Is too much data a bad thing? For many insurers, while they understand the importance of amassing and analyzing data, it seems they struggle to convert it into actionable knowledge. This is the message from Aberdeen Group, which recently released a study examining how insurers use data to improve the timeliness and accuracy of business decisions.
Aberdeen polled 76 insurance executives across all lines of business for its survey, "The Intelligent Insurer: Enhanced Business Performance with Pervasive Analytics," to learn how they're developing customer relationships and enhancing business performance.
The survey found that insurers are awash in a sea of data—be it claims, policy applications, etc., and it's often just individual silos within the company that actually transform that data into actionable information, and only rarely is it leveraged by the enterprise as a whole. This is a significant problem for carriers, with 46% of the survey respondents noting that the need to improve the timeliness and accuracy of business decisions is the top pressure driving their investment in business intelligence investments.
In order to accomplish this goal, Aberdeen offers four keys for insurers to ensure their data doesn't go unused:
1. Link key performance indicators to business objectives — Insurers cannot manage what it doesn't measure. Both personal and organizational performance indicators should directly correspond to business goals.
2. Build a centralized repository for business data — Allowing data to rest in siloed legacy systems robs the entire organization of information. A well-managed data warehouse can transform a complex and occasionally contradictory system of records to an orderly database that is useful throughout the enterprise.
3. Encouraging sharing of expertise — Insurers must be able to draw connections between current data and past performance so as to create organizational knowledge. While technology can support the creation of such knowledge, computer can only do so much. To ensure organizational knowledge isn't lost, carriers should cultivate the sharing of expertise across product lines and throughout the business.
4. Find opportunities to leverage your BI investment across several areas of the business — Given the value of pervasive analytics, insurers that can deliver BI to more business functions and people across the extended enterprise (agents, brokers, partners, customers, etc.) are able to reap the benefits of substantial business visibility, lower user costs and enhanced performances.
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