The Next Generation
of Business Intelligence
CAS 2001 Seminar on Ratemaking Session DAT-9
MODERATOR: Al Hapke
President, Aspect Inc.
PANELISTS:
Thomas Chesbrough
Founder & Executive Vice President, Thazar Solutions Corporation
James Streff
President, Streff Insurance Services
This slide presentation contains confidential and proprietary information
which is the property of Thazar Solutions Corporation®.
In This Session
• Current environment
• Lessons learned
• Evolution of next generation systems
• Examples
• Real-world usage and benefits
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Current Environment
• Custom data warehouse and applications
• Lengthy implementation timeframe
• High implementation costs
• High-risk implementation process
• Uncertain and unidentifiable user benefits
• Inability to quantify ROI
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The Next Generation
• Intuitive business intelligence environment that
enables user to isolate and clarify problems
• Low-risk, low-cost, end-to-end solution
 Complete operating environment
 Pre-packaged insurance warehouse
 Advanced analytic systems
 Built-in insurance metrics
 Proven decision theory and statistical testing
• Data foundation supports rapid, accurate decisions
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Lessons We Have Learned
Traditional
Data Warehousing
Solutions
Scope
• Enterprise-wide
• Captures all data elements,
whether or not they will ever
be used in company analyses
Effort
Pre-packaged Insurance
Warehouse & Analytic
Application System
• Focused on business
operations
• Captures data elements
vital to analyzing and
monitoring company
performance
• 6-24 months or longer
• 90-160 days
• Large-scale custom ETL
processes typically lengthens
implementation
• Standardized templates
speed up implementation
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Lessons We Have Learned
Traditional
Data Warehousing
Solutions
Pre-packaged Insurance
Warehouse & Analytic
Application System
Cost
• $500,000+ depending on
company size
• Short implementation
process and subscriptionbased pricing reduces cost
dramatically
Results
• Large, complex data
warehouse that stores all the
information a company would
need, but end users still don’t
know how to use the data once
they get it
• Effective system that
empowers user to analyze
and monitor the
effectiveness of their
business processes
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The Information Sweet Spot
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Business Intelligence Investment
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The Evolution of
Business Intelligence
1985
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2001 & BEYOND
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Traditional Implementation
Client
Data Stores
Custom
ETL Process
CUSTOM
EXTRACTION
Custom
Data Warehouse
CUSTOM
LOAD
CUSTOM
POPULATE
• Numerous Resources
• Skilled Craftsman
• High Cost
• Excessive Time
• Opportunities for Mistakes
Client
Responsibility
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Custom Work
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Custom
Data Marts
Custom Data Marts
& Manual Balancing
New Implementation Approach
Client
Data Stores
Mapping
Template
CLIENT
EXTRACTION
Insurance
Warehouse
XML
CONVERSION
Client XMLTag Data
Maps To Standard
Template Codes
AUTOMATIC
POPULATION
Packaged
Warehouse
Client
Responsibility
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Insurance
Data Marts
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SUPPORTS
ANALYSES
Pre-defined
Data Marts &
Automated
Balancing
Automated
Processes
Analytic
Applications
Deployment Environments
Client-site deployment
Thazar-hosted environment
• Client responsible for
• Thazar responsible for
 Operations
 Operations
 Hardware & software costs
 Hardware & software costs
 Maintenance & support
 Maintenance & support
 Internal resources
 Internal resources
 Training issues
 Training issues
• Proven alternative that
reduces cost of entry
• More ROI, more quickly
• Remote access via Internet
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Client-site
Deployment
USER
User access
via Internet
(if using
Thazar-hosted
deployment)
Thazar-hosted
Deployment
Client’s INSsight Shell
INSsight Shell
 Business Intelligence Subscription Shell
 Subscription Mgmt. Database / API
 Business Intelligence Subscription Shell
 Subscription Mgmt. Database / API
Client’s Websphere
Application Server
Thazar’s Websphere
Application Server
 Java Server Pages (JSP) Engine
 Servlet Engine
 Enterprise Java Bean Engine
 Java Server Pages (JSP) Engine
 Servlet Engine
 Enterprise Java Bean Engine
Client’s Database Server
Thazar’s Database Server
 Application Specific Data Marts
 Application Registry
 App. Relationship Mgmt System
 Security Database
 Application Specific Data Marts
 Application Registry
 App. Relationship Mgmt System
 Security Database
Data Store,
Warehouse,
and Marts
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Data Transfer
(if using Thazar-hosted deployment)
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Data Store,
Warehouse,
and Marts
The Next Generation
• Complete solution with seamless integration
• Analytic applications answer specific business
function questions and guide user through analysis
• Answers four basic questions
 Who
 What
 When
 Where
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Intuitive Applications
• Users don’t have to know:
 Complex data structure
 Technical data element name
 Granularity of data
 SQL knowledge
• Users can easily view information from many angles
and analyze at deep levels
