Cognitive computing in Insurance

© 2015 International Business Machines Corporation
Cognitive Computing
- in insurance
Forsikringsselskabernes PlanlægningsUdvalg
- January 26, 2014
Anders Quitzau
Innovation Exec & Watson Advocate

Agenda
•  Cognitive Computing and Watson overview
•  Watson for Insurance and Financial Services
•  Q&A - discussion

Tabulating
Systems Era
Programmable
Systems Era
Cognitive
Systems Era
1900 1950 2011
Cognitive Computing is a new era of computing

Cognitive computing promises a new partnership between human
and computers
Scale
expertise by elevating the
consistency and objectivity of
decision making across an
organization.
Enhance
the cognitive process of
professionals to strengthen
decision making in the
moment
Accelerate
development of expertise in
others by capturing the
expertise of top performers

Cognitive systems expand the problems we can address
Programmatic Systems Cognitive Systems
•  Leverage traditional data sources
•  Follow pre-defined rules (programs)
•  Provide the same output to all users
•  Are taught, not programmed
•  Learn and improve based on experience
•  Interpret sensory and non-traditional data
•  Relate to each of us as individuals
•  Allow us to expand and scale our own
thinking

Cognitive systems learns and evaluates like we do
Study
Apprentice
Practice
Master
Ingest
Learn
Test
Experience

IBM’s answer to the new era, Watson, is a cognitive learning system
that enhances our abilities to perceive, reason, and relate
Perceiving:
Watson understands the world as we do: it
interprets sensory input beyond traditional data
Reasoning:
Watson thinks through complex problems: it
deepens our analysis and inspires creativity
Relating:
Watson understands how we communicate, and
personalizes its interactions with each of us
Learning:
Watson learns from every interaction, scaling our
ability build experience

Why is it so hard for computers to understand us?
Person Organization
L. Gerstner IBM
J. Welch GE
W. Gates Microsoft
“If leadership is an art
then surely Jack has
proved himself a master
painter during his tenure
at this company”
Welch ran
this?
§  Noses that run and feet that smell?
§  How can a house burn up as it burns down?
§  How can I fill in a form that I am asked to fill-out?
§  Where is Paris Hilton?
NLP
Machine Learning

Answer
Scoring
Models
Responses with
Confidence
Inquiry
Evidence
Sources
Models
Models
Models
Models
ModelsPrimary
Search
Candidate
Answer
Generation
Hypothesis
Generation
Hypothesis and Evidence
Scoring
Final Confidence
Merging & Ranking
Synthesis
Answer
Sources
Inquiry/Topic
Analysis
Evidence
Retrieval
Deep
Evidence
Scoring
Learned Models
help combine and
weigh the Evidence
Hypothesis
Generation
Hypothesis and Evidence
Scoring
Inquiry
Decomposition
How Watson Works
1000’s of
Pieces of Evidence
Multiple
Interpretations
of a question
100,000’s Scores from
many Deep Analysis
Algorithms
100’s
sources
100’s Possible
Answers
Balance
& Combine

R&D Demonstration Validation
Research
Project
2006 – 2010
Jeopardy!
Grand Challenge
2011
Internal
Startup Division
2011 – 2013
IBM Watson
Group
2014 – present
Commercialization
•  $1B Investment
•  $100M for Ecosystem
•  NYC Headquarters
Watson has graduated from a startup to a full-fledged business

IBM Watson
Advisors
IBM Watson
Solutions
IBM Watson
Foundations
IBM Watson
Cognitive
Fabric Provides the big data and
analytics capabilities that
fuel Watson
Products based on
Watson’s core
attributes
and capabilities
APIs, tools,
methodologies, SDKs,
and infrastructure that
fuels Watson
Customized solutions designed
to meet some of industries most
demanding needs leveraging
cognitive capabilities
IBM Watson
Ecosystems
The Watson Developer
Cloud, Watson Content
Store and
Watson Talent Hub driving
innovation from partners
The Watson Family

Customer expectations are
shaped by experiences
outside of Insurance
Pressure of competition is
putting a lot of focus on
customer experience
Advisors and Managers are
challenged to keep up with
data explosion
Customers are informed
better than ever with
“Google knowledge”
Customers expect
transparent, evidence-
based recommendation
Quality of advice varies
Pace of innovation is
accelerating
Regulations increasing in
volume and complexity
Additional scrutiny
increasing time spent on
compliance, and cost
Insurance industry trends – Imagine if…
Client Engagement Analysis / Discovery Decision Policy / Compliance

