Upload
malcolm-pierce
View
223
Download
0
Tags:
Embed Size (px)
Citation preview
Ratemaking Seminar2005
The Convergence of Technology, The Convergence of Technology, Data Standards & Analytical ToolsData Standards & Analytical Tools
The Need for Better InformationThe Need for Better Information
Arthur R. Cadorine - ISOArthur R. Cadorine - ISO
Insurance Industry StandardsInsurance Industry Standards
Standards for policy and claim Standards for policy and claim transactions are being developedtransactions are being developed
ACORDACORDIAIABCIAIABCIDMAIDMA
These standards will change the industryThese standards will change the industry
Impact of StandardsImpact of Standards
If everyone speaks the same language, If everyone speaks the same language, communication is possiblecommunication is possible
Information quality and timeliness Information quality and timeliness improves improves
Data StandardsData StandardsWho Needs’Em and Why?Who Needs’Em and Why?
Trading partners such as insureds, Trading partners such as insureds, insurers, TPAs, vendors, and brokersinsurers, TPAs, vendors, and brokers
Various sources use different Various sources use different definitionsdefinitions
Need data that is clean and consistentNeed data that is clean and consistent Reduce duplication and costReduce duplication and cost Numerous indirect benefitsNumerous indirect benefits Some obstacles remainSome obstacles remain
Data StandardsData StandardsDon’t They Exist Already?Don’t They Exist Already?
Financial services and some retailers Financial services and some retailers use data standardsuse data standards
Some insurance standards developed Some insurance standards developed for specific applicationsfor specific applications
Standards are not identicalStandards are not identical
Data StandardsData StandardsCurrent Working GroupsCurrent Working Groups
IDMA TPA Data Standards Work GroupIDMA TPA Data Standards Work Group ACORDACORD ANSIANSI RIMSRIMS ISOISO WC Insurance Organizations (WCIO)WC Insurance Organizations (WCIO)
Data StandardsData StandardsCurrent ToolsCurrent Tools
PDRP - GL database for public entitiesPDRP - GL database for public entities IDMA Claims Data Exchange StandardIDMA Claims Data Exchange Standard IDMA Policy Data Element DictionaryIDMA Policy Data Element Dictionary IDMA TPA Data Standards White PaperIDMA TPA Data Standards White Paper www.idma.org/DS-announce.htmlwww.idma.org/DS-announce.html
Value of Knowing SoonerValue of Knowing Sooner
Delays in claims reporting cost moneyDelays in claims reporting cost money
Real-time fraud detection could save $$Real-time fraud detection could save $$
Early claim-trend detection means Early claim-trend detection means corrective premium actioncorrective premium action
Integrating EDI ReportingIntegrating EDI Reporting
Straight-through processingStraight-through processingbecomes possiblebecomes possible
Data quality improvesData quality improves
Information can be aggregatedInformation can be aggregated
ASP model has many advantagesASP model has many advantages
Integration of DataIntegration of Data
ASP can have policy ASP can have policy andand claim databases claim databases
Systems can talk to one anotherSystems can talk to one another
One source/multiple outputs One source/multiple outputs
Analytical ToolsAnalytical Tools
Predictive modelsPredictive models
Web accessWeb access
User-friendly report writers User-friendly report writers
User-friendly analysis softwareUser-friendly analysis software
ASOP #23: Data QualityASOP #23: Data Quality
Purpose is to give guidance in:Purpose is to give guidance in:Selecting dataSelecting dataReviewing data for appropriateness, Reviewing data for appropriateness,
reasonableness, and reasonableness, and comprehensivenesscomprehensiveness
Making appropriate disclosuresMaking appropriate disclosures Does not recommend that actuaries Does not recommend that actuaries
audit dataaudit data
ASAP #23: Data QualityASAP #23: Data QualityConsiderations in Selection of DataConsiderations in Selection of Data
Appropriateness for intended purposeAppropriateness for intended purpose Reasonableness, comprehensiveness, Reasonableness, comprehensiveness,
and consistencyand consistency Limitations of or modifications to dataLimitations of or modifications to data Cost and feasibility of alternativesCost and feasibility of alternatives Sampling methodsSampling methods
ASOP #23: Data QualityASOP #23: Data QualityDefinition of DataDefinition of Data
Numerical, census, or class informationNumerical, census, or class information Not actuarial assumptionsNot actuarial assumptions Not computer softwareNot computer software Definition of comprehensiveDefinition of comprehensive Definition of appropriateDefinition of appropriate
ASAP #23: Data QualityASAP #23: Data QualityOther ConsiderationsOther Considerations
Imperfect DataImperfect Data Reliance on OthersReliance on Others Documentation/DisclosureDocumentation/Disclosure
IDMAIDMA Data Management for InsuranceData Management for Insurance ProfessionalsProfessionals
Chapters at a GlanceChapters at a Glance
I. The History of Insurance Data ManagementI. The History of Insurance Data ManagementII. Role of Insurance Data ManagerII. Role of Insurance Data ManagerIII. Key Data Elements of InsuranceIII. Key Data Elements of Insurance
IV. Insurance Company’s Use of DataIV. Insurance Company’s Use of DataV. The External Insurance EnvironmentV. The External Insurance Environment
VI. Data QualityVI. Data QualityVII. Data RepositoriesVII. Data Repositories
VIII. Future Data Management IssuesVIII. Future Data Management Issues
C.A.S.RATEMAKING SEMINAR
New Orleans 2005
INT-1
Introduction to Insurance Data Management 101
Nathan Root
CNA
A group of people within insurance organizations whose primary day-to-day function is to provide
business managers with the information they need to accomplish the goals and objectives of the
organization.
– Core data managers are involved in: • Internal data coordination
• External data reporting
• Information systems development
• Data administration
Data Managers, Who-What-Where
What is a Data Manager?
