Enterprising Developments

Master Data Isn't Available at the Turn of a Switch

Joe McKendrick
Insurance Experts' Forum, August 20, 2010

Silos are a good thing if you run a farm or a missile launch site. If you're in the insurance industry, however, they can be a curse. Information on the same customer or prospect may be spread across six different systems and, even worse, identified differently under different field names.

Jinesh Radadia, partner and practice leader for information management at EMC Business Consulting, recently shared his perspectives with me on the evils of information silos, and how they can be overcome.

“Most insurers generally have complex data architecture landscape due to legacy business and IT decisions and application silos,” he says. “This environment has become increasingly complicated, and poses significant challenges for insurers to remain profitable.”

So what can be done about all these silos? Radadia urges the creation of a central, shared repository of “the best version of the truth”—a master data file. However, despite what you may hear, moving to such a single repository is more than a simple task order for the IT department or the database administrator, he cautions. “Master data is created and locked in multiple silos—applications, data warehouses, data marts, external sources and channels,” Radadia points out. “Companies lack a core IT foundation for reliable master data management.”

Insurance company IT departments need to work closely with the business management side to develop technologies and approaches that provide for greater visibility into customer information. “To succeed today, insurance companies must take a far more holistic view and have a deeper understanding of consumers,” Radadia urges. “This requires a new type of integrated, 360-degree customer view and a more sophisticated decision making platform.

Ultimately, the effort involved in a transformation is worth it. Radadia says a key benefit of having a common MDM repository is enhanced customer support and increased customer loyalty. “Focusing on customer insight driven support and retention efforts can easily increase profitability per customer, rather than acquiring new customers,” he says. “By consolidating data across internal applications, MDM creates one reliable source of truth of customer data.”

There are better marketing capabilities as well. “Creating a unified and accurate customer view drives business actions that relate specifically to customer segments including offers, life event marketing, discounts and availability of information for the customer. Additional benefits include reduced rate of plan lapse, and reduced customer attrition.”

Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.

Readers are encouraged to respond to Joe using the “Add Your Comments” box below. He can also be reached at joe@mckendrickresearch.com.

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments...

Already Registered?

If you have already registered to Insurance Networking News, please use the form below to login. When completed you will immeditely be directed to post a comment.

Forgot your password?

Not Registered?

You must be registered to post a comment. Click here to register.

Blog Archive

The Good, The Bad and The Ugly Of Enterprise BI

When IT can't deliver, business users build their own applications focusing on agility, flexibility and reaction times.

The IT-Savvy 10%

IBM survey reveals best practices of IT leaders.

The Software-Defined Health Insurer: Radical But Realistic?

Can a tech startup digitally assemble the pieces of a comprehensive, employer-provided health plan?

Data Governance in Insurance Carriers

As the insurance industry moves into a more data-centric world, data governance becomes more critical for ensuring the data is consistent, reliable and usable for analysis.

Fear This

Just days before this Issue, which contains our security cover story, went to press, we got some interesting news: 1.2 billion unique usernames and passwords and 542 million email addresses were reportedly stolen from 420,000 websites, according to The New York Times. The websites ranged from Fortune 500 companies down to small online retailers.

Should You Back Up Enterprise Data to the Cloud?

Six questions that need to be asked before signing on with an outside service.