AI driven Knowledge Management

I have been working with a large insurance company to define its knowledge management strategy and solution architecture. As I dug deeper into business scenarios, I realized that ‘Knowledge Management’ is the key area where A.I technologies will have immediate and significant impact on insurer’s bottom line. .... click here for more -> https://www.linkedin.com/pulse/ai-driven-knowledge-management-amit-unde/

Applying AI in Insurance

Please check this out - https://www.lntinfotech.com/blogs/applying-ai-in-insurance/

Connected Insurance – How will it be in 10 Years from now?

Read it at - https://www.lntinfotech.com/Blogs/Lists/Posts/Post.aspx?ID=98

End of Insurance as we know it

Click here to read the blog published on LinkedIn

Insurance: Regulations likely to bring back more focus on ‘Risk Management’ practices and global visibility

At recent G20 Summits, the G20 Leaders endorsed the implementation of an integrated set of policy measures to address the risks to the global financial system from systemically important financial institutions (G-SIFIs). Accordingly FSB (Financial Stability Board), in conjunction with IAIS (International Association of Insurance Supervisors) identified an initial list of Global Systemically Important Insurers (G-SIIs) consisting of 9 groups:

1) Allianz, 2) AIG, 3) Generali, 4) Aviva, 5) Axa, 6) MetLife, 7) Ping An, 8) Prudential Financial and 9) Prudential plc.

Basically, FSB is trying to solve 'Too big to fail' problem by hand picking large global institutes and subjecting them to a set of policy measures.


Although the initial focus is on these designated global SIFIs, it may eventually come down to all large, internationally active carriers. Many domestic regulators are likely to designate domestically important insurers and apply policy measures on the similar lines. In June 2013, U.S Department of Treasury FSOC designated AIG and Prudential Financial as SIFIs, and both will be subject to stricter regulatory standards and supervisory oversight under the 2010 Dodd-Frank Act.

The set of policy measures comprise:
• recovery and resolution planning requirements;
• enhanced group-wide supervision; and
• higher loss absorbency requirements ( including non-traditional non-insurance (NTNI) subsidiaries)

The impact of these regulations is still being worked out, however, at the minimum, it requires following from IT perspective -
• Integration of data sources for recovery/resolution and risk management across the group
• Identification of changes to Risk management metrics and bringing in visibility at group and legal entity level
• Identification of intra-group exposures
• Approach for ring fencing NTNIs and development of risk management plan & systems

In July 2014, Systematically important Reinsurers will be identified and they are likely to have similar impact. I will update this entry as we do more research on this.

New article : Big data Trends 2014

The recent article in Alsbridge Outsourcing Center - Big Data Trends 2014, includes some of my thoughts on how Insurance companies can effectively leverage the super abundance of data - http://www.outsourcing-center.com/2013-09-big-data-trends-2014-new-uses-new-challenges-new-solutions-58181.html
Here are some excerpts -

In this era of low interest rates, insurance companies need strong real-time analytics capabilities to achieve the elusive underwriting profit and sustained growth,” explained Amit Unde, chief architect and director of insurance solutions for L&T Infotech. “Going forward, the competitive battles will be played on the data turf. It’s the companies that leverage both external and internal Big Data, predictive analytics and adoptive underwriting models that will come out on top.

With Google Maps and location intelligence services, the underwriter can view a property from all angles and assess distance from a coastline, flood plain or other potential hazards. Online access to hundreds of different data sources—from videos to photos to loss trends and other documents— is now just a few clicks away,” Unde said. “But, without the right tools, mining this data is still a highly manual process.

I wouldn’t be surprised if, in the next five years, the next big player in the commercial insurance industry was a new company with a Big Data-driven automated policy issuance and claims payout model,” Unde said. “Automated decision-making has the potential to transform the industry, enabling small players to compete with large insurers, based on their technology.