Watson
enables
advisors
to

deliver
cost-‐eﬀec2ve

personalized
advice
Watson
supports
Analysts
and

advisors
by
pre-‐reading
1000s

of
pages
of
relevant
info

Watson
uses
structured
and

unstructured
informa2on
to

provide
proac2ve,
transparent,

evidence-‐based
advice

Watson
helps
evaluate

decisions
against
relevant

policies
&
guidelines

Financial Services solutions map into “patterns”
Engagement
Discovery
Policy
Decision
Explore / analyze
Pattern Description Client success stories
Leading customer service firm, USAA, introduced
Watson to answer questions from members
Digital engagement with clients to answer
questions, execute actions, and provide
recommendations
Leading drug discovery firm, Baylor, publishes
breakthrough in protein targeting
Explore questions not yet answered
Memorial Sloan Kettering Cancer Center
partnered with IBM to build an Oncology solution
Help evaluate possible options to come up
with the right decision
IBM partnered with Wellpoint to accelerate pre-
approval decisions
Help understand if a particular action is
compliant with relevant policies
700+ clients using the product across industriesSearch, consolidate and analyze enterprise
data

Insurance and Financial Services solutions map into “patterns”
Engagement
Discovery
Policy
Decision
Explore / analyze
Pattern Example solutions
Watson Insurance Advisor
Watson Discovery Advisor
for Pharma
Watson Oncology Advisor
Watson Policy Advisor for
insurance pre-approvals
Watson Explorer/Watson Analytics / Watson Content analytics (x-industry)
Watson for Wealth
Management
Watson Discovery
Advisor for Gov’t
Watson Discovery Advisor
for financial services
(emerging)
Watson for Regulatory
Compliance (emerging)
Watson Engagement
Advisor (x-industry)
Watson Policy Advisor for Clinical
Trial Matching
Watson for Retail
Banking
F & I services solutions
1 3
4
5
2

Self-service User Experience Journey
Here is what you are
looking for
Here it is.
Shall I complete the task
for you?
Have you thought
about this?
How did it go?
Can I assist with these
next steps?Knowledge Expert
Empowered Assistant
Personal Advisor
Ask a question Get answers Ask a question Get answers
Get action
Ask a question Get answers
Get action
Get suggestions
Get follow-up

Demo

USAA case study
IBM’s Watson Engagement Advisor will answer
military separation-related questions on topics such
as job searching, home purchasing, military benefits
and more.
Members "Ask Watson"
as they prepare to
transition to civilian life

Policy Pattern

Example use case: Medical procedure approval by Healthcare Payer
Decision Input Case ‘Policy’ Policy Advice Expected
Can I approve the
procedure being
requested?
Clinical data
(structured and
unstructured) from a
provider’s office
requesting a
procedure
Payer medical policies
and guidelines
•  Approve, medically necessary
•  Reject, not compliant with policies
•  Need MD review, ambiguity in
request / policy (specify what
information is needed)

Multi page
unstructured text
case input
Structured data as
part of case input

1. Identify the applicable policies
2. Evaluate the case against appropriate criteria
from the policies
Identify relevant
evidence

Generate summary of
case evaluation

Combination of multiple patterns

Watson Wealth Management for DBS
Banking clients at DBS will soon get investing advice
from Watson, the same IBM technology that triumphed
over human “Jeopardy!” contestants.
The Singapore based bank plans to begin using the tool,
which can answer questions in conversational language and
learn from responses, in the second half of 2014 to aid
financial planners in guiding its wealth
management’s units affluent customers. Watson will
analyze large volumes of financial data to help DBS,
Southeast Asia’s largest lender, offer more customized
service.
Watson will throw up its suggestions
after “ingesting” thousand of
research reports, product
information and customer profiles,
more than what a wealth
management expert can handle
handle, DBS said.
DBS will also leverage a comprehensive portfolio of IBM solutions
which include business consulting, advanced analytics,
hardware and IBM Research assets to further augment the
power of Watson . By bringing together all of these capabilities, DBS
will be uniquely positioned as the first bank in Asia to execute a project
of this kind.33

Watson for Wealth Management helps wealth advisor better serve their clients (advisor dashboard)
Key upcoming
activities
Client list
Relevant alerts
affecting clients
Relevant news
Ask Watson
questions in
natural language

Watson for Wealth Management helps wealth advisor better serve their clients (client-specific dashboard)
Customer-
specific view
Relevant alerts
Client-specific
product
recommendations
Ask Watson
questions in
natural language

Create personalized recommendation using broad combination of structured and
unstructured data (recommendation rationale screen)
Relevant info
about the asset Match to client
preferences
Positive outlook
from multiple
analysts
Overall high
confidence in
recommendation

This will be Watson
Sees
Hears
Experiences
Understands natural
language
Generates and
evaluates hypotheses
Adapts and learns
Reasons
Explores
Visualizes

If we really want to augment and scale human recognition, we need to re-invent how
we compute: IBM TrueNorth ‘brain-chip’ may be the answer….

http://ibmwatson.com
eller kontakt mig på
andersq@dk.ibm.com
2880 4705

Cognitive computing in Insurance

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