Predictive Analytics Case Study: Nathan Pohle FSA, CERA, MAAA
When Nathan Pohle started his actuarial career in life insurance with Deloitte Consulting, "big data" had yet to become the omnipresent force we all know today.
While other industries were dabbling in predictive analytics, life insurance was years away from embracing the emerging big data trends, thanks in part to the regulations and government oversight. The industry was, however, accumulating data from millions of customers and third-party sources.
When the life insurance industry started adopting predictive analytics, Nathan saw opportunity in all that data-and the potential benefits and challenges for both consumers and insurers.
That's when he made a choice that would change the trajectory of his career path. He decided to pursue his Master of Business Administration from Northwestern University's Kellogg School of Management to gain additional strategic leadership skills to complement his actuarial training and help him learn new ways to analyze and apply the data.
As a graduate student, Nathan received hands-on experience with data outside the life insurance space while working at the National Football League (NFL). During his time at the NFL, he used data to guide the NFL's digital marketing strategy and monetize online content. He saw how the NFL used real-time tracking of digital and social platforms to ensure that the consumer's experience was continually improved.
While the application was a far cry from life insurance, when Nathan returned to Deloitte, it was second nature for him to use similar methods and approaches to better serve his life insurance clients and the end consumer.
"In some ways, the insurance industry is behind the times, but that's changing a lot," said Nathan. "There are a lot of things that are evolving our industry coming out of Silicon Valley."
Today Nathan is a manager on Deloitte's predictive modeling and analytics team. His focus is helping his clients see the value of using predictive analytics by enhancing existing processes instead of replacing them.
"Predictive analytics can be overwhelming for some insurance companies because it applies to all their processes across the board, so we want to start small to build confidence and then grow from there," said Nathan.
He collaborates with data scientists, underwriters, marketers and other professionals to help clients improve existing underwriting, pricing and risk management processes, as well as increase customer lifetime value and connect with the right customer at the right time. They use data from traditional sources, like policy applications, and emergent sources, including third-party marketing databases and even users' own biometric data from wearable devices.
"It used to take 45 days to do a fully underwritten insurance policy, and now we are trying to make it a 48-hour process or less for healthy individuals," said Nate. "Our clients save time and money by improving the customer experience, and they don't always need to poke customers with a needle or ask for urine sample."
While many insurance companies are using predictive analytics in limited functions, Nathan sees a not-too-distant future where big data and predictive analytics are used throughout the industry, and in more disruptive ways. He says robotics and process automation could be coming.
In the meantime, the industry has a lot of growth opportunities including the growing emphasis on personalized health goals through product offerings like wellness initiatives, which reward customers for living healthy lifestyles. The offerings-like biometric screenings, tobacco cessation programs and healthy lifestyle coaching-are win-win because they provide insurance companies with real-time data, increase customer satisfaction and retention, and improve the overall health of an employer's workforce.
Nathan is quick to point out that actuaries are well equipped to lead the disruptive revolution in the insurance industry.
"Actuaries know the business," said Nathan. "We can be leaders as the industry redesigns itself and how it goes to market. It's an exciting time to be an actuary in life insurance."