DATA IS KING: MARKETING DATA IN ACTUARIAL MODELS? 26 January 2017: 09.50 - 10.50am 1
IS DATA KING? “In God we trust. All others “The world’s most “The world is now awash in data and we can must bring data.” valuable resource is no see consumers in a lot clearer ways.” W. Edwards Deming - Professor longer oil, but data” Max Levchin, PayPal The Economist “You can have data without information, but you cannot have “It is a capital mistake to information without data.” – Daniel Keys Moran, Author theorize before one has data.” Sherlock Holmes “The goal is to turn data into information, “If we have data, let’s look at data. If all we have are and information into insight.” opinions, let’s go with mine.” Carly Fiorina, Hewlett-Packard Jim Barksdale, former Netscape CEO Commercial In Confidence 2
MANY DIFFERENT TYPES MEDICAL RISK FACTORS 1 ST PARTY DATA WEB BEHAVIOURS MODELLED DATA MODELLED DATA LIFESTYLE DATA CUSTOMER DATA CLAIM DATA TRANSACTIONAL DATA BIG DATA BIG DATA CENSUS DATA RESEARCH DATA BEHAVIOURAL DATA SURVEY DATA Commercial In Confidence 3
WHAT I WILL COVER TODAY 1. CACI Today 2. CACI Data & Applications in Risk 3. Beware GDPR and Regulation - Profiling 4. Where to go for more information… Commercial In Confidence 4
CACI TODAY 5
OUR BUSINESS TODAY W E W O R K I N G W O R K A C R O S S U N D E R S T A N D W I T H L E A D I N G A L L M A J O R B R A N D S C O N S U M E R S S E C T O R S T E C H N O L O G Y T O M O V E P R O C E S S £ 1 1 0 m 9 0 0 A N D M O V E D A T A E M P L O Y E E S A R O U N D Q U I C K L Y O U R F O C U S I S W E D O A M A Z I N G T H O U S A N D S O F T O D R I V E T H I N G S W I T H D A T A S E T S A N D N E T G R O W T H D A T A V A R I A B L E S F O R C L I E N T S Commercial In Confidence 6
WE WORK ACROSS FINANCIAL SERVICES AND OTHER SECTORS INCREASED COMPETITION EVOLVING CONSUMER INSIGHT INCREASED REGULATION DIGITAL INFLUENCE LOOK & FEEL DIFFERENT CONSUMER CONFIDENCE GDPR UNCERTAINTY 7
CACI DATA 8
CACI DATA PRODUCT FAMILIES Commercial In Confidence 9
IN SUMMARY – FOUR DATA EXAMPLES Differing styles of data have many useful applications in pricing and risk analysis… Geo-demographic Gross household income Individual-level Over 500 demographic, classification that segments estimates and disposable segmentation based upon lifestyle & behavioural the population at postcode income held at postcode demographic & financial attributes on every UK level. level. traits. adult. 18 45 Lifestage Groups Sub-segments 6 62 12 134 Disposable Equivalised Types Categories Segments Micro-segments 833 26 761 510 Traits Income Bands Traits Variables DEMOGRAPHICS AFFLUENCE HOME & MOTOR FINANCIAL RETAIL EXPENDITURE TECHNOLOGY ATTITUDES Commercial In Confidence 10
CACI DATA PRODUCTS: ACORN Commercial In Confidence 11
ACORN IS THE INDUSTRY STANDARD CONSUMER SEGMENTATION A GEO- DEMOGRAPHIC CLASSIFICATION THAT SEGMENTS THE UK’S POPULATION ACCORDING TO THEIR LIFESTYLE, LIFE STAGE AND AFFLUENCE The UK’s leading demographic classification Classifies every UK postcode All you need is the customer postcode Acorn contains 6 categories, 18 groups and 62 types Coded onto leading market research & government surveys Easily accessible data and easy to apply 12
ACORN DISCRIMINATES BY AGE AND AFFLUENCE A Lavish Lifestyles Executive Wealth B C Mature Money D City Sophisticates Career Climbers E F Countryside Communities G Successful Suburbs H Steady Neighbourhoods I Comfortable Seniors J Starting Out Student Life K Modest Means L Striving Families M Poorer Pensioners N Young Hardship O Struggling Estates P Difficult Circumstances Q SIZE REPRESENTS UK POPULATION 13
2.1 M 3 % 2 D City Sophisticates UK Individuals of UK Younger individuals enjoying the city lifestyle with lots of opportunities to socialise and spend. Demographics Brand Affinity Shopping Age Household Income £55 K 25-29 House Tenure Children At Home 0 Privately Eating Out Rented Social Grade Social Media Usage A High Group Description These affluent younger people generally own flats in major towns and cities. Most of these are purpose built apartments although there is also a significant number that have been converted from older terraced town houses. These flats are over twice the cost of the average UK house and more expensive than the average property in these more expensive urban locations. The majority are buying their flats with perhaps a third renting from a private landlord. 14
