By Cynthia Bianco is president of MicroStrategy in Brazil
The insurance segment projects a challenging scenario for 2016 with a probable increase in the loss ratio, reflecting the crisis and economic adversities in the country. According to the National Confederation of Insurance Companies (CNseg), the growth for this year should be more modest and stay at around 10.3%. However, the market still has room to grow in Brazil and with the help of analytical intelligence this path can be less arduous.
Business intelligence (BI) tools, also called Analytics, thanks to their ability to use data, analysis and systematic reasoning, lead to a much more efficient decision-making process. Brazilian insurers obviously already use this type of technology, but the utilization is still below the full potential they provide. Usually, on a daily basis, they end up choosing to develop applications that focus on commonly used indicators, such as, for example, the most assured car models and brands. Or, to monitor sales performance, by region, by type of insurance, among other details.
There is still no established culture in this industry with regard to the application of mathematical calculations for the benefit of businesses, such as, for example, to know the profile of customers and the risk chances they represent for the portfolio. Decisions are often made based on feeling and intuition, without using statistical and analytical data. We live in a Big Data world, with a gigantic amount of information found within the company itself and also available on the Internet. And all this data can and should be used in favor of the insurance market.
But how to take advantage of the wealth of this data? There are different types of analytical applications capable of helping to answer this challenge. In a first level, BI projects are positioned, which make it possible, for example, to measure sales volumes and the pricing of these amounts in real time, in addition to establishing rules and standards that help to verify whether the commercial model adopted is being efficient. It is also possible to check how far one is from meeting targets and to set discount ranges in these circumstances. If, at the time of sale, the broker, based on a series of indicator simulation possibilities that decrease or increase that contractor's risk, is able to see the maximum discount to be offered, calculate and explain the price reduction bands, he certainly will improve your results. After all, it is a fact that the slow response and the inability to present proposals that are more assertive and appropriate to the profile of each client sometimes result in waste of good business opportunities.
In a second moment, mobility comes in, which opens up infinite possibilities for application development. Bearing in mind that the focus is not only on selling for selling, but on maintaining the profit margin and preserving risk, it is crucial that insurers are able to bring detailed and up-to-date information about their client portfolio into the hands of brokers. Strategic data helps those who are at the forefront in defining the direction to be taken. In the case of granting discounts, analytics provides the necessary intelligence for the action, providing unparalleled independence for brokers. In addition, mobility has other advantages, in addition to real-time monitoring. The features available on smartphones and tablets are numerous. The simplest of them, the photographic camera, already allows a leap in agility, either to register an occurrence during an accident or in an inspection procedure. Not to mention that these images can be sent along with all the documentation, still in the field, significantly reducing the response time and improving, in turn, the service provided to the customer.
However, it is possible to go even further with regard to the application of analytical intelligence in the insurance market. The use of analytics for the discovery of fraud, intent that worries and damages insurance companies so much, is undoubtedly one of the main points to be considered by these companies. An analytical tool allows you to quickly find out if there is anything strange, check for fraud and correct this deviation as soon as possible. The applications are numerous, in the most varied types of insurance and nature of fraud. In case files, for example, it is possible to make a study of the average amount charged normally for the repair of a particular fault and, thus, identify the companies that are receiving more to make that same category of repair. In the case of health insurance policies, fraud related to excessive examination requests can be detected with a simple background analysis. And, unfortunately, it is in this way of harnessing the potential of BI that Brazilian companies are most outdated.
Understanding the way in which international companies are making use of this technology can also be a good source of inspiration. Zurich, the leading global insurance company, employs BI to analyze claims and anomaly risks in its portfolio. For this purpose, it developed an app, called CAPS (Claims Analytical Performance System), which allows both teams located at the company's headquarters and those in the field, to easily explore data on claims, find the areas that need improvement and make decisions in few seconds. CAPS enables controllers and managers to analyze annual trends in claims data worldwide, with dashboards capable of displaying information by time period, geography or line of business, using actuarial methodologies. The implementation of the app in 39 countries brought transparency to the operations and also helped to minimize the difficulties in meeting the complex regulations that guide the insurance industry.
