Data Mastery Unlocks Value in Insurance Data

Insurers must now aggressively begin to master current “small data” challenges before Big Data overtakes projects and initiatives within the company.

(Image credit: Dollar Photo Club.)

Much like in social media, collecting numbers, such as followers, friends or quantities of data, doesn’t make any difference at all for insurers if those numbers aren’t creating tangible results or engagement. Much has been written about data as the “lifeblood” of the industry, but many insurers are underutilizing this valuable asset, akin to stuffing money in a mattress instead of depositing it into a bank. Analyzing customer, product, channel, competitive pricing, risk, environment, weather or any other data relevant for insurance, can create invaluable insight to help insurers differentiate themselves. Achieving data mastery allows insurers to realize breakout results in an increasingly competitive industry.

Improving business intelligence (BI) and analytics has been one of the top three business priorities for insurers during much of the last decade, growing steadily in terms of percentage of budget allocated annually. In fact, during the financial crisis of 2007-2009, insurers naturally focused on cutting costs across the enterprise, and one of the key ways insurers identified potential areas for cost cutting was through the use of analytics and operational reporting. However, as the economy improved, competition, growth projects and customer-centric initiatives broadened the need for analytics and BI to spotlight other areas of the business ripe for investment and improvement. Today, there are more BI and analytics initiatives underway within insurance organizations than there are core system modernization efforts in progress.

Pie Charts are not Enough

Unfortunately, the pretty pictures and pie charts often produced by BI and analytics solutions are sexier than the tangible results a full on data mastery initiative can produce. So, the focus for most of these projects was on BI and analytic tools instead of on the broader data mastery picture and how all these tools should work together. As this trend bears out, it is easy to get distracted by shiny objects and fail to see the big picture behind how data mastery drives a coordinated, consistent and collaborative data strategy and how it adds value to the organization that can garner greater business value, competitive position and organizational success.

Today, insurers are realizing that, on their own merits, pie charts have no ability to positively impact the business or the bottom line. By incorporating an enterprise data strategy, governance, senior management support, executive ownership, and data quality fundamentals into data mastery initiatives, it is possible for insurers to start legitimately utilizing the wealth of data at their disposal. Many insurers want to address the new Big Data challenges, but are struggling. This is why insurers must now aggressively begin to master current “small data” challenges before Big Data overtakes projects and initiatives within the company.

Data Mastery to the Rescue

This transition in focus and understanding has given rise and importance to the role of data mastery. Data mastery implies an ability to leverage both internal and external data (of all types) to gain business insight which will increase revenue, decrease expenses, improve customer relationships and improve ease of doing business. Data mastery involves more than just technically implementing the tools required to produce the insight, starting from Extract-Transform-Load (ETL) to data warehouses/data marts, reporting and analytics, data mining, BI presentation layer, GIS analysis, and of course, Big Data. It is the utilization of all of these technology elements, along with people and processes, working together to create an overall benefit to the company by making trusted data available to business users at the exact time of need.

While an integrated solution that provides all of these aspects of data mastery is very helpful, a mature insurance data model, predefined key performance indicators (KPIs), analytics, dashboards, and scorecards are also necessary. Additionally, insurance experience is also critical to success as results must be interpreted in context, not only of the company itself, but of the industry at large. Further, insurers need to include data governance, strategy, roadmap, skills, organizational structure, and data quality processes as well.

The Need to Know

The lack of insight available in today’s current state, combined with the complexity and intricacy involved in achieving an acceptable level of data mastery has left many insurers stumbling and confused as to where to begin. This has resulted in data chaos, and now insurers must try to visualize:

  • What does the end state look like?
  • What is the strategy to get there?
  • What milestones can be established to ensure this is the right path?

If this sounds all too familiar, perhaps it is time to explore how to develop a true data mastery strategy that will help extract the maximum value from existing and available in-house data.

 

 

 

Ben Moreland // Ben Moreland is the senior business architect for Innovation Group. He can be reached for further information or comment via email at [email protected].

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