3 percent increase compared to the previous year. Competition is tough, and a new factor is also emerging: Many insurance customers are putting their coverage 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 customers that are becoming increasingly demanding. Price is not their primary concern, but rather they 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 Taking individual and new measurements as needed: That is exactly what a growing number of customers expect. Yet how is this possible with: 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 also play a role. 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. Find out more in this brochure 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. They are grateful for recommendations that make life easier. NeuroBayes from Blue Yonder helps you 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. Is the liability insurance coverage sufficient and does his property insurance coverage really cover all possible damage in a new home? This is precisely how you can tap into cross-selling potential across all divisions. You can also realistically estimate the risk of a policy cancellation and can initiate marketing measures reflecting the customer s value to counteract a possible change of provider. 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 of your own. 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 minimizing risks increases: The software predicts outstanding sales from this customer in the course of the next ten years. However, the customer will increasingly compare offers and a competitor will make him a lucrative offer aimed primarily at homeowners. The risk of policy cancellation increases. The real world. 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: Occupational disability Pension schemes Life insurance Congratulations, it s a girl! Is the insurance coverage sufficient? Offer the young family appropriate additional products. Without a doubt: You have to hold on to this customer. Get over there with attractive premium offers and a new homeowners policy in hand for your valued customer.

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 customer and risk appropriate premium structure thereby making it an important competitive factor for every property and casualty insurance policy. That s why it s so important not to overlook even the tiniest bit of information. Our Predictive Analytics Suite analyzes data obtained from multiple internal sources in real time, as well as external influencers. The number of factors that can be fed into the claims forecasts is unlimited. Furthermore, our software also reveals relationships between your data that may have gone unnoticed until now: Vehicle make, model and year Age of vehicle at time of purchase Place of residence Home ownership Regional structure Just right 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 dangerous. 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 relationships that exist between your individual risks. Property insurers use NeuroBayes to predict the risk of loss and policy cancellations. Life 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 individual predictions featuring a probability distribution of the costs that will be incurred 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 so important. Only with this future knowledge can attractive and fair premiums be determined and the risk for the insurer be lowered at the same time. Their revenue increases and their cost structure is optimized. Leaving everything to chance 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 elementary particle physics, 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. In addition to precise, scheduled details down to the individual policy level, the software also provides users with occurrence probabilities for confident use of the software. 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 a particular method of treatment? What side effects are likely to occur if this medication is used? What damages are expected in 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 thereby increasing their premium volume considerably, while at the same time reducing their claims rates exorbitantly. You set premiums in proportion to the risks, allowing you to offer highly competitive rates. You detect any risks of policy cancellations in good time, so that you can counteract 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: The success of your business depends on the ability to weigh the risk of illness and with it the cost risk of every single customer. That s why NeuroBayes provides you with an accurate probability distribution of the costs you will incur during the coming year. Based on the current medical condition, ascertained during initial examination, individual forecasts for the customer contribution can be communicated with reference to any time period. This allows you to specify suitable risk surcharges and thus reduce your costs. You are able to predict fees at: the premium level the gender level 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 an effective tool for winning new customers. Through mailings or face-to-face consultations, the customers might be receptive to individual, better offers or an opportunity may arise for cross-selling. and include canceled policies 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 for medical research data. And as our self-learning software is not simply a black box, you can prove at any time that you have calculated your premiums in compliance with the German Federal Data Protection Act (BDSG), and 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 add a forecast, containing every available piece of customer information, with all relevant external factors such as health risks and their effects, to the traditional mortality table. This forecast is updated constantly and takes, among other things, the increase in life expectancy that results from the customer ageing, into consideration. You create attractive offers for private retirement plans With NeuroBayes insurance providers set their premiums fairly and efficiently: the key to offering competitive rates You 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 nobody 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: Profits increased, costs reduced Why using NeuroBayes pays off Property insurers generate accurate claims forecasts and optimize their risk management Individual premiums reduce costs and strengthen the 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 a Automobile insurers improve the attractiveness of their products and, as a result, the level of premiums considerably Automobile insurers achieve extraordinary 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 GmbH & Co. KG Karlsruher Straße Karlsruhe Germany Phone +49 (0) Fax +49 (0) info@blue-yonder.com