Each year as the World Series unfolds, I am struck by the level of competitive analysis the teams apply to the game and how its applied. From how a batter fares against right-handers and lefthanders to what type of pitch a certain pitcher will throw when ahead in the count, data is collectedto determine probabilities and strategies for success.
Insurance is really no different, except the amount of data to be sifted is exponentially larger. Instead of information on two teams, its policy, claims, risk, personal, and gobs of other details. In fact, it seems insurers often have been able to capture more data than they actually have the ability to handle.
To deal with this, the trend has been to take a vertical approach, implementing highly specialized solutions (see Heavy Lifting, p. 30). Given the feedback from the front lines, these initiatives are a step in the right direction, especially since the technology-driven Field of Dreams approach of if we build it, they will come, hasnt seemed to work very well. The solution has to meet the business needthen they wont need to be invited, theyll already be there.
Keep in mind, though, opportunity costs arise when focusing strictly on point solutions and quick ROI. Insurers may miss out on larger scale, more systematic improvements that may not achieve positive ROI for a year or longer but may produce more dramatic results than can be derived from a smaller project.
An insurer at a conference I attended a couple of months ago noted that for years its data had been siloed, and its highly specialized business units frequently competed with each other in terms of products (for more on managing data integration challenges, see our cover story, Talk Is Cheap (But Integration Isnt) p. 18). This made scorecarding company performance extremely difficult. Now the companys approach is one of data collaboration with an industry view. It had to collect information from a variety of sources and create a universal language. It started simply and added more metrics. Today the carrier is able to look at the business across the enterprise in the U.S., with plans to expand that capability globally.
This approach seems to be the most frequently successful one in handling as huge an endeavor as data management. Hitting base hit after base hit to load the bases and set up the opportunity for a grand slam is not only good baseball strategy, its effective IT strategy. A victory in this game can turn a mediocre company into a leader and a leader into a world-class player. So, as they say on the field, go out there and play balland may the best company win.
Sharon S. Schwartzman
Editor-in-Chief
New and noteworthy: Just a quick heads up on a couple of nifty new departments in this issue. IT Chat Room (p. 40) shares one-on-one conversations with professionals at leading companies pushing the IT envelope. Financial Services (p. 42) explores technology and business issues across the three financial services segments. Hope you find them as interesting as we did producing them!
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