Assignment:
Nationwide Insurance Used Bl to Enhance Customer Service
Nationwide Mutual Insurance Company, head quaitered in Columbus, Ohio, is one of the largest insurance and financial services companies, with $23 billion in revenues and more than $160 billion in statutory assets. It offers a comprehensive range of products through its family of 100-plus companies with insurance products for auto, motorcycle, boat, life, homeowners, and farms. It also offers financial products and services including annuities, mongages, mutual funds, pensions, and investment management.
Nationwide strives to achieve greater efficiency in all operations by managing its expenses along with its ability to grow its revenue. It recognizes the use of its suategic asset of information combined with analytics to outpace competitors in strategic and operational decision making even in complex and unpredictable environments.
Historically, Nationwide's business units worked inde- pendently and with a lot of autonomy. This led to duplication of efforts, widely dissimilar data processing environments, and exueme data redundancy, resulting in higher expenses. The situation got complicated when Nationwide pursued any merg- ers or acquisitions.
Nationwide, using enterprise data warehouse technology from Teradata, set out to create, from tl1e ground up, a single, authoritative environn1ent for clean, consistent, and complete data that can be effectively used for best-practice analytics to make suategic and tactical business decisions in the areas of customer growth, retention, product profitability, cost containment, and productivity improvements. Nationwide u-ansfonned its siloed business units, which were supponed by stovepiped data environments, into integrated units by using cutting-edge analytics that work with clear, consolidated data from all of its business units. The Teradata data warehouse at Nationwide has grown from 400 gigabytes to more than 100 terabytes and supports 85 percent of Nationwide's business with more than 2,500 users.
Integrated Customer Knowledge than 48 sources into a single customer data mart to deliver a holistic view of customers. This data mart was coupled with Teradata's customer relationship management application to create and manage effective customer marketing campaigns that use behavioral analysis of customer interactions to drive customer management actions (CMAs) for target segments. Nationwide added more sophisticated customer analytics that looked at customer portfolios and the effectiveness of various marketing campaigns.
This data analysis helped Nationwide to initiate proactive customer communications around customer lifetime events like marriage, birth ofchild, or home purchase and had significant impact on improv- ing customer satisfaction. Also, by integrating customer contact history, product ownership, and payment information, Nationwide's behavioral analytics teams further created prioritized models that could identify which specific customer interaction was important for a customer at any given time. This resulted in one percentage point improvement in customer retention rates and significant improvement in customer enthusiasm scores. Nationwide also achieved 3 percent annual growth in incremental sales by using CKS. There are other uses of the customer database.
In one of the initiatives, by integrating customer telephone data from multiple systems into CKS, the relationship managers at Nationwide tty to be proactives in contacting customers in advance of a possible weather catastrophe, such as a hurricane or flood, to provide the primary policyholder information and explain the claims processes. These and other analytic insights now drive Nationwide to provide extremely personal customer service.
Financial Operations
A sinillar performance payoff from integrated information was also noted in financial operations. Nationwide's decentralized management style resulted in a fragmented financial report- ing environment that included more than 14 general ledgers, 20 chans of accounts, 17 separate data repositories, 12 different repo1ting tools, and hundreds of thousands of spreadsheets. There was no common central view of the business, which Nationwide's Customer Knowledge Store (CKS) developed a customer-centric database that integrated customer, product, and externally acquired data from more resulted in labor-intensive slow and inaccurate reporting. About 75 percent of the effort was spent on acquiring, cleaning, and consolidating and validating the data, and very little time was spent on meaningful analysis of the data.
The Financial Performance Management initiative implemented a new operating approach that worked on a single data and technology architecture with a common set of systems standardizing the process of reporting. It enabled Nationwide to operate analytical centers of excellence with world-class planning, capital management, risk assessment, and other decision support capabilities that delivered timely, accurate, and efficient accounting, reporting, and analytical services.
The data from more than 200 operational systems was sent to the enterprise-wide data warehouse and then distributed to various applications and analytics. This resulted in a 50 percent improvement in the monthly closing process with closing intervals reduced from 14 days to 7 days.
Postmerger Data Integration
Nation wide's Goal State Rate Management enabled the company to merge Allied Insurance's automobile policy system into its existing system. Both nation wide and Allied source systems were custombuilt applications that did not share any common values or process data in the same manner. Nationwide's IT department decided to bringall the data from source systems into a centralized data warehouse, organized in an integrated fashion that resulted in standard dimensional reporting and helped Nationwidein performing what-if analyses. The data analysis team could identify previously unknown potential differences in the data environment where premiums rates were calculated differently between Nation wide and Allied sides. Correcting all of these benefited Nationwide's policy holders because they were safe guarded from experiencing wide premium rate swings.
Enhanced Reporting
Nationwide's legacy reporting system, which catered to the needs of property and casualty business units, took weeks to compile and deliver the needed reports to the agents. Nationwide determined that it needed better access to sales and policy information to reach its sales targets. It chose a single data warehouse approach and, after careful assessment of the needs of sales management and individual agents, selected a business intelligence platform that would integrate dynamic enterprise dashboards into its reporting systems, making it easy for the agents and associates to view policy information at a glance.
The new reporting system, dubbed Revenue Connection, also enabled users to analyze the infor- mation with a lot of interactive and drill-down-to-details capa- bilities at various levels that eliminated the need to generate custom ad hoc reports. Revenue Connection virtually elimi- nated requests for manual policy audits, resulting in huge savings in time and money for the business and technology teams. The reports were produced in 4 to 45 seconds, rather than days or weeks, and productivity in some units improved by 20 to 30 percent.
Answer the following questions:
1. Why did Nationwide need an enterprise-wide data warehouse?
2. How did integrated data drive the business value?
3. What forms of analytics are employed at Nationwide?
4. With integrated data available in an enterprise data warehouse, what other applications could Nationwide potentially develop?
Assignment Purpose:
The main purpose of the assignment is to enable students describe the relationship between DW, BI, and DSS.