turning digital disruption into innovation

Turning Digital Disruption into Innovation with Data & Analytics

Global Big Data Conference, Santa Clara

Pat Saporito, Sr. Director, Global Analytics COE, SAP

August 31, 2016

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 2Public

Digital: The 4th Wave of Information Technology

1850

Industrial

economy

2020

Digital

economy

1990

Internet

economy

IT

economy

1970

$0.36T

$12.10T

All figures are in Trillions; 1990 international dollars; Source: Department of Economics, UC Berkeley, BAIN 8 MacroTrends Brief.

$27.50T

© 2016 SAP SE or an SAP affiliate company. All rights reserved.

$90.0T

Gross

world

product


Living in a Digital Economy

Last two years Last two years End of 2020 End of 2020 In 2014

1 ScienceDaily, May 22, 2015 2 Technology Adoption Report on Business Networks, Ardent Partners

3 Internet of Things (IoT) 2013 to 2020 Market Forecast: Billions of Things, Trillions of Dollars, IDC 4 Statista

5 Cisco Global Cloud Index: Forecast and Methodology for 2013–2018, Cisco Systems Inc.

90%Of the world’sdata has been

generated1

40%Growth in

adoption of business

networks2

212 Billion

“Things” willbe connected3

9Billion

Mobile usersin the world4

51%Of workloadsprocessed in

the cloud5


SOMETHING

INTERESTING IS

HAPPENING.

New Business Models

AlibabaThe most valuable retailer, has no inventory.

4

UberThe world’s largest

taxi company, owns no vehicles.

AirbnbThe world’s largest accommodation provider, owns no real estate.

FacebookThe world’s most

popular media owner, creates no

content.


Insurance Industry Disrupters

Trends

Peer to Peer Insurance

Usage Based Insurance

Spot Insurance

Contract/or

Management

Aggregators/Quote

Engines

More InsurTech Sources:

CB Insights InsureTech Blog

TechCrunch Insurance

http://www.cbinsights.com/blog/category/insurance-tech

https://techcrunch.com/tag/insurance/


The Analytics Native

Acquired by Monsanto for ~ $1 Bil.

Bayer recently made a $62 Bil. Bid for Monsanto!

200+ data scientists analyzing 50 terabytes of weather data/day!

The Climate Corporation aims to help farmers around the world

protect and improve their farming operations with uniquely

powerful software and insurance products. …proprietary

technology platform combines hyper-local weather monitoring,

agronomic data modeling, and high-resolution weather

simulations to deliver climate.com, a solution that helps farmers

improve their profits by making better informed operating and

financing decisions, and Total Weather Insurance, an insurance

offering that pays farmers automatically for bad weather that may

impact their profits.

Backed by Founders Fund, Khosla, Google Ventures, NEA, Index

Ventures and Atomico.

http://www.climate.com/

http://www.climate.com/

http://www.foundersfund.com/

http://www.khoslaventures.com/

http://www.googleventures.com/

http://www.google.com/

http://www.indexventures.com/

http://www.atomico.com/


Partner, Invest, Innovate

!

Insurers are using

their venture capital

funds to invest in

innovation!


Data & Analytics as a Core Competency

Business model is based on

behavior science.

Uses thousands of analytic

models to classify and underwrite

risk, adjust claims and help

improve member’s health and

wellness.

Customer life time value focused

Variety of customer engagement

tools and incentives

https://www.discovery.co.za/portal/individual/vitality-latest-news

https://www.discovery.co.za/portal/individual/vitality-latest-news


World Class Data & Analytics; Often Described, Rarely Achieved

Chasm between what we hear … and what we see!


Analytic Evolution

Raw

Data

Cleaned

Data

Standard Reports

Ad Hoc Reports

& OLAP

Agile Visualization

Predictive Modeling

Optimization

What happened?

Why did it happen?

What will happen?

What is

the best that

could happen?

Us

er

En

ga

ge

me

nt

Maturity of Analytics Capabilities

Self Service BI

Generic

Predictive Analysis

Co

lle

cti

ve

In

sig

ht


Digital Evolution or Revolution?

