The Insurance Template powered by Qlik Sense is improving daily operations for Insurance Companies. There are four applications in total in this accelerator. For the sake of this blog, we will be discussing the business value of the Operations Application. This application provides management and staff with the ability to analyze and monitor their daily operations. It focuses on business retention and growth, the impacts of discounts and charges, policies in force, profitability analysis and diagnostics, claims analysis, including loss development and large loss analysis.
Some of the insurance companies we are currently working with didn’t have an analytical tool in place before Qlik Sense. Companies had to rely on reports from their system vendors and data extracts taken directly from the database and then assemble these into Excel reports. As you can already picture, this took a considerable amount of time to assemble and then validate to ensure accuracy. Because of the repetitive nature of these reports, this tied up valuable time from the business analyst role and prevented these individuals from performing other value-added work and resulted in some metrics not being examined on a regular basis.
Let’s look at business and policy retention. These reports were taking some of our clients 2-person days to assemble and validate. As a result of this time-consuming report, the report was not being generated as frequently as they would have liked. The need to understand changes in business retention is critical to remaining competitive with new companies entering the markets on a regular basis.
Another challenge companies were experiencing was understanding their profitability. The financial statements provided profit or loss at a corporate level but not insight into where they were making profit and where they were losing money. This needed to be broken down by agent selling the business, geography, industry and product to analyze further.
Profitability in an insurance company is measured on two levels. What is referred to as Gross reflects how much profit or loss the company has on the insurance products that they have sold to their customers. Understanding this profitability at this level reflects what products they have sold and indicates how they are managing their operations.
The second level is what translates back to the financial statements, and that is the Net profitability. The world of insurance is comprised of insurance companies selling a policy contract directly to a customer but then ceding (essentially selling a portion of this policy or reinsuring) to other companies so that risk is spread. This is accomplished through contracts like subscription, quota share, excess loss, stop loss and catastrophe. So, when there is a loss that triggers one of these contracts, the primary company can recover from the other companies a portion of the loss. This results in a net loss that flows through the financials. It is important to understand and manage both levels of profitability as it reflects the true profitability story.
As part of the implementation process with these specific insurance clients, we worked closely with them to validate all the data and expressions used for the various metrics in the application. This led to strong confidence in the solution to deliver accurate results. This piece alone has resulted in large savings in time (which always equates to dollars) that was previously associated with assembling, validating, producing and distributing reports. Rather than hire additional analysts or alternatively not having timely information, these clients can get answers almost instantly. Their work has now become less stressful and they can focus on other high priority tasks. Goodbye to manual reporting!
That retention report we discussed above? It used to take 2-person days to generate and now is generated with a click. Based on the needs of these companies, most have their data updated and refreshed over night allowing them to come into work in the morning ready to work with fresh data they can trust. Those quarterly reports are now generated any time because there is no additional effort needed by the IT department or Business Analysts. If you think about those reports alone, on a quarterly basis, it is saving companies a minimum of 8-person days or more per year.
Circling back around to profitability now. With additional filters, companies can examine profitability in such detail with over 200 dimensions. This has been key to determining profitable vs. not profitable business. It has been then tied into rate reviews which help determine pricing adjustments and product development. This used to be a tedious and slow process which would put companies at a competitive disadvantage. With the insurance template powered by Qlik Sense they are able to adjust to market changes fast and stay competitive.
BizXcel Inc. is a recognized Qlik Partner, certified with a specialization in the insurance industry.