In the fast-paced and highly competitive insurance marketplace, innovation is vital to an insurer’s success. Through innovation, insurers can develop sustainable competitive advantages to help better respond to external challenges, shifting market dynamics, and ever-expanding technological advancements. The ability to innovate is critical to an insurer’s long-term financial strength and soon may be one of the measures by which an insurance company is rated.*
But how does an insurer become an innovator? One clear path is by being a truly data-driven company. That means insurers must not only manage data properly but also make sure it’s of the highest quality possible. Quality data, managing it effectively, and adopting a business intelligence (BI) model are key building blocks that give an insurer the resources to set company goals high—and that includes the ability to innovate successfully.
Now’s the time to assess data management capabilities, any loopholes in your system, or areas of need and truthfully answer one question: Are you effectively using quality data to drive BI and, ultimately, innovation?
Becoming a data-driven company
While companies may invest significantly in data collection and storage, if they don’t have an effective data management strategy and proficiently use the data collected, their efforts often won’t be successful. This view appears to be gaining traction in the insurance industry. More than 40 percent of insurers have adopted a BI model supported by effective data management, placing the insurance industry as having one of the highest rates of BI adoption, according to the 2018 Wisdom of Crowds Business Intelligence Market Study from Dresner Advisory Services.
Other research shows that 84 percent of overall top-performing companies are concerned about the quality of their data (Forbes webinar, How Improving Data Quality Can Improve Your Business), but fewer than 20 percent have maximized the potential of advanced analytics or implemented at scale, according to Celent research.
Many insurers likely spend too much time untangling and managing data from diverse sources when they’d rather focus on profitable growth opportunities and providing an enhanced customer experience. Other common data challenges may often include:
- long lead times to adapt IT systems to changing strategies
- disparate data sources of varying reliability
- overly laborious processes that lead to inefficiencies
- siloed data systems that prevent truly unified operations
- rapidly changing regulations
Data management solutions
To help become a successful data-driven company and then develop into a first-class innovator, an insurer needs a solid data management process—even if that means partnering with a provider that has the resources and expertise the insurer may not have. Such a results-oriented solution works on several levels, but data must be:
- consolidated and validated—and workflows streamlined
- securely reported and warehoused, whether on-site or at another location
- part of an integrated system to analyze, improve, enhance, and ensure the highest possible data quality
- modernized with a scalable infrastructure to build an enterprise view of the business
High-quality data is fundamental for innovation to succeed. Insurers must commit to enabling access to data and transparency as corporatewide objectives. Only then can effective data management processes lead to better innovation outputs. Data management solutions must help an insurer use the data efficiently to create value, making sure it has the information necessary to build robust innovations.
Quality data is also vital to navigating today’s compliance challenges. Insurers and their customers face increasingly complex risks, and regulations and reporting requirements are constantly changing. It can be difficult to stay compliant in this shifting landscape. Statistical reporting must be accurate, complete, and within compliance and regulatory guidelines. Partnering with a data management and statistical reporting provider with expertise in these areas may be the best solution for insurers.
Verisk can help
Often insurers don’t have the resources to effectively manage data themselves. Verisk has combined the science of data management with 50 years of experience in insurance data management to create a solution that can help seamlessly collect, store, cleanse, manage, and enrich your data. Verisk helps solve difficult data management issues, offers secure warehousing, and provides analytics that can empower an insurer to do more with data. For additional information, see our website.
*A.M. Best draft, “Scoring and Assessing Innovation,” March 2019.