In the insurance industry, companies should validate against a set of rules or cross-verify against multiple sources,” Unde said. “However, in most cases, it doesn’t make sense for insurers to boil the ocean to get 100 percent data accuracy. It makes better sense to apply the 80/20 rule to achieve the desired accuracy for the 80 percent of the dataset without having to invest intensive efforts—then asking ‘did you mean’ questions in the remaining 20 percent of cases.

Let me know what you think about the article.

Webinar : Aggregate, Visualize and Manage: The Fundamentals for Gaining A Single View of Risk

The ability to aggregate, visualize, understand and manage risk is fundamental to the profitability of insurance carriers and reinsurance companies. In some cases, it’s fundamental to legal compliance, overall solvency and long-term viability.
Yet it has been difficult to date for most insurers to gain a single, operational view of risk across their organizations. Until now…
Carriers are beginning to leverage technology solutions for a comprehensive risk management solution – one that helps carriers overcome siloed operational structures, IT systems and data sources to integrate information across the enterprise, ensure its quality, enrich it with third-party data – and then present a single, map-based view of operational risk in near-real-time.
View this one-hour webinar ( conducted on Wednesday, July 31, at 2:00 PM)as Rich Ward, Business Solution Architect with Pitney Bowes Software and Amit Unde, Chief Architect, Insurance Solutions with L&T Infotech, discuss new trends in location intelligence technologies and how near-real-time geospatial analytics are drastically changing catastrophe modeling, underwriting and risk management practices.

6 Strategies for NextGen Insurance Underwriting

6 Strategies for NextGen Insurance Underwriting

Big Data: Are you still a fence sitter?

Get more value from Big Data technologies – Use it for Small Data Analytics

[ Note : I have published this blog originally at L&T Infotech blogsite - www.lntinfotechblogs.com/Lists/Posts/Post.aspx?ID=38 ].

Big data is often defined by three Vs. – Volume, Variety and Velocity. While this definition captures the essence of Big data, it is limiting when used to define technologies that support Big data. These technologies can do much more than just handling ‘Big data.’ In fact, most enterprises can derive more value by using these for ‘small data’ analytics.
Besides handling large variety of data, these technologies provide new analytical capabilities, including natural language processing, pattern recognition, machine learning and much more. You can use these capabilities effectively for small (or ‘not so large’ data) in non-traditional ways and get more value out of this data.
Here is how –
1. Create ‘Data labs’ rather than just a data warehouse
Big data technologies provide advanced analytical environment. The focus is on analyzing the data, rather than structuring and storing the data. Such environment gives a perfect sandbox for experts to ‘experiment’ with data and derive intelligence out of it. For example, Insurance actuaries can derive specific patterns out of claims history data by linking external factors with loss events and define rules for pricing and loss predictions.
2. Don’t just predict, but adapt continuously to changing realities
Big data technologies provide machine learning capabilities that allow calibrating predictive models continuously by comparing actual outcomes with predictions.
3. Change ‘Forecasting’ to ‘Now-casting’
Big data technologies can help in analyzing large stream of data at real-time, without hampering performance. This capability can be used effectively to provide ‘real-time’ analytics. For example, Insurers can define new products that charge premiums based on real-time risk data emitted by sensors or telematics instruments, rather than traditional approach of calculating premiums based on forecasting of risks.
4. Don’t get constrained by a Data model
Have you ever undergone the pain of living with a data model that no longer supports business requirements? Well, don’t worry anymore. Most Big data technologies support ‘Open format’ and dynamic changes to data records to suit analytical needs.
5. Forget Massive data movements
In big data platforms, the data is co-located with analytical processing involving minimal data movements. Forget about those large, multi-year ETL programs.
6. Save cost with low-cost commodity hardware
Large data warehousing and MDM programs often require expensive enterprise hardware and licensing to support desired level of performance. This expense can be as large as 50% of your total cost of ownership (TCO). The big data platforms are designed to work with low-cost commodity hardware (including bursting on cloud), and most are open-sourced. This can help you slash the hardware/licensing costs significantly.
So the moral of the story is – Big data technologies provide many capabilities that make them an attractive choice for ‘small data’ analytics as well. Be innovative in leveraging these capabilities to complement your current analytics world.

