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SWOC DAMA 2008 Showcase at American Modern Insurance

SWOC DAMA 2008 Showcase at American Modern Insurance. February 21, 2008. Showcase Agenda. Background/Business Case 20 minutes Sandy Wagner Data Warehouse – AIIM 20 minutes Latha Subramanian Data Model – AIIM 20 minutes Duke Ganote Information Management – AIIM 20 minutes Dan Daly

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SWOC DAMA 2008 Showcase at American Modern Insurance

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  1. SWOC DAMA 2008 Showcase at American Modern Insurance February 21, 2008

  2. Showcase Agenda • Background/Business Case 20 minutes Sandy Wagner • Data Warehouse – AIIM 20 minutes Latha Subramanian • Data Model – AIIM 20 minutes Duke Ganote • Information Management – AIIM 20 minutes Dan Daly • Q& A – Duke/Sandy/Latha/Dan 20 minutes

  3. American Modern InsuranceCompany Background • Founded in 1938 as a consumer finance company • Provider of highly focused, specialty insurance products • Positioned to grow into a multi-billion dollar organization • Entrepreneurial spirit & deep commitment of employees • Approximately 1200 employees country-wide, with 1000 employees in eastern Cincinnati area (Amelia)

  4. American Modern InsuranceCompany Background • The organization believes that the strategic deployment of technology can help it achieve, and sustain, a competitive advantage. • As stated in its Operating Principles, “Our investment in information technology is part of a carefully planned strategy to ensure that American Modern's company-wide infrastructure is among the most advanced in the specialty insurance industry.”

  5. American Modern InsuranceInitiative Background In 2000, American Modern embarked upon long-range initiative, coined “modernLINK,” • Business and IT collaboration • Business case and funding Three prongs: • Web-enable insurance transaction processing • Replace aging legacy processing systems • Develop a Knowledge Management architecture

  6. American Modern InsuranceBusiness Case • The anticipated returns of this business case were: • 20% annual increases in directly-attributed new business • 37% of Policy and Partner Administration moved from existing internal units directly to point of service • 25% improvement in current Product Review and Management cycle time • 21% improvement in Product Filings cycle time • 2% reduction in total loss ratio directly attributed to modernLINK initiative

  7. American Modern InsuranceBusiness Case • These returns would yield a significant recurring annual benefit through additional premium, increased profit, and decreased expenses • Almost 50% of these benefits would be attained through better knowledge/data management, richer data segmentation, and improved data and risk selection • John Hayden, President and CEO, American Modern states: • We must have accurate data about the risks we insure today if we are to ever be successful in establishing The Right Rate for Every Risk we choose to insure in the future.

  8. American Modern InsuranceKnowledge Management Roadmap • Enterprise Data Model • Operational Data Store • Enterprise Data Warehouse • Themed analytic data marts • Enterprise reporting portal • Metadata management • Data Stewardship

  9. American Modern InsuranceKnowledge Management Results • Business users can: • Make informed decisions • Respond quickly to new business initiatives • Create new opportunities • Business users are: • Moving from data collectors to data consumers • Asking “why” instead of “what”

  10. American Modern InsuranceKnowledge Management Results • Retention – Joe David. In the last four years, we have leveraged the corporate reporting tools to develop a series of targeted strategies that have allowed us to improve retention by nearly eight points, which equates to annualized premium of nearly $60 million • Claims. Integration of 3rd party Claim data - Heather Bolyard. This one-month sample of data for one material has identified a potential indemnity reduction of $70,000. • Reserving – Gene Stetler. The new Loss Reserving data store from the Enterprise Data Warehouse has enabled process efficiencies, thus allowing us to predict our reserving needs with accuracy. • Product – Kevin Randall. The implementation of American Modern's data warehouse has been a significant part of the successful launch of the company's right rate for every risk initiative

  11. American Modern Insurance2007 Awards and Recognition In 2007, American Modern received two awards from Computerworld: • Laureate - The laureate status for the Enterprise Data Warehouse presented at the Carnegie Mellon Auditorium in Washington D.C – June 2007 • BI Award - Best Practices in Business Intelligence in the category “Creating an Agile BI Infrastructure” presented in Las Vegas, NV – September 2007

