Analytics for actuarial transformation in insurance and account level profitability for financial services

Analytics for actuarial transformation

Advanced business analytics platforms embody the skills, technologies and practices involved in continuous iterative exploration, providing organisations with valuable insight into past business performance in order to plan effectively for the future.

To maximise ROI, organisations must leverage their platform’s full potential. However, without flexibility, this isn’t possible. To ensure that our customers can tap into the possibilities of analytics for business enablement, we’ve teamed up with Demarq, an independent technical consultancy specialising in analytics, business intelligence and data management.

In a recent webinar, our Head of Sales & Marketing, Chris Smith, chatted to Demarq’s Director, David Francis, to find out more about Demarq’s services, particularly in relation to the insurance and financial services sectors. We also spoke to IBM’s Chief Technology Officer, David Spurway, to better understand the benefits of running SaaS on IBM Power.

Analytics trends in insurance and financial services

Demarq focuses on the design/delivery of analytics solutions across several verticals. However it, has a strong customer base in financial services and insurance. According to Francis, the two key areas that are currently driving his team’s focus are around cloud and customisation.

i) Cloud

Francis explains that “a lot of early adopters are now looking to refine their strategies”, especially where a return on investment isn’t evident. Companies are “looking at moving away from some of the bigger vendors to partner with organisations like Blue Chip, for example, who can offer a much more tailored and flexible service.”

ii) Customisation

To enable customers to compete, “there’s a big focus on driving business benefits and outcomes around service models at the moment,” explains Francis.

Companies aren’t necessarily “taking on large complex infrastructures or application layers” themselves. Instead, they’re “leaving that to the experts and allowing their data scientists and analysts to focus on the original goal of driving business outcomes and value.”

Francis and his team strive to remove as many preconceived ideas around how to create an analytics solution while remaining “laser-focused on the business outcomes”. As a result, the customer tends to get a bespoke – or at least a blended – vendor software solution that is completely focused on driving business outcomes.

Actuarial transformation for insurance

“There’s a requirement within the insurance industry to become better at pricing, to keep that competitive edge,” says Francis.

“We see technology as an enabler or an enhancer. You still need those data scientists, but if you keep those data scientists focused on what they do – the modelling and analysis of data – the technology should support that and drive insights in the best possible way.”

Businesses are coming to the realisation that in terms of advanced analytics, their competitors are modernising and drawing on more advanced capabilities. Integrating with open source and using greater volumes of data requires ‘a more advanced platform than perhaps a lot of insurers have in place.’

Demarq’s aim is to provide a “robust, scalable and AI-ready platform, one that enhances the end users’ ability to deliver analytics at a much faster pace” with an IP that focuses on workload management, audit log in, resilience and availability.

“What we’re not doing is dumping a load of hardware on customers and going there you go, you can use that,” highlights Francis. “We provide this as a service model alongside our partners’ ecosystem, partners like Blue Chip, to host the platform that removes the pain points of managing the complex infrastructure.”

And it doesn’t stop there.

Driving ROI across the whole business

Demarq offers scalable, performant platforms that drive ROI in different areas.

“One of the major companies we’ve delivered our pricing actuarial transformation solution to is now using its platform for fraud investigations,” Francis continues.

“These are very modern and capable solutions that form part of the package we deliver and so the use cases are spread well across businesses. In fact, I’d go as far to say that if the customer only uses it for pricing optimisation, they’re missing a trick.”

Accountable profitability for financial services

Demarq’s Account Level Profit (ALP) solution was born out of a conversation with a C-level banking executive who has since become a partner, alongside one of the UK’s leading banks and a technology firm. The solution is all about answering the common questions in financial services, especially the credit card industry.

ALP Demarq enables finance services firms to gain insight to their most profitable customers (and vice versa) using granular-level data. Broadly speaking, product data, accounts receivable and general ledger data is taken through to a ‘unified warehouse’, after which business descriptions and data quality processes are applied.

“We allocate the costs against customers’ individual accounts or cohort levels which is reconciled in the general ledger,” explains Francis. “So what you end up with is a true understanding of what it costs to manage that individual customer or cohort.”

“It’s an extremely trustworthy single version of the truth that the bank can rely on. We’ve got a couple of early adopters and the solution is due for release in Q1 2021.”

Running analytics SaaS on IBM Power

Spurway explains that in terms of IT architecture, a lot of organisations find themselves having expanded beyond what they initially required, highlighting that “the growth of data can result in bottlenecks taking place across the system”, rendering it ineffective.

For both SaaS and Saas Fire, IBM uses a combination of resilience, agility and heightened security to reduce risk and eliminate bottlenecks. More specifically, according to Spurway, IBM is able to do this through “very high IO speeds and lots of memory – much larger than competitive architecture such as X86.”

As well as enabling users to get quick access to the answers they need when they need them, IBM allows them to scale very effectively.

“We can use the virtualisation flexibilities of the platform to be able to have both systems running on the same hardware and share the resources as one workflow moves up and down as required,” says Spurway.

Again, this makes the system resistant to failure as well as planned and unplanned outages. IBM has a new generation of power processors coming out soon, and some will directly benefit this use case as well as AI and customisation.

Hyperscaling complex AI workloads into the cloud

The flexibility of Blue Chip’s infrastructure is what caught Francis’ attention – a level of flexibility that aligns with Dermarq’s own ethos.

“When we sell to a customer, we’re not just shoehorning a square peg into a round hole,” explains Francis. “When we deliver a solution it needs to permeate right through the applications, down into the infrastructure and architecture it sits on.”

“It’s great to work with an organisation like Blue Chip that is able to tailor their offering to the requirements of the customer and have very open conversations around using Power.”

If you work in the insurance or financial services industry and would like to find out more about how Dermarq and Blue Chip can drive business enablement in your organisation, get in touch. Submit an enquiry via our contact form and a consultant will get back to you.

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