ACORN IS ABOUT THE POSTCODE… NOT THE PERSON Acorn is postcode driven Beware the naming conventions – it describes most not all Successfully used by marketing, pricing and risk departments Many different combinations of the datasets when used in risk and pricing analysis Healthstyle – CACI’s Acorn and Wellbeing Acorn Tools Lifestyle – Ocean Lifestyle Variables Source: Matthew Edwards (Towers Watson) & Kandyce Tester 15
CACI DATA PRODUCTS: OCEAN Commercial In Confidence 16
BUILDING A CONSISTENT VIEW ACROSS MULTIPLE DATA SOURCES Hundreds of millions of records from research surveys, open data, government data and many other sources are collated together to create Ocean NAMES & ATTRIBUTE RESEARCH POSTCODE UK CONTROL ADDRESSES ENRICHMENT DATA DEMOGRAPHICS FIGURES Edited Electoral Roll National Register of Social Online behaviours survey Registers of Scotland ONS Rolling Registers Housing GfK FRS DWP Benefits Data English Housing Survey Presence Of Children Private Rental Data TGI Land Registry National Readership Lifestyle Surveys Land Registry Understanding Society ONS - Census Survey Presence Of Children GfK FRS Energy Performance Public domain sources Certificate Data Commercial In Confidence 17
PREDICTIVE MODELLING USED TO CREATE EACH INDIVIDUAL VARIABLE Statistical models are created and validated for over 510 different variables across various categories Model Build Models are built using the Model Validation 510 400+ combined data sources to provide propensity scores Models are validated Propensity Propensity 93% for each variable across 88% against independently Models Models every individual of the UK drawn samples and Age Age aggregated views of the Accuracy Accuracy UK DEMOGRAPHICS AFFLUENCE HOME & MOTOR FINANCIAL RETAIL EXPENDITURE TECHNOLOGY ATTITUDES 18
OCEAN FORMS A COMPLETE PICTURE OF THE UK POPULATION CACI pulls together hundreds of millions of records from over 20 different independent partners to create a unique picture of UK consumers – providing brands access to: Comprehensive UK consumer file containing 50m adults Individual level insight and access to UK consumers Over 500 consumer characteristics per individual Constantly updated, calibrated and refined 19
EXAMPLES OF OCEAN VARIABLES Age House Value Presence of Spouse Has Savings, Value £25,000+ Currently Smokes Household Weekly Supermarket Presence Size Spend of Children Eat out 4+ a week Exercise Regular Drinker High BMI 20
CACI DATA PRODUCTS: FRESCO Commercial In Confidence 21
FRESCO IS A POWERFUL SEGMENTATION TOOL Classifies individuals within a household based on their financial behaviour F O C U S E S O N L I F E - S T A G E & A F F L U E N C E , F I N A N C I A L P R O D U C T S & A T T I T U D E S 45 134 GFK & 50M 12 CACI SUB MICRO SEGMENTS ADULTS SEGMENTS SEGMENTS 22
FRESCO COMBINES CACI & GFK DATA Fresco has been built by using the richness of GFK’s Financial Research Survey data combined with CACI’s extensive data sets covering demographics and lifestyles 50M 510 UP-TO- DATE UK individuals with Geo-demographic and Geo-demographic and Fresco on the lifestyle variables are used lifestyle variables are used CACI database to shape Fresco segments to shape Fresco segments FRS 60,00 400,000 0 The largest annual UK UK consumers are Records of financial financial research survey surveyed by FRS annually product holdings are used to build Fresco supplied by FRS 23
DEPTH AND VARIATION OF FRESCO VARIABLES u Income Financial Channel Usage Product Holdings and Preference Investments & Mortgage Financial Pensions Values Attitudes Likelihood to Arrange/Manage FS Credit Switch Products Behaviour Commercial In Confidence 24
FRESCO FOCUSES ON AGE & AFFLUENCE 1 Still At Home 2 Starting Out 3 Rising Metropolitans 4 Poorer Parents 5 Working Singles & Couples 6 Home Owning Families 7 High Income Professionals 8 Older Working Families 9 Mid-Life Social Renters 10 Asset Rich Greys 11 Road To Retirement 12 Low Income Elderly SIZE REPRESENTS UK POPULATION Commercial In Confidence 25
RISING METROPOLITANS: AFFLUENT, YOUNG & URBAN Demographics Average Age Gender 43% 57% 32 House Tenure Children At Home 0 Private Renting Financial Profile Household Income Financial Products Held £42 K 7 Savings & Investments Has Credit Card £11 K 52% Commercial In Confidence 26
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