Big Data's Big Guns: American Family Insurance

American Family Insurance has several initiatives around big data, including programs for more intensive testing and efforts to leverage unstructured data from claims notes.

In September, American Family Insurance licensed APT’s Test & Learn software to enhance customer engagement and increase support for agents. “This is a statistical tool that enables us to create and analyze statistical tests,” says Justin Cruz, strategic data and analytics vice president. Historically, most predictive analytics was focused on pricing, however big data and statistical testing now are creating opportunities for companies to harness marginal value out of their operations, Cruz says, ensuring that the insurer is making the best decisions possible in a variety of areas.

For example, call-routing techniques affect wait times and, ultimately claims satisfaction. The insurer also tracks how claims are handled, and by whom, and whether agents are involved in resolution. Using APT, the insurer can isolate variables and accurately determine the success of one design vs. another for various products, geographies or demographics, Cruz says.

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“We’ve always been focused on providing value to the customer, but we are zeroing in on doing that in a more rigorous fashion, using data, using technology to prove whether we’re impacting the customer in a positive way,” Cruz says.

Unstructured data, such as that collected in call center transcripts, also can be studied to better understand what approaches are best for different situations, he says. “Hadoop and other tools enable natural-language processing and sentiment analysis,” Cruz says. “We can look for key words or patterns in those words, do counts and build models off textual indicators that enable us to identify three things: when there could be fraud involved, where there might be severity issues, or how we can get ahead of that and plan for it,” Cruz says. “We couldn’t have done this before, and you never could have analyzed that unstructured data. It just was almost virtually impossible in a relational database to do that.”

Customer communication, web design and direct mail are other areas the insurer is, or soon will be, using APT, Cruz says. “You can look at sub-factors within two or three types of direct mailers and ask questions like ‘Do we see greater lift in these geographies vs. those? Or, from younger vs. older customers, or customers that came from these insurance companies vs. other insurance companies.’ It enables you to assess these factors one by one in isolation.”


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