  12. Showcase Agenda • Background/Business Case 20 minutes Sandy Wagner • Data Warehouse – AIIM 20 minutes Latha Subramanian • Data Model – AIIM 20 minutes Duke Ganote • Information Management – AIIM 20 minutes Dan Daly • Q& A – Duke/Sandy/Latha/Dan 20 minutes

  13. Enterprise Data Warehouse • Create an implementation roadmap • Content scope – January 1998 thru present • All products loaded over 5 years • Implement “value” after each iteration • Loss Cost, Retention, Loss Triangles • Establish Data Stewardship - 2004

  14. Loss Cost Analysis Retention Analysis Product Pricing Analysis Data Warehouse modernLINK Reporting Profitability Analysis Financial Analysis Underwriting Analysis Enterprise Data Warehouse The data warehouse will support:

  15. MH Loss Cost SB Loss Cost MC Loss Cost Retention UVRC Pricing / GLM Loss Triangles modernLINK MH PIF mLINK vs. Legacy Retro Studies Mapping Renewal Reporting FID MSB CAT Analysis Cancellation Reporting Address Data Partner Experience Reporting Agency Profile Analysis Claims Liability Data Warehouse Value

  16. Data Warehouse Statistics 1997 policies used to seed warehouse: ~700,000 Total policies Jan 1998 thru Jun 2007 Total units Jan 1998 thru Jun 2007 Average Number of Coverages per policy: 5 Average number of policies in-force per month: 800,000 Average number of claims per month: 8,000

  17. Data Warehouse Benefits • Single version of the truth • Data integrated at the lowest level • High-end hardware platform • Codes translated to “English” terms • Resolve source system problems • Data quality review and correction • Integration of external information

  18. Data Mart Themes • modernLINK quote • Exposure • Retention • Experience • Loss Cost • Claims • Underwriting

  19. Technology Enablers…. • IBM RS6000 AIX processors • EMC data storage • Oracle DBMS • COGNOS for reporting utilizing query, report, mapping and analytical tools • Websphere Portal • LDAP for single sign-on

  20. Showcase Agenda • Background/Business Case 20 minutes Sandy Wagner • Data Warehouse – AIIM 20 minutes Latha Subramanian • Data Model – AIIM 20 minutes Duke Ganote • Information Management – AIIM 20 minutes Dan Daly • Q& A – Duke/Sandy/Latha/Dan 20 minutes

  21. Data Model • Provides a common, integrated way for the corporation to view and to communicate about its business • Allows the business to drive the system • Creates standard definitions/documentation • Provides structure to new development projects

  22. Enterprise Data Model

  23. AMIG Enterprise Data Model Jump Start Enterprise Data Model Generic Model based on Insurance Industry Practices Acord Standards Integrated View: Common Data Definitions Across business Transform AMIG Specific Requirements Manufactured Home Site Built Motorcycle Motor Home Travel Trailer Classic Auto FID Commercial

  24. Data Model Benefits • Foundation for: • modernLINK rate & quote applications • Data warehouse/data mart/analytic design • mLP3 Operational Data Store (ODS) design • New projects simply add to the model • Insurance score • Claims liability • Development of data standards and a common “language”

  25. Inmon, Initially • Data warehouse built using Inmon approach: Source (non- relational) Data Warehouse (normalized) DataMart (star) End of month End of month “Corporate Information Factory Components”, W. H. Inmon http://www.inmoncif.com/view/26

  26. Conformance Retention Mart (star) Conformed Dimensions: Conformed Dimensions Pricing DataMart (star) Data Warehouse (normalized) Loss Cost DataMart (star) “The 38 Subsystems of ETL”, Ralph Kimball http://www.intelligententerprise.com/showArticle.jhtml?articleID=54200319

  27. Challenges • Multiple sources • Latency • Stewardship

  28. Multiple Sources OPPORTUNITIES: • Daily claims/catastrophe feeds • 3rd party Claim data (claims cost standards) • Huon (an new Insurance ERP) • Munich RE (pending merger with reinsurer)

  29. Multiple Sources RESPONSES: • Pull data: generally from relational DBMS, e.g. DB2, Informix, SQL Server • Push data: generally from non-relational DBMS: DMS II (Unisys)

  30. Latency Changes OPPORTUNITY: Daily information • Catastrophe reporting; e.g. Hurricane Katrina 2005, “Fab Four” of 2004 • Financial Institutions requesting daily account information on insureds.

