Visualize: Insights that power innovation

Visualize: Insights that power innovation

Data management and reporting services: Vital for start-ups and acquisitions

By Arun Prasad  |  January 16, 2020

Data management and statistical reporting are serious business. Insurers must constantly prepare, manage, and report accurate data. Requirements and expectations from regulators often increase and change, but the time allotted to comply usually doesn’t. Many times, insurers need to manage limited time and resources; however, the results of poor data management can be a bigger risk.

These challenges can be daunting to many larger and established insurers and sometimes even more difficult for start-ups or acquisitions. Start-ups need timely and accurate compliance reporting from the beginning, something they might not be prepared for initially. And when a larger insurer makes an acquisition and establishes a new business unit, there’s often a need to combine multiple systems and integrations while keeping up with regulatory reporting requirements. 

The challenges of regulatory and compliance reporting

Poor data management is a huge exposure that can often lead to negative consequences for many insurers, such as potential fines from state regulators or a decrease in overall profitability. Consider the following facts:2

  • Financial impact: More than 10 percent of insurers’ IT budgets are spent on regulatory compliance (staff analyzing requirements and change implementation).
  • Operational issue: Forty percent of insurers aren’t satisfied with their IT capabilities for statistical reporting and data calls.
  • Regulatory challenge: All 50 states have their own reporting requirements for insurers, which often change, and insurers must keep track.

Many start-ups and acquisitions contend with these issues in addition to the inherent challenges new companies or business units face. After all, their prime concerns should be establishing their very presence, hiring and training new staff, creating brand awareness, and penetrating often tight market shares. Staff, time, and other resources can be limited; compliance and regulatory requirements don’t wait.

Proper data management from a trusted and reliable source is the key and can help in several basic areas. First, it may save an insurer time and money by requiring fewer resources to collect, review, and report data. Next, streamlined reporting can cut down on the number of steps needed for insurers to comply with regulations. Finally, increased proper compliance can lower the potential of fines from state regulators, and that’s good for the bottom line.

Help is available

ISO’s Preferred Data Partnership (PDP) is one solution that Verisk developed to help address the challenges of data management and reporting for insurers. PDP can help take the onus of these issues off a start-up or acquisition, allowing for focus on those other important tasks when establishing a new business. PDP helps a start-up unlock the power of its statistical data while taking care of many compliance and reporting tasks.

Following are some case studies that illustrate how such a resource can work.

Field Example 1: Start-up with reporting and IT system challenges

The challenge: One start-up customer had dual challenges of navigating mandatory regulatory reporting requirements and dealing with the complexity of its IT systems which were in flux. Also, its data stores were not fully functional or optimized for downstream regulatory and bureau reporting.

The solution: PDP provided reporting and integration support which helped create a solid foundation of report generation irrespective of the data sources and systems upstream. Such decoupling allowed the insurer to have enough time to standardize the systems of choice and maintain reporting levels without disruption.

Field Example 2: Establishing systems and integrations for a new acquisition

The challenge: An acquisition and new unit had to set up multiple systems and integrations and wanted help with mandatory regulatory reporting and regulatory compliance. Their challenge was made more difficult due to limited time and resources to commit to those tasks.          

The solution: PDP helped integrate their systems and manage regulatory compliance reporting, helping to create a solid foundation for sustained growth.

Field Example 3: A start-up with new demands from the get-go

The challenge: Another start-up customer had to contend with the difficult challenges of establishing a new company while managing multiple systems and integrations, mandatory regulatory reporting tasks, and regulatory compliance from the very beginning.

The solution: PDP helped manage those tasks which helped give the company a solid start with a pathway to sustained growth.

Start-ups and new acquisitions have a lot of work to do to create a new business that will last and grow to be profitable. Managing data and handling regulatory reporting are vital functions that may require outside help.

  1. Data on file, ISO.
  2. Novarica Research Partners Program Report, “Strategic Technology Issues in Regulatory/ISO Compliance for P&C Insurers,” 2013.

Arun Prasad is Director of Principal Data Services, ISO. Arun can be reached at Arun.Prasad@verisk.com.