Changing Customer Expectations

Changing Risk Exposures

New Partners

New Competitors – including digital start ups

New Business Models

REFER

FRIENDS

POST

REVIEW

JOIN

GROUPS

TRACK

ORDER

RECEIVE

PACKAGE

MISSING

ITEM

SETUP

PHONE

BILLING

ISSUE

MAKE

PAYMENT

PHONE

DAMAGE

TERMINATE

SERVICE

NETWORK

ISSUE

CHANGE

ADDRESS

RECEIVE

OFFER

DISCOVER

NEED

RESEARCH

RECEIVE

OFFER

USE

SERVICE

RESTART

SERVICE

SHOP &

BUYPURCHASE

RECEIVE

INFOR-

MATION

MISSING

ITEM

POST

REVIEW

HELP &

SUPPORT

BILLING

ISSUE

MAKE

PAYMENT

REPAIR

REPLACE

JOIN

GROUPS

CLAIMS

INCIDENT

CHANGE

ADDRESS

ADDITIONAL

PURCHASE

RECEIVE

OFFER

REFER

FRIENDS

WEB

PRINT

DIGITAL

ADS

WORD OF

MOUTH

SOCIAL

TV

AGENT

WEB

SITE

REVIEWS

SEARCH

KW/ADS

CONTACT

CENTER

WEB

SITE

EMAIL

SOCIAL

AGENTWEB

SITE

CONTACT

CENTER

CONTACT

CENTER

AGENT

CONTACT

CENTER

CONTACT

CENTERSOCIAL

WORD OF

MOUTH

SOCIAL

EMAIL

SUPPORT

PORTAL

?

SUPPORT

PORTAL

?

BRANDED

COMMUNITY

?

AWARENESS

INTEREST

DECISION

ACTION

USE

ACTION

ADVOCACY

ADVOCACY

DECISION

USE

Every customer

chooses his own path!

© 2016 SAP SE or an SAP affiliate company. All rights reserved.


Digital (R)EVOLUTION?: Objective

Extend the addressable market

New digitally enabled

insurance products

Today Tomorrow

Core insurance business

New non-insurance offers

New digitally enabled

premium services

Core insurance business

Property & casualty insurance

Life insurance

Health insurance

Banking

Property & casualty insurance

Life insurance

Health insurance

Banking

Telematics (e.g., Pay as you drive (PAYD); Pay as you live (PAYL)

Simple Insurance

Context based offerings and next best offer

Smart Pricing

Retargeting

Infotainment

More advanced digital sales support for brokers and agents

Financial coaching; tire change; collection and delivery service;

retirement planning; eCall, …

Ecosystem; partner offers (for example: tires)

Use case examples


Digital core

Omnichannel

network

The Internet of Things

network

Service and supplier

network

Workforce network

Front

office

Middle office Back office

Real Time Data Platform

Property Life Health

Real Time Data & Analytics – Engine for Digital Transformation!

Digital Framework for Insurers

Personalized experience

Reduce FTE costs

Engaged partners & suppliers

Optimized risk management

Operational AgilityDigital Orchestration Analytic Transparency


GOVERN

Analytics Value Cycle

15

PREDICT

VISUALIZE& DISCOVER

PLAN

ALL USERS ACCESS ANYWHERE

ALL DATA

ALL ANALYTICS

REAL TIME,

ALL THE TIME,

FULL CYCLE

Enterprise

Performance

Mgmt.

Governance,

Risk &

Compliance

BI &

Exploration

Predictive &

Prescriptive


Smart Insurance Architecture: No Touch, Real TimeHybrid – Cloud & On Premise Analytics

CORE APPLICATIONS

ECOMMERCE APPLICATION(S)

PLATFORM

C O N N E C T

CONFIGURATION PORTAL

C O N N E C T

MARKETING PORTAL CRM

Sales/Service

New Bus Acquisition,

Cross-Sell/Up-Sell,

Renewals/ Winbacks

Integration into existing

(customer) portals

CLOUD

New analytics capabilities, build

natively in the Cloud

ON PREMISEExtend, leverage, scalable

on-premise capabilities

MARKETING SUBMIT/QUOTE POLICY BILLING CLAIMS REINSURANCE

Prospect/Customer Data App/Quote Data Policy/Coverage Data

Premium/

Commission Data Claims data Reinsurance Data

SALES

Agent/Sales Data


Insurers who have begun Digital Transformation

• Easy-to-buy, short-term

accident coverage,

distributed through mobile

terminals

• Owner's profile is

determined for 1 month

• Proactive insurance offer is

made when the telephone

detects a need (in an

airport, on a golf course)