  31. Latency Changes • RESPONSE: Kimball architecture Daily Conformed Dimensions daily daily Source (OLTP) CATastrophe DataMart (star) daily daily Staging Area “Kimball Design Tip #34: You Don’t Need an EDW”, Ralph Kimballhttp://www.kimballgroup.com/html/designtipsPDF/DesignTips2002/KimballDT34YouDontNeed.pdf

  32. Latency Changes Kimball Architecture “The staging area is exactly like the kitchen in a restaurant. The kitchen is a busy, even dangerous, place filled with sharp knives and hot liquids. The cooks are busy, focused on the task of preparing the food. It just isn't appropriate to allow diners into a professional kitchen or allow the cooks to be distracted with the very separate issues of the fine dining experience. ” Two Powerful Ideas: foundations for modern data warehousing, Ralph Kimball Sept 17, 2002: http://www.intelligententerprise.com/020917/515warehouse1_1.jhtml

  33. Data Stewardship OPPORTUNITY: Daily instead of monthly reference data needed. However, for example, no dailysystem of record automated for: • Claims Adjusters • Catastrophe name/details

  34. Data Stewardship RESPONSE: • Data stewards maintain master data / system of record. • Over night ETL uses master data for building dimension. • Referential integrity always enforced with fact table, so data stewards cannot “delete” required for integrity.

  35. Showcase Agenda • Background/Business Case 20 minutes Sandy Wagner • Data Warehouse – AIIM 20 minutes Latha Subramanian • Data Model – AIIM 20 minutes Duke Ganote • Information Management – AIIM 20 minutes Dan Daly • Q& A – Duke/Sandy/Latha/Dan 20 minutes

  36. Information Management Benefits • Single BI Architecture • Provides a consistent view of our Corporate Data • Allows for common product training & support • Volume license pricing provides flexibility and cost savings • Converting Data Collectors to Information Consumers • Corporate Portal Integration • Delivering specific information to specific business users • Providing pre-emptive alerts to users based on specific (data) events

  37. Single BI Architecture(Consistent View, Common Training & Support & Volume Pricing) • Using Cognos 8.2 for our Enterprise Reporting Portal • Report Studio, Analysis Studio, Query Studio, Event Studio, Metric Studio • All Cognos Content Provided in Themes • modernLINK quote • Exposure • Retention • Experience • Loss Cost • Claims • Underwriting

  38. Single BI Architecture(Consistent View, Common Training & Support & Volume Pricing)

  39. Converting Data Collectors to Information Consumers • Corporate Portal Integration

  40. Converting Data Collectors to Information Consumers • Delivering specific content to specific users • ‘Bursting’ Experience & Exposure information directly to our Business Partners (Agents)

  41. Converting Data Collectors to Information Consumers • Providing pre-emptive alerts to users based on specific (data) events

  42. So What’s Next? • Spend more time executing strategy & less time gathering data • Manage to Corporate Scorecards / Performance Metrics

  43. Showcase Agenda • Background/Business Case 20 minutes Sandy Wagner • Data Warehouse – AIIM 20 minutes Latha Subramanian • Data Model – AIIM 20 minutes Duke Ganote • Information Management – AIIM 20 minutes Dan Daly • Q& A – Duke/Sandy/Latha/Dan 20 minutes

  44. Q & A session

  45. Wrap Up • Enterprise Data Warehouse now in its 7th year • Business units embrace the DW • Holistic view of information in one place • Next phase: deliver similar functionality to our external business partners • Our case study has been placed in National Archives • The copy of the case study can be found on the following web page: http://www.cwhonors.org/viewCaseStudy.asp?NominationID=54

  46. SWOC DAMA 2008 Showcase at American Modern Insurance February 21, 2008

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