The role of data & analytics is changing in the re/insurance industry but as carriers have looked to bolster their capabilities, a few things have served to hinder their efforts, according to James Harrison, UKI Head of Insurance at global data and analytics firm, Dun & Bradstreet (D&B).
In a recent interview with Reinsurance News, Harrison discussed the challenges re/insurers face when it comes to handling data and what they need to do in order to fully take advantage of it.
The insurance industry has long tried to grapple with the challenge of multiple legacy systems within one operating model, which are typically heavily customised and that ultimately, fail to talk to each other effectively.
Those silos and that overall lack of linkages, according to Harrison, will continue to be one of a few barriers that stops carriers from being able to make the most of the data analytics opportunity. He believes the ultimate barrier is around data stewardship and analytical solutions.
“What we found is that the industry really just wants to resolve some of the fundamentals to their master data management and this ultimately to understand quickly across different systems who the policyholder or entity that they are working with,” he said.
At D&B, he continued, this goes back to something known as sorting the brilliant basics to master data management.
“Actually just understanding who your customer is and being able to match that quickly can help improve the customer journey through streamlining underwriting, streamlining claims, streamlining policy administration,” said Harrison.
He went on to explain that the reason behind this is usually down to data stewardship and front end data entry errors which leads to significant process friction including management information disruption.
A further conduit to change is the growing support from insurance leaders on data strategy, which Harrison believes is starting to accelerate.
“If the market really wants to fast-track its digital modernisation, it has to get its master data right. And, that means that data across the market has to be considered by the C-suite as central to corporate strategy.
“There is no point building a shiny new skyscraper on foundations of sand, right? You need to get those foundations right, that comes down to having a robust approach to data, to then maximise the potential of digital technologies,” he continued.
As an example, Harrison discussed his days working in digital strategy for a broker. Whilst the digital solution did very well in A/B testing, it didn’t reach its potential because the business did not have the data or approach to support a digital solution, in some cases they could not link policies together, nor have a standardised way of referencing.
“That skyscraper analogy was about four years ago, and this still rings true today based on the conversations I have today with insurance clients.
“We need to get the foundation’s right before we can really maximise the digital opportunities from AI, machine learning, IoT, sensory data etc. It all starts with getting the house in order, it starts with data,” said Harrison.