Big Data - A solution in search of a problem !

What does Big Data solve in Insurance, that cannot be really solved by traditional technologies? This one seemingly simple question generates a good deal of brainstorming. Let’s keep Health insurance aside (that’s easy) and think about P&C and Life insurance space.

Where is the big data ?

Number Uno is Social data, ever growing and less contextual, but BIG it is.
Then we have policy data over years. We, of course, have a loss history of several years.
We have external risk data sources.
Few companies may also have real-time data streams from Cars (PAYD or commercial fleets), factories etc..

What can we do with Big Data technologies?

Sure we have many problems.
First, we need to know customers better.
How many times we tell them that you can save $400 by switching and then when they ask for a quote, we provide a quote more than their current outgo.
Do we congratulate them when they have a new baby arrival at home?
Do we know that they are looking to buy a car?
With big data, we will be able to co-relate all the seemingly unrelated data sources and link them to derive the actionable intelligence.

Another application is Fraud detection. Some people are out of bars, just because we cannot practically spend time and energy to figure out their fraud. Big Data technology makes is possible and simpler.

What about Risk Analysis? Sure! More the data you have, more you know about your customers, you are likely to predict the risk better.

The real advantage
To some extent, we are doing all this with current traditional technologies as well. More the data, Merrier it is, so big data technologies will definitely help, but is that all?
In my opinion, the real advantage of Big Data is to find the problem (or opportunity) that you do not even know about. When a data scientist dives deep into data and finds patterns and co-relates, there will be an Eureka moment, that will provide you the real ‘intelligence’ hidden in this data. Indeed, Big Data is a solution in search of a problem!

An ounce of knowledge is worth a ton of data

As my colleagues return from Insurance CIO summit and other conferences, I am getting bombarded with questions and suggestions of leveraging the BIG social data.. There are many ideas floating - targeted marketing, risk evaluation etc..
Well, I adopted words of Dr. Fayyad (Yahoo’s ex chief data officer) to reply back - An ounce of knowledge is worth a ton of data!

Notwithstanding the legal and moral issues, the availability of this data does not mean 'availability of knowledge'.

The models put on this data are sometimes completely inadequate to generate any useful insight for insurers. Even if there are any, it is hard to tie back these insights to specific customers or prospects, thereby, making those completely non-actionable.

I think, the insurers will gain more, if they focus on generating 'insights' from the already available data, before looking at acquiring more data. There is a plenty of structured and un-structured data available within the premises of the organization, across several touch points.
How much that is being utilized? Do we have models to analyze the data and generate insights and predictions? Is this intelligence already integrated with the business processes - from customer acquisition, to underwriting and claims processing?
I think, we need to WALK before we RUN.

What if two Turkeys make an eagle?

If you follow ‘Mobile world’ news like I do, you might have already heard about partnership between Nokia and Microsoft, and Google’s trash-talk in response – “Two Turkeys do not make an Eagle”.
Cut to one year back – when android itself was a Turkey, however, they pretty much turned themselves into an Eagle. If you trust in Gartner’s figures, Android market share has risen from 3.5% in 2009 to 17% in 2010 and it is on its way to 22% this year. See - http://www.gartner.com/it/page.jsp?id=1434613 .
Nokia’s Symbian has highest share so far and having seen a world (e.g. India) completely dominated by Nokia phones, I believe they will put up a pretty serious fight for Apple and Google.
What does this mean to us in Insurance industry, who are developing mobile business apps? I think, these developments make a clear case for ‘cross-platform’ development. Rather than, making an application specifically for iPhone or Android, it’s time to seriously consider cross platform development platforms. A hybrid approach with combination of common ‘Portable’ code and some sexier ‘Native’ features appears as a good balance that provides functionality with oomph.

