Insurance carriers have accumulated massive amounts of data over the years, which can present a daunting task when it comes time to turn that data into business intelligence (BI). That is why gaining some control of that data is the first step recommended by industry analysts and insurers to achieve a successful business intelligence plan.
For Karen Pauli, research director in the insurance practice for TowerGroup, the first step calls for getting your data in order, but there are other steps that need to follow closely.
Hussain believes insurers need to take measured steps to approach the business intelligence problem, suggesting the core domains are the first place to start.
Traditionally, historical trend analysis served as the business intelligence for the insurance industry. Insurers have been doing such analysis for a good number of years and Callahan feels there are three realities to deal with.
The law of large numbers has mitigated some of the issues with data quality. When insurers do a look-back it can be less effective in making predictions because the sensitivity in predictive models is much higher with data quality.
One of the biggest challenges facing companies trying to move to the next level of business intelligence is what Callahan calls management bandwidth.
The modeling capabilities are something MAX intends to spend more time on once the carrier gets the more germane tasks completed, such as new production reports and exposures reports.
“We still have to get that nailed down, but we’re looking forward to the ability to model the data,” says Heacock.
“The real payoff is down the road where we can be more proactive rather than just reacting to the numbers,” he says. “Maybe we can figure out how we can make a more direct impact with the numbers. Our current reporting is looking through the rearview mirror. We really want to start looking through the windshield. But you can’t go forward until you know what’s behind you. Our goal is to have these things done by the end of this year. That’s an aspiration. We may not totally be where I’d like us to be, but it’s incremental. We’ll be doing some things along the way.”
Kelly Donaghy explains Pan-American Life’s first step is to work on strengthening the data around its producers. The carrier will then use business intelligence to create key performance indicators across the company.