Allstate's Data-Driven Business Transformation Initiative

Like the majority of legacy firms today, Allstate Insurance, founded in 1931 as the insurance arm of Sears Roebucks, must find new ways to compete in an increasingly competitive and digital marketplace. Luckily, Allstate was spun out of Sears in 1993, and unlike Sears, has continued to grow and prosper. While Allstate is the 2^nd largest provider of property and casualty insurance in the U.S. according to A.M. Best, Sears has become the poster child for how data-driven tech giants, in this case Amazon, can thoroughly disintermediate and destroy a once thriving and iconic company.

In stark contrast to Sears, Allstate has demonstrated a commitment to leveraging data as an enterprise asset that can be used to transform business processes and services. Under the leadership of Allstate’s Chief Data and Analytics Officer Eric Huls, the firm has launched the ambitious “D3” organization. Within Allstate, D3 refers to the 3 cornerstones of the firm’s data-driven analytics journey – Data, Discovery, and Decision Science. The 300 person D3 organization is organized around core horizontal activities – Data Strategy, Technology, and Analytics Center of Excellence – to support core vertical business activities – product, claims, marketing, agencies, amongst others.

“We’ve taken an aggressive approach to integrating data into business, which ultimately gives us an edge when it comes to innovative pricing solutions and knowing the why or what our customers need even before they know it,” said Huls. “We continue to grow our data team and almost every day we’re seeing a new or different way the information we already have can be beneficial to our customers.”

The Analytics Center of Excellence function is led by Rick Bischoff, Director of Data Science, whose mission it is to deploy analytics to drive business transformation. Bischoff has undertaken a multi-front effort to help enable transformational analytical improvements. Through the establishment of an Analytics Center of Excellence and through university partnerships, Bischoff is working to educate the business community within Allstate on the power of analytics techniques and applications of Artificial Intelligence (AI) to critical business problems. One area of notable business innovation is in the application of video footage to enhance analytics prediction. Working in partnership with Northwestern University, Allstate is also employing AI techniques to better understand the history of policy holder interaction. By analyzing photographic images and mountains of text data, Allstate is able to detect additional signals that can predict policy renewal and result in a better customer experience.

Data and analytics are integrated into almost every operation within Allstate. From claims handling, to billing inquiries, agent interactions, and the technical help-desk that Allstate employees call when their desktop computer doesn’t work, Allstate analyzes mounds of free-form text and voice data to derive insights that inform business decisions. Taking this a step further, Allstate is continuing to develop machine learning and natural language processing capabilities which use this data to deliver an enhanced customer experience.

Allstate’s QuickFoto Claim, or QFC, initiative, allows customers to provide collision photographs without relying on claims adjusters to be physically at their location. To quote Allstate, “The QuickFoto Claim feature of the Allstate^SM Mobile App helps you get paid quicker so you can get back to normal faster”. This represents transformational business change, notes Bischoff. No travel is required and advanced analytics can eventually be applied to photographic images to help adjusters resolve insurance claims.

Allstate is also deploying advanced analytics to drive product and pricing decisions with industry-leading sophistication. The Analytics Center of Excellence operates as a shared service which offers best practices and helps business constituents accelerate the use of analytics within their lines of business. Through the deployment of “analytics sandboxes”, Allstate can explore the art of the possible, while sourcing new data and expanding data collection capabilities.

Allstate’s D3 organization relies on a robust data ecosystem. One of the solutions that the Decision Sciences team has evaluated as part of their analytics ecosystem is Domino Data Lab’s data science platform for empowering model-driven organizations. Domino has built a model building facility for data scientists that presents an easy way for data scientists to build and govern their own data environment. The Domino platform delivers productivity gains by enabling data scientists to run multiple models in parallel. The model management platform enables Allstate’s newly recruited data scientists to hit the ground running, resulting in improved efficiency.

In his role as head of data science for Allstate, Bischoff sees the D3 organization helping Allstate quantify the business benefits and prioritize data activities that deliver the greatest business value to the firm. Bischoff refers to this as “transformational analytical improvement”. His goal is to demonstrate the power that analytics can deliver to transform business initiatives across Allstate. In the face of competitive threats of encroachment from tech giants such as Amazon, and FinTech solutions such as Lemonade, Allstate is committed to building out rich data and analytics capabilities within a nimble, highly agile environment.

Allstate is proving that an 87-year-old insurance company can adapt and compete on data and analytics. Where its one-time parent Sears missed the window of opportunity, Allstate recognizes that complacency is the enemy of innovation and customer service. To quote Allstate,” The Good Hands Are Doing More Than Ever Before”.

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