Naturally Yours,

The stars are getting aligned for Natural User Interface (NUI) technologies, with widespread adoptions of touch phones and pads, and recent advancements in consumer technologies such as Xbox Kinect. Consumers have progressed from ‘liking’ to ‘expecting’ natural multi-touch interface. Many technologies are already creative waves.  In L&T Infotech, our Tech office experimented with Microsoft Surface and I was amazed to see the possibilities. Touch IT

I suspect that we will see explosion of application of these technologies everywhere in coming years…!  Consumer electronics industry such as Gaming, Phones, and computers will naturally be far ahead, however, I wonder where we will use this in Insurance industry.

I bet it will be for marketing splash and customer acquisition. I can see consumers leaning on the interactive tables and playing with Geco to understand different parts of policies OR interacting with cute Progressive lady to name their price. Who says buying insurance cannot be fun?

- Amit Unde

What Insurers need to ‘UnThink’

KFC created quite a buzz with the launch of its "Unthink" campaign. By 'unthinking' their fried fast food, KFC is aligning to the choices of new generation, which is far more health conscious and even cost conscious (at least in these days). Keeping aside the recent marketing blunder (with free chicken and Oprah), I liked their ‘UnThink’ principal.

Should not every business do this? We are so used to our usual ways of doing business that we never really 'Unthink'. Although, we constantly strive to achieve efficiencies, and excellence in what we are doing, we actually never stop and question - is this a right thing to do?

Here are my thoughts on what (most of the) Insurers can 'Unthink' -

1) Online presence –
Most insurers do business through independent agents. The bulk of the business comes from agents, so the insurers tend to ignore the direct channel completely. Is this sustainable strategy? The value of Agent’s counseling can not be denied, however, there is a growing population who prefer to research, learn, connect and buy online. Their online world is now not just limited to computers and internet, it has expanded to mobile phones, and 3GS as well. You need online presence and strong channel partnerships not just for providing direct access for sale and servicing, but also for connecting consumers to your agents.

2) Risk Management –
The one thing the recession has taught us is importance of Risk Management. This year really distinguished the insurance companies who do risk management well from those who do not. Are your risk management techniques, actuarial models and financial tools modern enough to manage the risks effectively?

3) Innovation Strategy –
Do you ask for the Business case for every program or project? Well, UnThink. You might be just killing the innovation in your company.

3.95) Customer intelligence –
How much do you know about your customers? Do you know why they are with you and why will they stay with you? Do you know what you can cross-sell to them or to somebody in their household?
Your legacy systems and acquired systems might be holding you back by not providing a single view of customers and enough intelligence about them. It’s time to UnThink and challenge the status quo.

What’s with 3.95? Well, I like this number :)

- Amit Unde

Cloud computing or not – Should you really care?

I was reading a debate between Private and Public cloud computing installations on David Tweedy’s article on Business Insurance . It seems that every vendor is now replacing ‘ASP’ by ‘Cloud’ and jumping on the bandwagon. ( Not that it is completely wrong in every case.) Another interesting aspect is that the public cloud computing infrastructure such as Amazon, SalesForce is enabling relatively smaller vendors to provide a reliable, specialized and cheaper services to their customers.
It is all good, but I have a problem with the marketing hype and jargons surrounding all these offerings. The words like Cloud, SaaS, ASP confuses the hell out of you without realizing the exact benefits of the offered service. Really, should the business care if the hosted service is a perfect ‘Cloud computing’ or not?

I would say - yes, however, rather than going by the word, they should look deep for the meaning of the word. So, what makes a perfect Cloud computing environment for hosted applications? and what does it mean in business terms?