• Seamless, integrated applications support complete
thought process from discovery through analysis
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Simple Interface, Complex Query
• Not just queries, but proven statistical analysis
 Profile Monitor: Chi Square algorithm
 Retention Monitor: unique loyalty matrix
 Loss Monitor & Retention Monitor: leading edge customer
aging process
• Simple interface, but complex query underneath
 One-click summary launches 32 queries to obtain LOB
attributes for new & existing business in Profile Monitor
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INSsight
Business
Intelligence
System
ANALYSES
QUERIES
SCORES
MONITORS
BENCHMARKING
PORTALS
ANALYTIC
APPLICATIONS
SCORING &
MODELING
INSURE
MARTS
INDUSTRYSTANDARD
NAMING
& CODES
INSURANCE
WAREHOUSE
STANDARD TEMPLATE
LOAD
TRANSFORM
EXTRACT
CLAIM
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POLICY OTHER EXTERNAL
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DATA
STORES
Success Criteria for
Web-based Business Intelligence
• Performance
• Ease of use
• Scalability
• Interactivity
• Low-cost administration
• Availability
(anywhere, anytime)
• Security
• Functionality
• Pricing
• Architecture
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An Actuary’s Perspective
• Data is accessible and accurate
• Eliminates many clerical tasks
• Allows work at the highest level possible
• Produces valuable business intelligence in
operational areas
• Produces more surgical solutions more efficiently
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A Product’s Hidden Costs
• Actuaries can calculate product price to compensate
for added costs due to poor management
• Many factors add cost to the product
 An undisciplined distribution force
 Customer disloyalty
 Underwriting poor risks
• Adverse selection adds cost to the company
• Actuaries need to apply their skills to eliminate added
costs to keep product prices as low as possible
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Defining A Good Solution
• Measures behavior that produces good results
• Includes responsive formulas for early detection
• Isolates measurements on any subset of information
• Follows stream of logic in solving problems by linking
applications
• Scores performance and sets alerts
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INSsight Applications
™
• Retention Monitor™ – measures retention trends
• Loss Monitor™ – measures underwriting excellence
• Profile Monitor™ – measures discrete changes in a
company’s book of business
• Claim Monitor™ – measures claim excellence
• Ratemaker™ – supports the pricing function
• Prophet Portal™ – provides guided query analysis
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Retention Monitor
• Loyalty has a big economic reward
• Companies with high customer loyalty are the most
profitable and can sustain the best growth rates
• Measures customer and agency loyalty
• Measurements can be calculated by month of issue
or by calendar month
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Loss Monitor
• New business is difficult to underwrite profitably
• Losses early in a policy’s life are balanced by profits
later in the policy’s life
• Underwriting losses on new business need to be
balanced by profits on tenured business
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Profile Monitor
• Measures the characteristics of policies
• Identifies adverse selection
• Measures the direction of a book of business
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Claim Monitor
• Designed as a comprehensive (holistic) system for
measuring claims excellence, including
 Accurate claims reserving
 Claim cost containment
 Control of claim expense
 Recovery of salvage and subrogation
 Proper pace for claim closure
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Ratemaker
• Produces a complete set of ratemaking exhibits
• Enables actuary to interact with the application in
regard to:
 Claim trend factors
 IBNR
 Premium drift factors
 Large loss loadings
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Ratemaker
• Ratemaker will include:
 Rate Indication Worksheet
 Analysis of Catastrophe Losses
 Calculation of Loss Trend Factors
 Analysis of Rating Parameters such as Increased Limit
Factors
 Analysis of Losses by Layer of Loss
 Analysis of Time Lags and Calculation of Investment Income
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Prophet Portal
• An extremely versatile, all-purpose application
• Allows actuary to focus on almost any inquiry
imaginable, including options for defining loss ratio,
exposures and time intervals
• Tremendous power to isolate measurements on any
subset of geography, rating parameter, distribution
entity, and product characteristic that arise from the
questions of who, what, where and when
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Summary
• Thazar’s next generation business intelligence
systems gives actuaries more powerful tools:
 By providing an accurate repository of data
 By giving logic to follow logical thought process in problem
solving
 By incorporating more business intelligence into the decision
making process
 By allowing the actuary to concentrate on business issues
not data issues
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See INSsight™ in action!
Please contact us to participate in
one of the following online demonstrations:
 Thurs., March 22, 9 a.m. CST
 Thurs., March 22, 1 p.m. CST
 Wed., March 28, 9 a.m. CST
 Wed., March 28, 1 p.m. CST
Private demonstration times also available.
T1, Cable, or DSL Internet connection required.
888.527.7866
www.thazar.com
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