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Within the last few weeks, we reported on Guidewire’s acquisition of EagleEye Analytics and its renaming as Guidewire Predictive Analytics. The vendor said that the acquisition enables Guidewire to support the complete predictive analytics process including data preparation, model building, operational deployment, performance monitoring, and analytic feedback, providing its customer with the ability to apply predictive analytics across the insurance lifecycle to power decision-making. Insurance Innovation Reporter recently caught up with Neil Betteridge, Guidewire’s VP of Strategy, to discuss the acquisition in greater detail.
Insurance Innovation Reporter: What was Guidewire’s strategic thinking behind the acquisition of EagleEye—now Guidewire Predictive Analytics—and how does that relate to the general direction of insurance core system vendors building data capabilities?
Neil Betteridge, VP of Strategy, Guidewire: The EagleEye acquisition is the realization of a strategy we set in motion over four years ago regarding what we understood as our need to expand to meet evolving needs of carriers, bringing to bear data and analytics. Insurers are under more pressure than ever to understand what’s happening in their markets. They are simultaneously under pressure to understand what’s happening and adapt their business to the changing realities of what customers expect, competitors are doing and what’s possible because they have access to new data.
They see the promise that and you and others are writing a lot about: what some of the bleeding edge carriers are doing with analytics techniques, while the majority of carriers have a distance to go. They feel pressure to use analytics as part of their day to day operations. Also they have issues with system silos and have to contend with a long process to plan and implement any change in business, including launching new products, segmenting for new buyers, adjusting the way they underwrite.
Fundamentally, the strategy here is having the ability to empower carriers to be more nimble and precise in their business. The way we see doing that is linking the analysis, the design and execution for products, processes, channels and customer journeys.
IIR: Is it also becoming necessary for core systems vendors, such as Guidewire, to offer more data-related capabilities?
NB: That’s certainly right: insurers are wanting more than core technology, but seamlessly integrated with the core. To the data piece specifically, they want the predictive analytics brought to bear in supporting their underwriters and adjusters as they’re making hundreds of decisions every day.
Data is particularly important to drive better decisions, which drives better outcomes for policyholders and greater profitability for the insurer. You could take the example of what EagleEye Analytics does now as Guidewire Predictive Analytics for Claims, catching claims with high potential to escalate in cost and complexity early, and that helps the policyholder the claimant by getting right intervention sooner so they have a better outcome, abut also will tend to reduce the loss costs for the insurer.
IIR: How would you characterize the broader range of ancillary insurers are increasingly demanding of core system vendors?
NB: The range spans from digital engagement—engaging online and mobile with customers agents and service providers, customer communications, supports around claims handling suppliers to be integrated with the core—through capabilities for managing the richer data, and deriving more value from it.
IIR: Where does EagleEye Analytics fit within Guidewire’s broader offering of data analytics-related capabilities, including Millbrook?
NB: Millbrook gave us a base with two decades of experience in BI and data management. With DataHub—the product based on Millbrook—we’re able to get the rich data out of core systems, and we’ll be able to feed it into predictive analytics. This is sometimes referred to as the “first mile problem”—carriers can’t leverage analytics because they can’t get the quality data quickly from the core systems into the analytics modeling environment.
IIR: And where does that place Guidewire among core vendors with regard to the data capabilities offered?
NB: I would say that it makes our offering uniquely comprehensive, Guidewire is the only vendor partner providing a modern flexible core system, as well as data management to handle getting the data out of core into analytics, in turn powering the decisions that need to be made in the core systems. The signal from analytics feeds back to power better decisions by the core systems users, which then link from analytics back into the core system. There’s a virtuous circle at play. We’re using the analytics to infuse the core systems with smarter decision-making.
IIR: How might you illustrate that?
NB: For example, I may be an underwriter with a model that tells me if something is within my underwriting appetite, but I have to go to multiple systems to retrieve data or enter data into the modeling system to get that answer. You’re duplicating data entry between the core system and the modeling platform. There’s a great deal of friction. Having it all part of a seamless process is much more efficient.
Linking the power of the analytics to the core facilitates self-service for agents and customers, enabling automated decisions powered by the analytics rather than requiring human intervention all the time.
IIR: Let’s close with reference to our opening question. Other vendors are also adding data capabilities, so surely we can see Guidewire’s moves within a larger context. What do your data and analytics advances suggest about insurers’ expanded notions of what is “core” and what they are increasingly looking to core system vendor partners to supply?
NB: I think what we see is the carriers expect their vendor partners to step up and address their C-level imperatives across the business they don’t have the time to knit together disparate systems for core analytics and digital engagement; they want their vendor partners to do that pre-integrated for them. There’s a lot of good models sitting in back rooms in carriers that never get put to use, and we’re about solving that problem.