The 12-year-old kid in me loves The Simpsons and one ofmy favorite quotes, issued by Homer, is easily adaptable tothe insurance industry and what we all like to call “the dataproblem.”

The line, as adapted by yours truly is as follows: “Data, thesource of—and answer to—all of an insurance carrier'sproblems.”

Those who recognize the line know that Homer was referring tobeer, but Homer never worked for an insurance carrier that, say,had a data warehouse that was virtually inoperable because the dataitself was of such poor quality.

There are any number of issues why an insurance carrierstruggles with its data. For more insight on this issue you canlisten to an archived webinar put on last week byPropertyCasualty360.com.

How do you know if your data is of poor quality? There aremultiple answers to that question, but for one, just ask yourselfthis question: Do you have the ability to answer strategicquestions about your customers?

Ideally, insurers should have that ability. After all, what isyour data other than information about your customers? If you areunable to take that data and manipulate it into reasonable shape soyou can quickly detect—or even better—anticipate the needs of yourcustomers for additional coverage, you are not getting the most outof your data.

Consultant Bill Jenkins, who previously served as CIO at PennNational believes insurers often lack two things when looking toimprove their data: employees in IT that have the right skills toclean and manipulate the data, and a champion within the executiveoffices who will push through such a program.

The scariest point of Jenkins' presentation in the webinar,though, was that through his discussions with nearly 50 insurancecarriers in recent years, most of them had the belief that acompany's data is the responsibility of IT.

Surely IT needs to be involved in all data projects, but what isIT going to do with data? We should all know the answer to thatquestion, but apparently we don't.

I thought we had already reached the point where we realizedthere is no such thing as an IT project anymore. Any projectsundertaken by an insurance carrier that involve technology arebusiness projects because if there is no business case for it—andno one championing the issue—there will never be enough businessbenefits for a sustainable return on investment.

There are enough success stories around for us to know that aproperly organized data project can do wonderful things forinsurers such as improve customer service and improvesales—particularly with existing customers. Are those two areaswhere you would like to see an improvement within yourorganization? We thought so.