1 Text and Predictive Analytics

2 Analytic Value Efforts Reporting = “Having the data” Timeliness and accuracy Reports and Tables Surfacing data with agility Descriptive Analyses = “Seeing the data” Scorecards / Measurements Profiles and Exceptions Segmentation Analytic Modeling = “Knowing the data” Understand Trends Evaluate Business Practices Choice Models and “What ifs” Predictive Analytics = “Acting on the data” Informed decision-making Actionable Information Engines

3 Convergence of Disciplines Example Never stop learning

4 Structured data Semi-structured data Unstructured data Text Spatial Pictographic Graphic Voice Video Data Types and Forms

5 The Evolving World of Data Web of Knowledge HyperText Markup Language (HTML) HyperText Transfer Protocol (HTTP) Resource Description Framework (RDF) eXtensible Markup Language (XML) Self-Describing Documents Formatted Documents Foundation of the Current Web Proof, Logic and Ontology Languages (e.g., DAML+OIL) Shared terms/terminology Machine-Machine communication Based on Berners-Lee, Hendler; Nature, 2001

6 The DRM Education Pilot Source: Mills Davis, “Smart Search Continuum” in DRM Implementation - Preliminary Strategy, October 11, DRM = Data Reference Model

7 Data Archive, Legacy Systems Current System Claim Multiple States Billing Systems Finance Systems CRM Systems, other data Policy Multiple Underwriting Systems Medical Data - Bill Review - PPO - Case Management - Paradigm Multiple Data Systems which must be pulled together for analysis. Great opportunity for cross-validation and sourcing Identify Data Systems Get right data from right systems Overcome internal Organizational Barriers Bridge to legacy systems and archived data Augment to create rich data mining environment Expect the need to negotiate for resources ACTIONS Vendors/Partners External Data

8 Sales and Distribution Producer Segmentation Market Planning Revenue Forecasting Cross sell and Up sell Retention and Profitability Underwriting Risk Selection and Pricing Portfolio Management Premium Adequacy Billing and Collections Management Claims Payment Accuracy Claim Collaboration > Fraud Detection > Subrogation > Risk Transfer > 3 rd Party Deductible > Reinsurance Recoverable General Organizational Overview An information business focused on risk taking. Make. Sell. Serve.

9 Policy processing – Underwriting notes and Diaries DESK UNDERWRITER D&B Data ISO Data Application information Claim loss runs Hazard mappings Concentrations of Staff Premium Auditors Renewal processing Legal Staff …others Home Office Staff Field Office UW Staff Insured Risk Manager Agent or Broker Diary forward – “call Agency next week” Business Rule – large loss review System Reminder – update renewal pricing Correspondence Tracking – legal letter sent Make

10 Customer Management – Contact notes and Diaries ACCOUNT MANAGER Voice of the Customer Customer Feedback Call Center Notes Agent Contacts Billing Systems Deductible Processing Premium Auditors Renewal processing Company-wide Sales Staff Product Manager Insured Risk Manager Agent or Broker Diary forward – “call Mr Jones tonight” Business Rule – DOI Complaint handling System Reminder – Visit with Client Correspondence Tracking – legal letter sent Sell

11 Claims processing – Progress notes and Diaries CLAIMS ADJUSTER Medical Management Staff Special Investigation Unit NICB Vendor Management Consulting Engineers Hearing Representative Structured Settlement Unit Recovery Staff Legal Staff Home Office Staff Field Office Claim Staff Insured Risk Manager Agent or Broker Diary forward – “call Dr Jones next week” Business Rule – large loss review System Reminder – update case reserves Correspondence Tracking – legal letter sent Service

12 Accident: Employee Injured In Fall From Second-Floor Decking InspectionOpen DateSICEstablishment Name /29/ xxxxxxxxxxxxxxxxxxxxxxxx Employee #1 was atop of the second floor decking of a newly constructed home, connecting frame work for a wall. He fell 18 ft 6 in., sustaining injuries that required hospitalization. Employee #1 was not tied off, nor were any other means of fall protection in use. He had not been trained in working from an elevated work surface, the company did not have a written safety program, and regular inspections were not performed. Keywords:decking, fall, tie-off, untrained, work rules, fall protection, construction InspectionAgeSexDegreeNatureOccupation MHospitalize d injuries Cut/Lacerati on Carpenters Source: U.S. Department of Labor Occupational Safety & Health Administration Accident Report Detail Accident Investigation Summaries (OSHA-170 form) which result from OSHA accident inspections. See for yourself ---The importance and relevance of text not tied off, nor were any other means of fall protection in use. He had not been trained in working from elevated work surface the company did not have a written safety program, and regular inspections were not performed.

13 Same Problems – Different Lines of Business Personal – Auto, HO, Umbrella Small Commercial – BOP, CPP Middle Market Commercial – CPP w/GL, CP, Crime, CIM, B&M, WC, Auto Large Commercial Accounts Commercial Auto Workers Comp Umbrella/Excess Specialty Lines – D&O, EPL, E&O, Farm, FI Personal – Auto, HO, Umbrella Small Commercial – BOP, CPP Middle Market Commercial – CPP w/GL, CP, Crime, CIM, B&M, WC, Auto Large Commercial Accounts Commercial Auto Workers Comp Umbrella/Excess Specialty Lines – D&O, EPL, E&O, Farm, FI

14 Predictive Modeling Projects you should do Loss Control Fraud Prevention Property Inspections Assess Work sites Re-underwriting Cost Avoidance Automate Manual Work Appetite Qualification Underwriting Guides Redundant Processes Vendor Sourcing Spend Analysis Cash-flow Opportunity Subrogation Credit to Loss Third Party Deductible Premium Audit (Comm) Account Identification Audit Ordering Insured to Value (PI) Better Decision Making Risk Selection Renewal (Attrition) New (Acquisition) Cross-sell & Up-sell Portfolio Management Broker/Agent Profiles Medical Management Litigation Management Large Loss Reserving Improved Collaboration

15 The Challenge: