More Efficient Data Boosts Agency Profits

Kris Robinson, Teradata's solution vice president for financial services, insurance, health care and pharmaceuticals, opened the session discussing integration breakthroughs in corporate legacy systems through the use of data mining.

The company said its integration solution allows firms to integrate the silos of data information they have built up over the years through mergers and acquisitions. The aim is to reduce costs and bring new capabilities to corporate technology systems, said Ms. Robinson.

Ramesh Nair, managing director for customer relationship management solutions at BearingPoint a New York-based technology consulting firm partnered with Teradata noted that the onset of new financial reporting regulations is a powerful driver for financial services firms, including insurance agencies, to "re-think" data convergence.

"Now, there are more mandates for reporting because of the accounting scandals [such as Enron]," he noted, citing privacy regulations as another obstacle to company marketing plans.

In the coming years, firms are going to be required to do more reporting, and will have to get information that could potentially affect the stock price out to the street sooner, he noted. This is difficult when companies have not integrated their information reporting systems.

The heightened reporting requirements, Mr. Nair suggested, may mean that soon a firm's chief information officer would have to sign off on the accuracy of reports, in addition to the chief executive officer, making the need for data convergence even more pressing.

New privacy regulations mean that contacting customers to market new products is becoming more difficult because the regulations prevent the sharing of information among divisions.

"Marketing departments are worried about this," he said. The solution, he suggested, is data convergence, which takes all the data from disparate systems and brings it together into one reporting system.

One of the major dilemmas in deploying such a solution, however, is finding the money to do it, Mr. Nair noted. He added, however, that data convergence can allow project teams to actually put money back into a project through savings derived from the integration process.

"Convergence can change a lot of things across the board," said Mr. Nair. "We truly believe we are at a point where a lot of things are working in our favor."

Talking about how the insurance industry canbenefit from data convergence, Sullivan McConnell, personal lines technology solutions manager at St. Paul Travelers, said the carrier set out todevelop a set of business strategies and to identify thegaps inbothtechnologyand information that wouldprevent it from effectively executing those strategies.

From there, the companydeveloped a road map to evolve the information flow and information infrastructure. The next step, he said, was to "bring focus to capturing, cleansing and making consistentthis set of converging data."

By developing this single base of information, the carrier feels itwill be in a position "to develop marketplace insights more quickly, introduce new products to the marketplace, and understand the effects of those productsmuch more rapidly."

"Informationintegration is core to our vision," Mr. McConnell said. "This is a pretty well thought-out road map, and this helps us to execute our programs in timely manner." The technology advancements will eventually translate into a payoff for agents, he stated.

"We strongly feel thatinformation-based product and pricing strategies willhelp independent agents grow," he added.

Reproduced from National Underwriter Edition, October 1, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.