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Insurers – Who Owns the Data Anyway?

Ben Moreland
Insurance Experts' Forum, May 30, 2013

Historically, insurers were more focused on the processes, especially with respect to agents. Until about eight years ago, if you asked an insurer who their customer was, the answer was, “Agents.” Improved ease of use projects were focused on agents’ ease of use with insurer systems. The policyholder was not even part of the equation. At the time, this made sense. Departments and LOBs were operated independently of one another, and their data was a closely-guarded secret. Insurance LOBs did not, and perhaps still do not, trust another LOB’s data, nor do they openly share their data with others internally. (Maintaining siloes is very important in insurance…) Financial information would flow up for reporting purposes, but rarely customer data, policy or claims data across LOBs.

Another negative of the data being owned and controlled by the LOBs and departments is that as the data flow up the organization for financial reporting and some aggregate enterprise reporting, it is inconsistent, missing and dated. Different departments have different definitions of the same entities: earned premium with and without fees, policy definitions (some insurers have over 15 definitions of “policy” alone!). As was mentioned in a prior blog, this is primarily the result of a poor or missing enterprise data strategy.

Most insurers continue to allow the LOBs, and even lower departments, to control their own data and define how they wish to define and present their data. This prevents them from getting consistent, accurate and current reports and analysis at the enterprise level. However, some insurers are beginning to take steps forward to take control of and manage their data at the enterprise level. They have created executive roles that are now responsible for the data governance, direction and strategic and tactical use of their data. New roles are emerging, such as Chief Data Scientist, who are reporting to the CEO or CFO; and are defining consistent business entity definitions across the LOBs. The LOBs can still manage their own data, but they must adhere to the enterprise data definitions and models, and be prepared to provide their data in a current capability, such as nightly feeds.

Insurers that have taken back ownership of their enterprise data have also been able to feed data back into the LOB to enhance their ability to manage operations and customer relationships effectively and confidently through newly-reliable data. Denise Garth describes how enterprises that are able to unlock their data from LOB data silos are able to gain business insight to shape their future.

As always, for an insurer to get the maximum value of freeing data from the traditional data silos, they need a mature insurance data model and a solution that enables easy migration of the LOB data to the enterprise level. Further, a sophisticated level of analysis and insight across the whole insurance value chain, as well as within the LOB, is necessary. Business users can only be empowered to drive operational efficiency, improved customer relations and retention, and speed to targeted marketing through enterprise data ownership, which requires moving control and ownership of the insurer’s data to the enterprise from the LOBs. Who owns the data anyway?

Ben Moreland is senior business architect for Innovation Group.  He can be reached for further comment or information via email at morelandb@us.innovation-group.com.

Comments (3)

Attention Regulators:

Mr. Moreland's second sentence acknowledging that insurers have viewed the agent rather than the consumer as their customer is additional evidence of the dysfunction of the life insurance marketplace. The competition has been to get agents not to obtain consumers' business. This is a clear sign of marketplace dysfunction that can only exist when consumers are not adequately informed.

Life insurance consumers have never been adequately informed. That is why the industry has been able to provide unjustified compensation to life insurance agents.

To learn more about the forthcoming transformation of the life insurance industry, please visit the Breadwinners' Insurance website. An informational tsunami will strike the industry as soon as the financial journalists begin to deliver the fundamental information on life insurance policies (namely a way to compare their costs and performance) that consumers have always needed and deserved, but to this day have not yet received.

Posted by: Breadwinner_Brian | June 7, 2013 10:57 AM

Report this Comment


Attention Regulators:

Mr. Moreland's second sentence acknowledging that insurers have viewed the agent rather than the consumer as their customer is additional evidence of the dysfunction of the life insurance marketplace. The competition has been to get agents not to obtain consumers' business. This is a clear sign of marketplace dysfunction that can only exist when consumers are not adequately informed.

Life insurance consumers have never been adequately informed. That is why the industry has been able to provide unjustified compensation to life insurance agents.

To learn more about the forthcoming transformation of the life insurance industry, please visit the Breadwinners' Insurance website. An informational tsunami will strike the industry as soon as the financial journalists begin to deliver the fundamental information on life insurance policies (namely a way to compare their costs and performance) that consumers have always needed and deserved, but to this day have not yet received.

Posted by: Breadwinner_Brian | June 7, 2013 10:56 AM

Report this Comment


Attention Regulators:

Mr. Moreland's second sentence acknowledging that insurers have viewed the agent rather than the consumer as their customer is additional evidence of the dysfunction of the life insurance marketplace. The competition has been to get agents not to obtain consumers' business. This is a clear sign of marketplace dysfunction that can only exist when consumers are not adequately informed.

Life insurance consumers have never been adequately informed. That is why the industry has been able to provide unjustified compensation to life insurance agents.

To learn more about the forthcoming transformation of the life insurance industry, please visit the Breadwinners' Insurance website. An informational tsunami will strike the industry as soon as the financial journalists begin to deliver the fundamental information on life insurance policies (namely a way to compare their costs and performance) that consumers have always needed and deserved, but to this day have not yet received.

Posted by: Breadwinner_Brian | June 7, 2013 10:55 AM

Report this Comment

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