• A Data Manager:– Provides data
• To internal customers
• To external customers
– Is concerned that the data provided• Is accurate & consistently derived & defined
• Is readily available and timely
• Is comparable/reconcilable
• Secure
Who are the customers?
• Internal customers include:– ACTUARIES
– Underwriters
– Accountants
– Claims
– Marketing and Distribution Network
– Management
Who are the customers?
• External customers include:– Statistical organization
– Rate making organization
– Insurance research organizations
– Investors
– State & Federal regulators
The data manger’s job?
• To interpret requests for data
• Determine how to obtain data
• Determine where to obtain data
• Control the cost of development and maintenance
• Provide data to customers in appropriate format
Data Management’s Task
The data manager’s task is to assure that the same data
in different systems can be reconciled, that the data
is consistent, and that derived data is defined and
calculated consistently.
Partnerships
Data users are, and should be, involved in a partnership
with insurance data managers.
-A partner in
= defining systems
= building systems
= testing systems
= and final acceptance of a system.
Knowledge and Other Users
Just as Data Managers need and must have knowledge
of the customer’s they serve, so must other insurance
professional understand the Data Manager’s function.
EACH TIME AN INDIVIDUAL WANTS INFORMATION, DATA MANAGEMENT SKILLS COME INTO PLAY.
It must be determined where the data is, how it is identified, how it is defined
AND HOW IT CAN BE VARIFIED.
What do you need to know about Data Management
• Data definitions and how they differ.
• Coding conventions.
• Data redundancy.
• Level of data available/needed.
• Where did the data come from and how is it maintained.
• Schedule for updating.
• Reasonability and reliability of the data.
Who are Insurance Data Managers?
• Managers of data which can be anyone– Professional insurance data managers– Actuaries– Underwriters and Agents– Claims personnel and SIU’s– Marketing personnel and Researchers– Accountants and Economists
Who Owns the Data?
Data use - implies data ownership - which mandates control.
An individual companies data is one of its most valuable assets, if not its most valuable asset.
With control comes definite responsibilities.
- You also become responsible for your data’s
- VALIDITY
- ACCURACY
- REASONABILITY
- COMPLETENESS
Confidentiality and Privacy
All users and managers of data MUST be constantlyaware of the issues surrounding Confidentiality andPrivacy. Confidential data is very different from data
that is controlled by privacy laws.-Confidential data: given with the understanding that the
information will be treated as confidential- Privacy of data: usually governed by law, either State or
Federal or both.
- GRAMM-LEACH-BLILEY(GLB)- HEALTH INSURANCE PORTABILITY and ACCOUNTABILITY ACT(HIPAA)
DATA for the REGULATOR
• Solvency Data
Accounting
Actuarial
• Ratemaking Data
Rate Filings
Special Calls
The Data Management Environment
Micro-Computers have changed the data management
environment. Literally every user of a micro-computer
has had to become a data manager.
The Insurance Data Management Association(IDMA)
provides education and a forum for knowledge in this field
Insurance Data Management Association(IDMA)
IDMA has partnered with the CAS and is prepared to share
its knowledge of data with CAS members.
The IDMA’s “Data Management for Insurance Professionals” is available today. It is designed as a primer and is intended for both the professional and those yet to become professional within the insurance industry.
For further information on this course contact the IDMA at 1-201-469-3069.
IDMA Data Management for Insurance Professionals
Chapters at a Glance
I. The History of Insurance Data ManagementII. Role of Insurance Data ManagerIII. Key Data Elements of Insurance
IV. Insurance Company’s Use of DataV. The External Insurance Environment
VI. Data QualityVII. Data Repositories
VIII. Future Data Management Issues
Casualty Actuarial SocietyRatemaking SeminarNew Orleans 2005
INT-1
Introductory Data Management 101
Al Hapke
Meadowbrook Insurance Group
Your Role in Data Management
• Demanding User
• Lack of defined needs
• Lack of knowledge about information technology
• Lack of business knowledge in the IT staff
Therefore, you must communicate your goals effectively and clearly.
Objective of Data Management:
To store and organize data in a way that allows the analyst to answer questions about the business.
These questions should help direct and guide the management of the business.
Processing Systems are not adequate to satisfy the analytical needs of the company.
They’re designed to do work, not answer questions.
Steps That Help Communication:
• Formulate many specific questions– Brainstorm yourself
– Talk to your customers/clients/boss
– Read actuarial papers
– Review competitive rate filings
• Write them down
• Design your spreadsheet or model to answer the question
• Determine what you need to populate the spreadsheet
Example of Questions:
What do we expect to pay for claims in this class vs. other classes?
1. Age/experience of driver
2. WC class code
3. Property construction
4. State/territory/location
5. Other characteristics such as credit rating,
new/renewal, etc.
Issues with this Question:
• Volume in each class or characteristic
• How much history?
• Can premium be appropriately matched with losses?
• Can earned exposures be captured?
• Can class definitions be multidimensional?
Other Questions:
• What is our exposure to maximum loss?– Answer can be found in limit/location studies
• How much development can we expect on reported losses?– Considerations:
• Report date
• Historical claim distributions
Other Questions (continued)
• Has our underlying book of business changed?– What types of losses are we seeing?
• This is only meaningful if we have been profiling our mix of claims so that we can see what’s different.
• e.g– Size of loss at consistent points in time– Minor coverage detail– Cause of loss
Other Questions (continued)
• Who, how much, and what is your producer selling?
What are the characteristics of the business being brought in the front door?
Or…. Leaving through the back door?
Issues to Consider in Your Management Information System
• Ease of Access - level of independence
from programmers
• Flexibility - new classes, new
characteristics, new products
• Quality of data