Here are some thoughts -
1) Hosting Model - When you choose a Cloud based application, you should not be worried about Technology infrastructure beneath the application, in fact, and you have no control over it. All you should worry about is the Service levels. This is same as the most of the traditional hosted ASP models.
2) Scalable, reliable Infrastructure - The application should be highly reliable, available 24 X 7 and should perform at the optimum level. In other words, the infrastructure supporting the application should be equipped to support your growing business needs and also those of all your fellow businesses, using the same hosted application.
You should ask your vendors questions to clarify how they are planning to scale their infrastructure, especially when they add more and more customers. A virtualized environment is typically deployed to dynamically scale the infrastructure.
3) Customizability (or in terms of jargon ‘Multi-tenancy) - It should be quicker and inexpensive to implement the customization that you need and it should not degrade the performance. In other words, the application should be built in such a way that the customization is considered in the basic architecture. For example, every time you ask for new variable, the vendor should not add a new table or column in their database. Such a design becomes unwieldy as you add more customizations or vendor adds new customers. A new paradigm of architecture called ‘Multi-tenant’ architecture is often used in Cloud computing environment to address these issues.
4) Security - Your business data should be secure from errors, hackers and disasters. Ask vendors about the database and data structure – whether the data is logically and physically separated, user access control, transportation security, storage security ( encryption mechanism) etc.

So, unless your vendor provides minimum of above 4 points, don’t let them claim their application as ‘Cloud’ based application. In my experience, many vendors do not satisfy 2, 3 and 4. If they are offering hosted service, they tend to call it ‘Cloud’ based service.

- Amit Unde

Ignoring Blackberry for your Mobile app - Not a good idea !

I see that many insurance companies are competing to release Consumer facing applications on iPhone, but they are not doing it for Blackberry or any other smart phones. Is it really a good idea?

Contrary to popular beliefs, iPhone does not have the largest market share in Smart phones, but in fact, it is Blackberry (RIM), who is leading the front.

According to latest research released by ComScore, around 36 million Americans use SmartPhones. Out of which 41% market share is with Blackberry and 25% is with Apple. Apple’s growth has been good, but it is not taking it from the Blackberry. Surprising, the Blackberry growth in year 2009 is better than that of Apple.

It will be interesting to look at the age groups. I bet that the Blackberry is being used mostly by business executives, whereas the iPhone is more popular with younger generation.
Question is - What will be the target audience for Insurance companies and which phone they are likely to use?
I would not take any chances and support Blackberry platform as well.

Reference - http://www.fiercedeveloper.com/pages/what-were-top-smartphone-operating-systems-october

- Amit Unde

Oracle in Insurance

By the close of 2009 Oracle had acquired 56 companies--30 of which filled out Oracle's applications portfolio, and 26 of which spruced up its technology lines of business. As Oracle’s marketing team points out 100 of Fortune 100 uses Oracle and in Insurance 20 out of Top 20 uses Oracle Applications.
The strategy has given Oracle broader market leverage with a full stack of Technologies and also the domain specific offerings.

How does it matter to Insurance?

It has been over a year since Oracle created a separate global business unit focusing on the Insurance industry. It has provided some sense of how Oracle wants to integrate the acquired assets and the future direction – at least on the paper. Oracle has a full set of product servicing Insurance, starting from a Policy Admin system, Claims system, Rating, Financial/Billing, CRM, document generation, Data warehousing, Reporting to name a few. It also has a complete set of middleware technologies – thanks to BEA and Sun.
Oracle is already showing results. It has closed many deals with likes of Marsh and Farmers to set the tone for the coming year.

My take – I think, Oracle is serious contender in the Insurance industry. It's industry focus is a BIG PLUS.
It will be of advantage to mid-size insurance companies to be an 'Oracle Shop' and leverage synergies and volume discounts. Also, as Oracle has presence in almost every big organization, it will definitely penetrate more into many of those. I think, it’s time to stop ridiculing the Oracle for their aggressive acquisition strategy and start paying attention to how it can be leveraged.

- Amit Unde