A couple of years ago, I wrote an article for ISO Review (now Verisk Review) which discussed the changing regulatory environment we need to prepare for. The key points of that article remain true. Our industry expends significant resources on the collecting, managing, and assuring the quality of data. We recognize that the cost of not doing so would be even greater. While the regulatory landscape is evolving and will continue to change, the need for strong data-management skills and high-quality data is a constant. From a regulatory standpoint, the enactment of Sarbanes-Oxley, the Gramm-Leach-Bliley Act of 1999, and privacy and security rules included in the Health Insurance Portability and Accountability Act (HIPAA) immediately put the focus on data and the ability to manage it properly. That focus remains both domestically and now increasingly globally.
The property/casualty industry has more complex and detailed data requirements than most (if not all) other industries. But more data does not necessarily mean better results. Unless we understand, protect, manage, and use data with great care and appreciation of its value and meaning, it will not accomplish the intended objectives. Simply obtaining more data does not mean insurers will have the means to address the problem at hand. We must be able to do more with less. That makes analytics key.
We must aggregate data in a manner suited to the problem we’re addressing or the questions we need to answer. That’s critical not only to the success and prosperity of individual companies but to the industry as a whole.