According to Bain and Companys Global Digital Insurance Benchmarking Report 2015, while most insurers recognize the potential to deploy Big Data and analytics to understand customer preferences and to improve cross-selling, most companies are not there yet as less than half of P&C & life carriers track any customer buying signals using digital technologies.
Cultural issues and insurer uncertainty about how to leverage data as an asset are at the heart of the problem. Data is an asset thats equally as important as any other technology asset within an insurance organization. Data can drive the business and can help insurers achieve their business objectives. But to do so, their whole mindset regarding data needs to change. Instead of relying on gut instinct, in order to make the best decisions insurers need to become data-driven organizations.
From a technology perspective, the biggest challenge is integrating the data and making it available in a timely manner so insurers can leverage it and make informed decisions. Its also important that the data is of high quality. Currently, the rate of satisfaction with the quality of the data available from existing data warehouses is very low. Most companies also plan to invest in making data consistent across systems, according to the Bain report. This raises a whole technology-related trust issue, which is very important and why these gaps persist.
Legacy tools and technologies also present a challenge because they are not as efficient as newer data management-related technologies and arent able to deal with the Big Data environment. Moving away from legacy systems, many insurers are investing in newer capabilities, such as Master Data Management (MDM), that enable creating a single view of the customer.
Adopt a holistic approach with a comprehensive data framework
If your organization is trying to address the data issues in bits and pieces looking at just technology, or just data your efforts may not be successful. Instead, you could develop a whole framework, a methodology that helps you understand where you are today, gauge your alignment with business goals and objectives, and understand whether or not your current initiatives provide results youre looking for.
- You can begin by developing a governance strategy around your assets and bringing in business and IT stakeholders.
- Adopting a holistic, framework-based approach does not mean embarking on big bang or long-term projects we do not recommend that. The requirements change so rapidly that at the end of an 18-month implementation the solution is no longer relevant. Instead, you could map your strategies onto a roadmap so that you can clearly see each step and assess your progress. You should aim to develop smaller projects and manageable steps that align with high-priority business outcomes.
- At the end of the day, you need to prioritize your business objectives, and identify the business processes and functions that will help you achieve these objectives. Next steps would include figuring out the tools and technologies you need, the data management and processes, and also the type of resources and people. Its a complete framework, but it needs to begin with setting your priorities.
Data technologies are really a tool for business that are IT-enabled. Using digital technologies and analytics gives you a way to see value from your data. It is time to evaluate your data strategy to maximize the potential of data and move towards being a customer-focused organization. Our next post in this series will analyze the roles such as Chief Data Officers and Data Scientists in taking an IT-driven organization to a data-driven organization. Stay tuned.