P&C Technology
Following the transformation of the insurance industry through technologyData Analytics Panel- Any Questions?
This evening, I will be moderating a panel on data mining and predictive analytics. In preparation for this I have doing a bit of research and wanted to share a few observations that will anchor the agenda for the talk.
We are inundated with data. It is driven the rapid changes in how we interact, communicate and function in a world that increasingly connected (both people and things) with the Internet. The amount of data being collected is growing at an explosive rate. In 2010, data collected was equivalent to cumulative of previous 5000 years worth of data. And it is doubling every 2 years.
Consider the following:
- Facebook has at least 30Petabytes of Data, 30B pieces of content shared/month
- YouTube users upload 35 hours of video every minute
- Twitter delivered 25B tweets in 2010
- Zynga generates15 Terabytes of data every day
None of these companies mentioned above existed 7 years ago.
So we have companies that have far more data than ever before. How does this create a new paradigm? What are the ways in which commerce will be transformed? We’ve had companies exploiting large data sets with tools and techniques that have been around for decades- so what’s different now? Are we just dealing with more noise?
These are the topics that I hope we will gain some insight on in tomorrow’s discussion.
To get the discussion started tomorrow, I am highlighting three changes that I see.
#1) Data Availability-Exponential growth in data is available to everyone- companies and individuals alike. Whereas massive data sets were once the domain of well capitalized companies, now even startups and individuals can use them to find value.
#2) Tools-Data storage and processing infrastructure and tools are becoming increasingly powerful at fractions of the cost. Open source software, collaboration platforms, cloud infrastructure provide mechanisms for not only collecting and storing the data, but also processing it at scale.
#3) Investment-Markets are rewarding companies on the promise that they will find value in the massive data sets that they create. Have you checked out the valuation of Facebook, Twitter, or Zynga lately? To be sure, these companies are achieving astonishing growth rates, but investors are placing their bets on new ways of monetizing the data streams that these and other companies collect and control.
I would be very interested in getting my readers’ ideas on what to ask our panelists. I will try and incorporate suggestions into the flow of the discussion. For those of you who will not be able to make the session I will be blogging on the key takeaways and insights in the days ahead.
Looking forward to seeing many of you this evening.
Vertafore adds another product to its stable of agency offerings
Vertafore announced this week that it acquired Stone River FSC. Details of the transaction here. One interesting fact that I pulled out of the release is FSC’s dominance in California, Arizona and Nevada. Wondering if this is a capabilities play or if in fact that Vertafore was just hunting for new customers.
I noted Euan Menzies (CEO) comment that he was “particularly pleased to address the need to increase agency sales productivity with the industry’s first sales management system, FSC Pipeline, which is uniquely designed to enable producers to manage their prospects and close business faster.”
30 year old company. Hope the solutions are a bit more current.
Banks driving consolidation in brokerage industry?
Interesting article in wsj on Wells Fargo’s plans to significantly grow its insurance brokerage business.
Link here
More Consolidation in TPA Industry
As reported by Bloomberg, Sedgwick purchased the US assets of Xchanging for $22.7M.
According to the Bloomberg article:
“The Operations include the workers’ compensation claims, managed care, consumer claims, professional liability claims and structured settlements operations of CISGI. Virtually all of the contracts, assets, employees, current liabilities and future service obligations have been acquired by Sedgwick, although certain liabilities and non-operational assets have been retained by CISGI. CISGI and Sedgwick have also entered into a transition services agreement to facilitate a smooth handover of the Operations.
In the year ended 31 December 2010, the Operations being disposed of recorded revenue of $113.4 million*, an operating loss before interest and tax after IFRS 3 amortisation of acquired intangibles of $(8.2) million* and an operating loss before interest and tax of $(1.4) million* excluding those charges. The gross assets being transferred have a carrying value at 31 December 2010 of $14.9 million*.”
WLDI Shows Treatment Type is Best Predictor of Disability Duration
Interesting release from Work Loss Data Institute on a study they did for a major carrier on predictors of disability duration. Article here.
More VC funding of Analytics Firms- Mu Sigma Raises $25M
Interesting to see so many analytics firms raising gobs of cash these days. I sincerely hope that these firms are building products and not simply providing professional services to owners of large datasets.
Latest big raise is from Mu Sigma, a Chicago-based firm that raised $25M from Sequoia. Details here.
Electronics, Jewelry, and Apparel Top Contents Claims in 2010
According to Enservio, these three categories comprised the greatest percentage of dollar value amongst contents claims in 2010.
Link to article here.
Alpine Data Labs Secures $7.5M in funding
VC now backing analytics firms. Am curious to hear if players such as Alpine have specific algorithms that are directed to a particular problem, or if they plan to become large professional services plays. Will continue to watch this player.
Link to article is here.
Allstate Buys Essurance and Answer Financial
Allstate catching up on online distribution- expects to pay ~1B for Answer and Esurance. Did not know it, but Esurance gets 50% of premium from California, Florida, New Jersey and New York.
Link to article in WSJ here:
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