• Installs a camera behind

the interior rear view mirror

• Enables driver to see both

inside and outside car

• In the event of an

emergency, the 10

seconds before and after

the incident are recorded

• Video used to coach

drivers online

• "Accident Toolkit" - a self-

service claim application

for policyholders

– Calls emergency

services

– Helps collect and

exchange info after an

accident

– Takes/ stores photos of

accidents

– Initiates claim process

• Insurance coverage

combined with social

networks

• Based on a network of

friends

• Minor damages (up to

mutually shared risk)

covered by the "network of

friends"

• Insurer helps with more

serious damage

• 300% increase in sales

• Mainly on the same day, or

evening before the activity

• Most sales made to 30-40

year-olds

• 70% drop in high-risk

events frequency for

teenagers

• Quicker claim processing

• Reduction in fraud

• Increase in the acceptance

of self-service portals

• Opportunity to interact with

the customer on a mobile

device

• Reduction in fraud

• Improved risk selection

• Decreased sales costs

• Reduction in admin costs,

especially for minor losses


Critical Success Factors

Executive Leadership

Business Driven Data & Analytics Strategy

Organization Structure (People, Processes, Technology)

Data Driven Culture & Democratization

Analytics Sandbox/Innovation Center


SAP Data & Analytics Strategy Framework

Objectives Business Needs Business Benefit Technology Organization

Background and

Purpose

Current State and

History

Objectives and Scope

Summary of Neds

Envisioned To-Be State

Priorities and

Alignment

Value Proposition of

Analytics

Expected Benefits –

Future State KPI

Business Case

Information

Categories

Architecture and

Standards

Applications

Governance Structure

Program Management

Roadmap and

Milestones

Measurement

Education / Training

Support

• Digital must be part of an overall business-driven data & analytics strategy

• Strategy is operationalized by Analytics Competency Center


Digital Transformation Roadmap

Define a Digital

Strategy

• What does digital mean to

your organization? Your

customers? Your

partners?

• How does digital relate to

your strategic

plans/initiatives?

• What are digital

Opportunities? Risks?

•

Conduct a Pilot

• Conduct pilot with existing / new

capabilities

• Test capabilities needed to support

pilot.

• Conduct next pilot

Review your Digital

Capabilities & Culture

• Data management

• Analytics

• Data bases/ platform

• Business Processes

• Skills & Behaviors

• Agility


Next Steps

• Business Intelligence/Analytics Strategy Assessment

• Review your existing people, process and technologies overall and specifically for digital

• Digital Transformation Design Thinking Workshop

• Define and prioritize your digital opportunities

• Digital Transformation Pilot

• Apply digital capabilities for pilot


Resources

SAP Digitalist! Blog

www.digitalistmag.com/

SAP Analytics Strategy Self Assessment Tool

https://sap-bi-strategy-assessment.com/

Hasso Plattner Institute for Design Thinking at Stanford Univ.

http://dschool.stanford.edu/

The Digital Insurer Forum

www.the-digital-insurer.com/

http://www.the-digital-insurer.com/


Thank you!

Pat helps companies form, evolve and leverage a business-driven analytics strategy

to improve business performance. Prior to SAP, she held business development roles

at Teradata and META Group (now part of Gartner).

Pat is a recognized insurance industry thought leader; she is a frequent contributor to

Best Review Technology Insights column and has been on the faculty of the Int’l.

Institute for Analytics, co-founded by Tom Davenport.

She is the author of “Applied Insurance Analytics” and a contributor to “Analytics in

Healthcare and the Life Sciences”, both published by Pearson/FT Press.

Profile

Available on Amazon

Pearson /FT Press &

other channels in print

and/or digitally

Download 1st chapter

(industry overview) free

Patricia SaporitoSr. Director, BI

Global COE for Analytics

SAP Labs, LLC

New York, NY

+1 (201) 681-9671

[email protected]

Blog: www.patsaporito.com

https://www.amazon.com/Applied-Insurance-Analytics-Framework-Technologies/dp/0133760367/ref=sr_1_1?s=books&ie=UTF8&qid=1405435096&sr=1-1&keywords=applied+insurance+analytics

http://www.patsaporito.com/books/applied-insurance-analytics/

mailto:[email protected]