Arnab Dey, Principal

Profile
Arnab Dey, Principal at Inductis has advised a number of large financial services and healthcare insurance clients on product pricing, market segmentation, retention, loyalty, and collection strategy. Recently, he led a study that leveraged data analytics to frame member retention strategy for a large healthcare insurance company. He has also led client engagements to identify and assess investment opportunities and growth areas in financial services. Arnab holds an MBA from Indian Institute of Management (IIM), Ahmedabad, and a BTech in Computer Science from the Indian Institute of Technology (IIT), Kharagpur.

1) What are the challenges faced by US P&C insurance companies today?

The US market has softened over the last couple of years, and companies, particularly the commercial lines insurers are facing a challenge with falling prices to remain competitive. There is a strategic imperative to become cost competitive to maintain margins; and to improve pricing and underwriting.

2) How can analytics help them address those challenges more effectively?

Analytics can support insurers on multiple dimensions:

Pricing and Underwriting: There is a lot of scope to improve the statistical techniques in this area, even for the companies that use off the shelf tools and packages. Commercial insurers can use optimization techniques to improve their debit and credit process. Today pricing focuses on pure premium or loss ratio – next generation models should optimize across acquisition costs, pure premium, retention and agency behavior (in short Lifetime Value)

Claims Analytics: This is a much underleveraged area with the most potential around reducing claims leakage and improving efficiencies through fraud mitigation, early settlement, subrogation, etc

Acquisition and Customer Management: Ideas here include list optimization for direct insurers, agency analytics for agency insurers, retention / persistency improvement, cross-sell and up sell, etc. It can be deployed for enhancing marketing function's Return on Investment (ROI). It can allow insurers to assess how effectively their current marketing dollars are being utilized and what can be done to enhance the same.

Customer Ops and Servicing: Analytics can be deployed to improve customer servicing and operations of insurance companies e.g. through accurate capacity planning, insurers can reduce the burden of customer servicing staff while improving their servicing quality. Further, it can enable an efficient reporting and analysis function which allows insurers to make fact based, data-driven decisions rather than judgment based decisions.

3) What are some of the best practices, "thought leaders" companies are adopting through analytics?

I think some of the best practices that are being adopted in the area are integrating data across the organization and systematically mining it to understand customers and operations better. Most of the large organizations have started thinking along the lines outlined in section 2 – however, a lot remains to be done.