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Claims Process Automation with Artificial Intelligence
Kodak Alaris and CEB TowerGroup
ACE Conference 17 June 2015
CEB TowerGroup™ Insurance
4 © 2015 CEB. All Rights Reserved.
CEB TOWERGROUP INSURANCE
ROADMAP FOR THE PRESENTATION
Kodak Alaris Claims Imperatives
Business Drivers Data Challenge
5 © 2015 CEB. All Rights Reserved.
A 100 COMBINED RATIO ISN’T WHAT IT ONCE WAS
CEB TOWERGROUP INSURANCE
100.8
92.7
95.7
101.2
99.5 101.0
106.5
102.4
96.7 97.4
9.6%
12.7%
10.9%
4.3%
7.4% 7.9%
4.7%
6.2%
9.8%
8.2%
0%
2%
4%
6%
8%
10%
12%
14%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014:Q185
90
95
100
105
110
Combined Ratio ROE*
Note: *2008 -2014 figures are return on average surplus and exclude mortgage and financial guaranty insurers. 2014:Q1 combined ratio including M&FG insurers is 97.3; 2013 = 96.1; 2012 =103.2, 2011 = 108.1, ROAS = 3.5%. Source: insurance Information Institute
Investment Impact on ROEs Combined Ratio/ROE
6 © 2015 CEB. All Rights Reserved.
INSURERS STRUGGLE TO MAINTAIN PREMIUM INCREASES
CEB TOWERGROUP INSURANCE
Source: insurance Information Institute
Average Commercial Rate Change All Lines, 1st Quarter 2008-1st Quarter 2014
Note: CIAB data cited here are based on a survey. Rate changes earned by individual insurers can and do vary, potentially substantially.
-13.
5%
-12.
9%
-11.
0%
-6.4
%
-5.1
%
-4.9
%
-5.8
%
-5.6
%
-5.3
%
-6.4
%
-5.2
%
-5.4
% -2.9
% -0
.1%
0.9%
2.7%
4.4%
4.3%
3.9%
5.0%
5.2%
4.3%
3.4%
2.1%
1.5%
-15%
-10%
-5%
0%
5%
10%
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
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COST PRESSURE AND EFFICIENCY DRIVES DECISIONS
CEB TOWERGROUP INSURANCE
Impact of Factors on IT Strategy and Implementation Decisions Somewhat High to High Impact Responses, 2014
Note: Top seven selections of ten total choices depicted above n=36 Source: CEB TowerGroup Insurance Agenda Poll
82%
61% 60% 55% 54%
47% 43%
0%
20%
40%
60%
80%
100%
Cost-PressureEfficiency
NewRegulations
CustomerDemand
Agent/DistrbutorDemand
ProductChanges
TechnologyObsolescene
Availability ofInnovative
Technology
8 © 2015 CEB. All Rights Reserved.
CUSTOMER LOYALTY RIDES ON LOW-EFFORT EXPERIENCE
CEB TOWERGROUP INSURANCE
Impact of Customer Service on Customer Loyalty Customer loyalty as defined by three customer behaviors: 1) repurchase, 2) buying more, and 3) word of mouth
Disloyalty of Customers Reporting High Versus Low Effort Tested on More Than 100 Variables
Tota
l Pot
entia
l Im
pact
1.00x
(3.97x)
More Loyal
Neutral
More Disloyal
9%
96%
0%
50%
100%
Low-EffortExperience
High-EffortExperience
Source: Federal Deposit Insurance Corporation, 2014; CEB analysis. Source: Federal Deposit Insurance Corporation, 2014; CEB analysis. n = 54,166. n = 54,166.
9 © 2015 CEB. All Rights Reserved.
CUSTOMERS DEMAND MULTIPLE CHANNELS
CEB TOWERGROUP INSURANCE
Varying Channel Preference Across the Customer Journey Percentage of North American Insurance Customers by Channel Preference for Specific Activity
n = 1,441. Source: CEB 2013 Customer Experience Survey.
23% 35%
23% 27%
37% 20% 38% 16%
22% 30% 25%
46%
9% 3% 3% 2% 2% 3% 2% 2%
0%
50%
100%
Learn About a Product orService
Purchase Use or Access Receive Customer Support
In-person Online Phone Mail Mobile
10 © 2015 CEB. All Rights Reserved.
CEB TOWERGROUP INSURANCE
ROADMAP FOR THE PRESENTATION
Kodak Alaris Claims Imperatives Business Drivers Data Challenge
11 © 2015 CEB. All Rights Reserved.