These are some examples, but there are a multitude of opportunities and possibilities that can open up when a first step in the adoption of analytical tools is taken. Nothing is more assertive than this type of technology to measure profitability, avoid losses, retain and retain customer. After all, once companies are clear about what is right and what is wrong in their business, they will certainly become more profitable and competitive.
Business intelligence (BI) tools, also called Analytics, thanks to their ability to use data, analysis and systematic reasoning, lead to a much more efficient decision-making process. Brazilian insurers obviously already use this type of technology, but the utilization is still below the full potential they provide. Usually, on a daily basis, they end up choosing to develop applications that focus on commonly used indicators, such as, for example, the most assured car models and brands. Or, to monitor sales performance, by region, by type of insurance, among other details.
There is still no established culture in this industry with regard to the application of mathematical calculations for the benefit of businesses, such as, for example, to know the profile of customers and the risk chances they represent for the portfolio. Decisions are often made based on feeling and intuition, without using statistical and analytical data. We live in a Big Data world, with a gigantic amount of information found within the company itself and also available on the Internet. And all this data can and should be used in favor of the insurance market.
But how to take advantage of the wealth of this data? There are different types of analytical applications capable of helping to answer this challenge. In a first level, BI projects are positioned, which make it possible, for example, to measure sales volumes and the pricing of these amounts in real time, in addition to establishing rules and standards that help to verify whether the commercial model adopted is being efficient. It is also possible to check how far one is from meeting targets and to set discount ranges in these circumstances. If, at the time of sale, the broker, based on a series of indicator simulation possibilities that decrease or increase that contractor's risk, is able to see the maximum discount to be offered, calculate and explain the price reduction bands, he certainly will improve your results. After all, it is a fact that the slow response and the inability to present proposals that are more assertive and appropriate to the profile of each client sometimes result in waste of good business opportunities.
In a second moment, mobility comes in, which opens up infinite possibilities for application development. Bearing in mind that the focus is not only on selling for selling, but on maintaining the profit margin and preserving risk, it is crucial that insurers are able to bring detailed and up-to-date information about their client portfolio into the hands of brokers. Strategic data helps those who are at the forefront in defining the direction to be taken. In the case of granting discounts, analytics provides the necessary intelligence for the action, providing unparalleled independence for brokers. In addition, mobility has other advantages, in addition to real-time monitoring. The features available on smartphones and tablets are numerous. The simplest of them, the photographic camera, already allows a leap in agility, either to register an occurrence during an accident or in an inspection procedure. Not to mention that these images can be sent along with all the documentation, still in the field, significantly reducing the response time and improving, in turn, the service provided to the customer.
However, it is possible to go even further with regard to the application of analytical intelligence in the insurance market. The use of analytics for the discovery of fraud, intent that worries and damages insurance companies so much, is undoubtedly one of the main points to be considered by these companies. An analytical tool allows you to quickly find out if there is anything strange, check for fraud and correct this deviation as soon as possible. The applications are numerous, in the most varied types of insurance and nature of fraud. In case files, for example, it is possible to make a study of the average amount charged normally for the repair of a particular fault and, thus, identify the companies that are receiving more to make that same category of repair. In the case of health insurance policies, fraud related to excessive examination requests can be detected with a simple background analysis. And, unfortunately, it is in this way of harnessing the potential of BI that Brazilian companies are most outdated.
Understanding the way in which international companies are making use of this technology can also be a good source of inspiration. Zurich, the leading global insurance company, employs BI to analyze claims and anomaly risks in its portfolio. For this purpose, it developed an app, called CAPS (Claims Analytical Performance System), which allows both teams located at the company's headquarters and those in the field, to easily explore data on claims, find the areas that need improvement and make decisions in few seconds. CAPS enables controllers and managers to analyze annual trends in claims data worldwide, with dashboards capable of displaying information by time period, geography or line of business, using actuarial methodologies. The implementation of the app in 39 countries brought transparency to the operations and also helped to minimize the difficulties in meeting the complex regulations that guide the insurance industry.
These are some examples, but there are a multitude of opportunities and possibilities that can open up when a first step in the adoption of analytical tools is taken. Nothing is more assertive than this type of technology to measure profitability, avoid losses, retain and retain customer. After all, once companies are clear about what is right and what is wrong in their business, they will certainly become more profitable and competitive.
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