DATA INITIATIVES ARE NOT YET USEFUL
CEB TOWERGROUP INSURANCE
The Information I Need To Do My Job is Available to Me Percentage of Employees
33% Yes
67% No
Information from Corporate Sources is in a Usable Format Percentage of Employees
54% No
46% Yes
Source: CEB 2012 Insight IQ Diagnostic. n = 8,335 employees.
Source: CEB 2012 Insight IQ Diagnostic. n = 8,335 employees.
12 © 2015 CEB. All Rights Reserved.
MANAGING UNSTRUCTURED DATA
CEB TOWERGROUP INSURANCE
Source: CEB 2013-14 Adoption & Investment Survey.
Importance and Confidence in Data-Related Activities Percentage of Insurance Executives Ranking Somewhat Important, Important, Very Important and High or Complete Confidence
65% 60% 55% 51%
18% 21% 16% 15%
0%
25%
50%
75%
Data Integration Data Analysis Data Dissemination Data Visualization
Importance Confidence
n = 257.
n = 257. Source: CEB 2013-14 Adoption & Investment Survey.
Perceived Difficulty of Managing Various Data Types Percentage of Insurance Technology Executives Indicating “Somewhat” to “Very” Difficult to Manage
28% 28% 24%
20% 19%
0%
15%
30%
Customer Data AcrossLines of Business
External Data Business PerformanceData
Customer Data WithinLines of Business
Product Data
13 © 2015 CEB. All Rights Reserved.
CUSTOMER-RELATED DATA IS FOUNDATIONAL
CEB TOWERGROUP INSURANCE
Most Critical Areas in the Next Six to Twelve Months Percentage of Respondents, 2014
41%
33%
31%
24%
19%
19%
13%
0% 10% 20% 30% 40% 50%
Integrating customer communications across channels andprocesses
Organizing data for actionable business analytics anddecision-making
Modernizing core insurance systems throughenhancements or new platform purchases
Applying technology to improve portals for customers andthird-party distributors
Preparing systems for upcoming regulatory requirements
Optimizing the value of customer data across channels
Developing or enhancing mobile tools for customers
Source: CEB TowerGroup Insurance Agenda Poll. n = 36. Note: Top eight selections of twelve total choices depicted above.
14 © 2015 CEB. All Rights Reserved.
CEB TOWERGROUP INSURANCE
ROADMAP FOR THE PRESENTATION
Kodak Alaris Claims Imperatives Business Drivers Data Challenge
15 © 2015 CEB. All Rights Reserved.
THE MAJORITY OF MILLENNIALS WILL SWITCH JOBS
CEB TOWERGROUP INSURANCE
Number of Employers Millennials Expect to Have During Lifetime United States, 2011
4%
54%
16%
9%
3%
14%
0%
20%
40%
60%
1 2-5 6-9 10+ Work for self Don't Know
Source: PWC <http://www.pwc.com/gx/en/managing-tomorrows-people/future-of-work/assets/reshaping-the-workplace.pdf>, 2011.
16 © 2015 CEB. All Rights Reserved.
INSURERS ARE AWASH IN DATA
CEB TOWERGROUP INSURANCE
Source: CEB analysis.
Structured and Unstructured Content Sources for Insurance Data Types, Illustrative
Adjuster Notes
Underwriter Notes
Regulatory Requirements
Photos
Video
Email Chat Messages
Social Media
Inspection Reports
Medical Reports
Underwriting and
Claims Content Types
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CUSTOMERS PREFER THE PHONE TO FILE CLAIMS
CEB TOWERGROUP INSURANCE
Ways Through Which Customers Prefer to Complete Various Financial Activities Percentage of All Insurance Customers, United States
14% 25%
32% 40%
28% 34%
76% 62%
30% 29%
17%
27%
10% 12%
38% 31%
55% 39%
0%
50%
100%
Make a Payment View or UpdateYour Policy
Add AdditionalServices
Close a Policy orAccount
File a Claim Change YourCoverage Plan
In-person Online Mobile Over the Phone
n = 117 Source: CEB Customer Experience Survey, 2013
18 © 2015 CEB. All Rights Reserved.
ADOPTING A CUSTOMER LIFECYCLE VIEW OF THE CONTACT CENTER
CEB TOWERGROUP INSURANCE
Source: CEB analysis.
New View of Insurance Contact Centers Customer Life Cycle Contact Center, 2013
Claims and Underwriters CSRs Technology
Game-Changing Technology in Insurance
Analytics
Data Management Multichannel Integration
Self-Service Social Media SaaS/Cloud
Customer
Contact Center
Distributor Mobile Direct Mail
Email Online Portal
Social Media
Fax
19 © 2015 CEB. All Rights Reserved.
CEB TOWERGROUP INSURANCE
ROADMAP FOR THE PRESENTATION
Kodak Alaris Claims Imperatives Business Drivers Data Challenge
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80% 15x
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